Arizona bill changes how businesses pay state taxes

Business income; corporate tax; allocation

Introduced· 2026-01-21

Who's it for

Who's it for: Corporations

What it means for you

5/10Mixed

Mixed: some good, some bad ·

Cost shift

Plain‑English summary, cross‑checked against the official bill text.

If passed, the bill would make companies calculate Arizona taxes using new formulas that could raise what they owe, which may raise prices for shoppers.

Our take

What we think, in plain words.

Businesses may end up paying more tax, so they could raise prices or cut jobs, and the state could collect more revenue; now is the time to speak up before it passes.

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The facts

What the bill actually says, no spin.

Amends Section 43-1139 to let businesses apportion income using new property, payroll, and sales factor formulas for years 2006‑2026.
Adds a special rule for air commerce that bases tax on aircraft miles flown in Arizona.
Amends Section 43-1147 to define where sales of services count as Arizona sales based on activity location and market percentages.
Sets percentages for market sales that increase from 85% to 100% between 2013 and 2026.
After 2026, sales are considered Arizona sales if the market or property is located in the state, with rules for real property, tangible property, transportation, loans, and investments.