HB4152 - 2026-2027; taxation; omnibus.

House Engrossed 2026-2027; taxation; omnibus. State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HOUSE BILL 4152 AN ACT amending sections 20-224 and 20-224.01, Arizona Revised Statutes; repealing SECTION 20-224.03, Arizona Revised Statutes; amending sections 20-837, 20-1010, 20-1060, 20-1097.07, 28-2154.01 and 41-1520, Arizona Revised Statutes; repealing section 41-1525, Arizona Revised Statutes; amending sections 42-1001, 42-2003, 42-5009 and 42-5029, Arizona Revised Statutes; repealing section 42-5031, Arizona Revised Statutes; amending sections 42-5061 and 42-5071, Arizona Revised Statutes; amending section 42-5159, Arizona Revised Statutes, as amended by Laws 2025, chapter 135, section 2 and chapter 247, section 2; repealing section 42-5159, Arizona Revised Statutes, as amended by laws 2025, chapter 251, section 13; amending sections 42-6009, 43-105, 43-222, 43-301, 43-323 and 43-1022, arizona revised statutes; amending title 43, chapter 10, article 3, Arizona Revised Statutes, by adding section 43-1030; amending sections 43-1041, 43-1042 and 43-1073.01, Arizona Revised Statutes; repealing section 43-1074, Arizona Revised Statutes; amending section 43-1074.01, Arizona Revised Statutes; repealing sections 43-1083 and 43-1083.02, Arizona Revised Statutes; amending sections 43-1083.03, 43-1121 and 43-1122, Arizona Revised Statutes; repealing sections 43-1161 and 43-1164.03, Arizona Revised Statutes; amending sections 43-1164.04, 43-1164.05 and 43-1168, Arizona Revised Statutes; repealing section 43-1170, Arizona Revised Statutes; amending title 43, Arizona Revised Statutes, by adding chapter 18; amending sections 48-4203, 48-4204, 48-4231.01, 48-4231.02 and 48-4237, Arizona Revised Statutes; relating to taxation. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 20-224, Arizona Revised Statutes, is amended to read: START_STATUTE 20-224. Premium tax; reports A. On or before March 1 of each year, each authorized domestic insurer, each other insurer and each formerly authorized insurer referred to in section 20-206, subsection B shall file with the director a report in a form prescribed by the director showing total direct premium income including policy membership and other fees and all other considerations for insurance from all classes of business whether designated as a premium or otherwise received by it during the preceding calendar year on account of policies and contracts covering property, subjects or risks located, resident or to be performed in this state, after deducting from such total direct premium income applicable cancellations, returned premiums, the amount of reduction in or refund of premiums allowed to industrial life policyholders for payment of premiums direct to an office of the insurer and all policy dividends, refunds, savings coupons and other similar returns paid or credited to policyholders within this state and not reapplied as premiums for new, additional or extended insurance. No deduction shall be made of the cash surrender values of policies or contracts. Considerations received on annuity contracts, as well as the unabsorbed portion of any premium deposit, shall not be included in total direct premium income, and neither shall be subject to tax. The report shall separately indicate the total direct fire insurance premium income received from property located in the incorporated cities and towns certified by the office of the state fire marshal pursuant to section 9-951, subsection B, as procuring the services of a private fire company. B. Coincident with the filing of the tax report, each insurer shall pay to the director for deposit, pursuant to sections 35-146 and 35-147, a tax on such net premiums at the following rates: 1. For fire insurance: (a) On property located in a city or town certified by the office of the state fire marshal pursuant to section 9-951, subsection B, as procuring the services of a private fire company, .66 percent. (b) On all other property, 2.2 percent. 2. For disability insurance, 2.0 percent. 3. For health care service plans, the rates prescribed under sections 20-837, 20-1010 and 20-1060. 4. For other insurance: (a) For premiums received in calendar year 2016, 1.95 percent. (b) For premiums received in calendar year 2017, 1.90 percent. (c) For premiums received in calendar year 2018, 1.85 percent. (d) For premiums received in calendar year 2019, 1.80 percent. (e) For premiums received in calendar year 2020, 1.75 percent. (f) For premiums received in calendar year 2021 and for each subsequent calendar year, 1.70 percent. C. Any payments of tax pursuant to subsection F of this section shall be deducted from the tax payable pursuant to subsection B of this section. Each insurer shall reflect the cost savings attributable to the lower tax in fire insurance premiums charged on property located in an incorporated city or town certified by the office of the state fire marshal pursuant to section 9-951, subsection B, as procuring the services of a private fire company. No insurer shall be liable to the state or to any other person, or shall be subject to regulatory action, relating to the calculation or submittal of fire insurance premium taxes based in good faith on the office of the state fire marshal's certification. D. Eighty-five percent of the tax paid under this section by an insurer on account of premiums received for fire insurance shall be separately specified in the report and shall be apportioned in the manner provided by sections 9-951, 9-952 and 9-972, except that all of the tax so allocated to a fund of a municipality or fire district that has no volunteer firefighters or pension obligations to volunteer firefighters shall be appropriated to the account of the municipality or fire district in the public safety personnel retirement system and all of the tax so allocated to a fund of a municipality or fire district that has both full-time paid firefighters and volunteer firefighters or pension obligations to full-time paid firefighters or volunteer firefighters shall be appropriated to the account of the municipality or fire district in the public safety personnel retirement system where it shall be reallocated by actuarial procedures proportionately to the municipality or fire district for the account of the full-time paid firefighters and to the municipality or fire district for the account of the volunteer firefighters. A municipality or fire district shall provide to the public safety personnel retirement system all information that the system deems necessary to perform the reallocation prescribed by this section. A full accounting of the reallocation shall be forwarded to the municipality or fire district and its local boards. E. This section does not apply to title insurance. Title insurers shall be taxed as provided in section 20-1566. F. Any insurer that paid or is required to pay a tax of $50,000 or more on net premiums received during the preceding calendar year, pursuant to subsection B of this section and sections 20-224.01, 20-837, 20-1010, 20-1060 and 20-1097.07, shall file on or before the fifteenth day of each month from March through August a report for that month, on a form prescribed by the director, accompanied by a payment in an amount equal to fifteen percent of the amount paid or required to be paid during the preceding calendar year pursuant to subsection B of this section and sections 20-224.01, 20-837, 20-1010, 20-1060 and 20-1097.07. The payments are due and payable on or before the fifteenth day of each month and shall be made to the director for deposit, pursuant to sections 35-146 and 35-147. G. Except for the tax paid on fire insurance premiums pursuant to subsections B and D of this section, an insurer may claim a premium tax credit if the insurer qualifies for a credit pursuant to section 20-224.03, 20-224.04, 20-224.06 or 20-224.07. H. On receipt of a properly documented claim, a refund shall be provided to an insurer from available funds for the excess amount of any fire insurance premium improperly paid by the insurer. The insurer shall reflect the refund in the fire insurance premiums charged on the property that was charged the excessive amount. I. On or before September 30 of each year, the director of the department of insurance and financial institutions shall report to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting on the amount of insurance premium tax credits established by sections 20-224.03, 20-224.04, 20-224.05, 20-224.06 and 20-224.07 that were used during the previous fiscal year. J. For the purposes of: 1. Subsection B of this section, fire insurance is one hundred percent of fire lines, forty percent of commercial multiple peril nonliability lines, thirty-five percent of homeowners' multiple peril lines, twenty-five percent of farm owners' multiple peril lines and twenty percent of allied lines. 2. Section 20-416, fire insurance is eighty-five percent of fire and allied lines. K. From and after December 31, 2017, the director may require that reports and payments under this section be submitted electronically. If the director requires electronic submission, the director shall include on the department's official website a list of one or more acceptable third-party services through which an insurer must submit reports and payments. END_STATUTE Sec. 2. Section 20-224.01, Arizona Revised Statutes, is amended to read: START_STATUTE 20-224.01. Additional premium tax; civil penalty A. Coincident with the filing of the tax report as required in section 20-224, each insurer shall pay to the director, for deposit, pursuant to sections 35-146 and 35-147, a tax of .4312 percent of such net premiums received from all insurance carried for or on vehicles as defined in section 28-101, in addition to other applicable taxes. B. The tax of .4312 percent of such net premiums received by the director and paid by an insurer on account of premiums received for insurance on certain vehicles as defined in section 28-101 shall be separately specified in the insurer's report required in section 20-224 and is appropriated to the public safety personnel retirement system and shall be transferred by the state treasurer to the board of trustees of the public safety personnel retirement system for deposit in the highway patrol account. If the tax received is greater than the amount necessary to fund the highway patrol account, beginning in the 1991-1992 fiscal year the state treasurer shall deposit the excess in the Arizona highway patrol fund established by section 41-1752 in any amount required by legislative appropriation. C. An insurer shall report and pay the taxes required by this section in the manner prescribed by section 20-224. An insurer who that fails to pay the tax on or before the prescribed payment dates is subject to a civil penalty determined pursuant to section 20-225. D. An insurer shall not claim a premium tax credit pursuant to section 20-224.03 for the premium taxes paid pursuant to this section. END_STATUTE Sec. 3. Repeal Section 20-224.03, Arizona Revised Statutes, is repealed. Sec. 4. Section 20-837, Arizona Revised Statutes, is amended to read: START_STATUTE 20-837. Tax exemption; exceptions A. Every corporation doing business pursuant to this article is declared to be a nonprofit and benevolent institution and to be exempt from state, county, district, municipal and school taxes, including the taxes prescribed by this title, and excepting only the fees prescribed by section 20-167 and taxes on real and tangible personal property located within this state. Each corporation is subject to a state tax of 2.0 percent on net premiums that are received to effect or maintain the corporation's subscription contracts, except that the tax shall not apply with respect to any coverage concerning which the corporation's relationship is as administrative or fiscal agent for national, state or municipal government or any political subdivision or body thereof, and such tax shall not apply with respect to any premiums received from funds of national, state or municipal government or any political subdivision or body thereof. The tax shall be determined, filed and reported in the manner prescribed in section 20-224. The failure by a corporation to pay the tax on or before the prescribed payment dates results in a civil penalty determined pursuant to section 20-225. B. A corporation may claim a premium tax credit if the corporation qualifies for a credit pursuant to section 20-224.03. END_STATUTE Sec. 5. Section 20-1010, Arizona Revised Statutes, is amended to read: START_STATUTE 20-1010. Taxes A. On the tax payment dates prescribed in section 20-224, each prepaid dental plan organization shall pay to the director for deposit, pursuant to sections 35-146 and 35-147, in a form prescribed by the director a tax for transacting a prepaid dental plan in the amount of 2.0 percent of prepaid net charges received from members. B. The failure by an organization to pay the tax imposed by this section results in a civil penalty determined pursuant to section 20-225. C. A prepaid dental plan organization may claim a premium tax credit if the organization qualifies for a credit pursuant to section 20-224.03. END_STATUTE Sec. 6. Section 20-1060, Arizona Revised Statutes, is amended to read: START_STATUTE 20-1060. Taxes; exemption A. Except as provided in subsection C of this section, on the tax payment dates prescribed in section 20-224, each health care services organization shall pay to the director for deposit, pursuant to sections 35-146 and 35-147, in a form prescribed by the director a tax for transacting a health care plan in the amount of 2.0 percent of net charges received from enrollees. B. The failure by an organization to pay the tax imposed by this section results in a civil penalty determined pursuant to section 20-225. C. Payments received by health care services organizations from the United States secretary of health and human services pursuant to a contract issued pursuant to 42 United States Code section 1395mm(g) are not taxable under this section. D. A health care services organization may claim a premium tax credit if the organization qualifies for a credit pursuant to section 20-224.03. END_STATUTE Sec. 7. Section 20-1097.07, Arizona Revised Statutes, is amended to read: START_STATUTE 20-1097.07. Fees and taxes A. Any prepaid legal insurance corporation licensed pursuant to this article shall pay those fees prescribed by section 20-167 and those taxes prescribed by section 20-224. B. A prepaid legal insurance corporation may claim a premium tax credit if the corporation qualifies for a credit pursuant to section 20-224.03. END_STATUTE Sec. 8. Section 28-2154.01, Arizona Revised Statutes, is amended to read: START_STATUTE 28-2154.01. [Text truncated for display. 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