SBI or Senate Bill 1783 as formally referred to is a bill Governor Doug Ducey signed into legislation establishing a 2.5% flat tax rather than the previous progressive rate structure – one that established tax rates from 2.59% up to 4.5%. Thanks to the tax cut, Arizona has reduced income taxes across the board from the highest income bracket to the lowest.
Approval of this plan prevented the previously proposed tax plan that would increase small business taxes in Arizona by 77% by reforming property tax rates. The average taxpayer will see over $300 in savings every year.
SBI will provide relief after a year that was tough on Arizonians and support the people of the state. The bill allows small businesses to keep more money in their own pocket without neglecting state needs. Over 300,000 new jobs are expected to open in Spring of 2022 thanks to this increased savings and economy boost.
Arizona small businesses will be able to grow and reinvent in themselves rather than pay astronomical taxes. According to Senator J.D. Mesnard, this bill allows the government to “get out of the way so that they [small businesses] can thrive.”
The goal of this bill is to ensure that small businesses will continue to choose Arizona as a place to start, expand, or relocate their businesses.
Arizona small businesses are considered a core contributor to Arizona’s economy and make up more than 99% of Arizona’s businesses. Arizona small businesses also contribute by employing more than one million people in state. This bill also allows tax payers to exclude small business income from their total individual income. Small businesses will alternatively experience a flat tax rate that will change from 2021 to 2025. The rates are as follows:
The separation of tax structure for individuals and small businesses in Arizona does not come as a surprise to many and will make filing taxes easier for almost all Arizonans. The tax plan allows every Arizonan to save money no matter what their income is and is the largest tax cut in state history.