Arizona is set to reduce taxes for insurance companies under a new bill HB2440 Governor Doug Ducey signed into law.
The tax cut is expected to mean the loss of more than $44 million to state’s general fund over the next 10 years. The proposal comes at a time when Arizona Republicans successfully passed several other tax cuts, including a $30 million cut for businesses that isn’t accounted for in the Legislature’s own budget forecasts.
The latest measure, by Rep. David Livingston, R-Peoria, reduces tax rates on insurance premiums from 2 to 1.7 percent over a decade beginning in 2016, excluding fire and health care service insurance premiums.
Legislative analysts anticipate the state’s general fund will take an initial hit to the tune of $1.6 million in the budget year starting June 1, 2017. But they expect the impact will grow to $44.6 million by the time the state implements the full tax reduction in 2027. Article
