Arizona tax reform conformity, ADOR issues announcement

Your Guide to State, Local, Federal, Estate + International Taxation

tax reform TCJA, ADOROn January 10, 2019, the Arizona Department of Revenue issued a news announcement about tax reform that said . . . a whole bunch of nothing.

This is not the fault of the Arizona Department of Revenue (ADOR) – they can only do what the legislature gives them information to do.

And so far, it appears that the Governor and the Legislature are not exactly on the same page with the federal tax reform that was passed in December 2017, and so we need to go with what we have.

What we have is that as of January 1, 2018, Arizona – mostly – conformed to the federal rules for adjusted gross income. And then from that number the Arizona amounts were applied and came down to the amount of Arizona taxable income. This is because Arizona, like many other states, is what is called a federal AGI state.

2019 Tax season off to a delayed start

The problem arises in that until Arizona officially conforms, or not, the ADOR needs to get forms ready and prepare for the tax filing season, without knowing what is supposed to be on the forms.

So, they announced that they were going to assume that Arizona would follow the federal changes. But if conformity is not, in fact, the case, they will work diligently to get software and forms updated, trying to mitigate any potential for amended taxpayer returns as quickly as possible.

As part of this, the ADOR also announced that they were preparing to follow the IRS efile begin date of January 28, 2019.

Stay tuned – it is going to be an interesting couple of months in the tax department!

Donna H. Laubscher, CPA