Arizonans would get a one-year protection against income tax “bracket creep” under the terms of legislation given final approval Tuesday by the state Senate.
Current law has five tax rates, each at set division points. For example, the tax rate for anything earned above $50,000 is higher than the levy for wages below that.
HB 2377 requires the Department of Revenue to adjust that cut point this coming year to account for inflation. So if inflation is 2 percent, the dividing point between those two tax rates would become $51,000 and everything below that would be taxed at the lower rate.
The measure, which already has been approved by the House, now goes to the governor.