Arizona Pass through Entity Tax

Arizona House Bill 2871 which was signed into law on June 28, 2022, revised the tax rate applicable for pass-through entities (PTEs) from a fixed rate of 4.5% to rates ranging from 2.59 to 4.5% which are in line with the 2021 existing tax rates.  The pass-through tax was enacted to enable taxpayer who were previously limited by the $10,000 SALT limit to deduct Arizona taxes paid by their pass-through entities.