SB 1331 Arizona Senate · 57th Legislature - First Regular Session

income tax subtraction; capital gains

SB 1331 amends Arizona's income tax code (Section 43-1022) to update the list of allowable subtractions from gross income. The bill specifically revises the capital loss carryover provision (item 14) and modifies depreciation rules for business property (item 17), adjusting how taxpayers can subtract past capital losses and business asset depreciation. These changes primarily affect business taxpayers and individuals with significant capital losses or business assets. Although the bill's title references "capital gains," the text focuses on capital loss carryovers and depreciation adjustments, not new capital gains provisions.

Issues: ✗ Budget & Taxes

Bill status passed 3 of 5 stages cleared

Introduction

Feb 2025

Committee Review

Mar 2025

Senate Passage

Feb 2025

House Passage

Governor

Introduced Feb 3, 2025 Last action Mar 12, 2025

Maddy AI version diff · 1 comparison

What changed between versions

Introduced Version → Senate Engrossed Version · 6 edits · Feb 26, 2025

MODERATE

This bill updates Arizona's income tax statute to modernize capital gains treatment, add new tax provisions for digital assets and cryptocurrency, and adjust depreciation rules for business assets. The changes expand tax benefits for small business investments, introduce a new subtraction for virtual currency airdrops, and update the timeline for accelerated depreciation on qualifying property.

Scope change

The bill expands the scope of Arizona's income tax subtraction provisions to include digital assets (virtual currency and NFTs) received through airdrops, and adds new provisions for small business gross income reporting.

ELIGIBILITY

Added a new subtraction for virtual currency and non-fungible tokens received through airdrops, excluding appreciation in value after receipt.

Added a new subtraction for net capital gains derived from investments in qualified small businesses for taxable years beginning after December 31, 2013.

Added a new subtraction for contributions to achieving a better life experience accounts established under section 529A of the internal revenue code.

TIMELINE

Updated depreciation schedules for business assets to extend through 2026, with increasing percentage allowances from 2013 through 2026.

FISCAL

Increased the retirement benefit subtraction limit from $2,500 to $3,500 for taxable years 2019-2020, then to full amount for 2021 and later.

TECHNICAL

Corrected formatting and numbering inconsistencies in the original introduced version to create a clean, properly structured statute.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 12, 2025

Lower · Passed

lower

Feb 26, 2025

Upper · Passed

PASSED

upper

Feb 25, 2025

Upper · Passed

upper

Feb 10, 2025

Upper · Passed

upper

1 primary · 0 co-sponsors