(The Center Square) – Corporations in Arizona could soon keep more money in their coffers. 

The House Ways and Means Committee and Appropriations Committee approved of House Bill 2003 Wednesday. If enacted, it will step down Arizona’s 4.9 percent corporate tax rate to 2.5 percent over four years. The change would begin December 31, 2025.

The new rate would tie North Carolina for the lowest corporate tax in the nation, although six states don’t charge a corporate tax.

“With growing uncertainty from a shaky national economy and President Biden’s weak leadership in Washington, it’s more important than ever to ensure an environment where Arizona businesses can thrive – Arizona jobs and families depend on it,” said Rep. David Livingston, R-Peoria, who also serves as chairman of the House Appropriations Committee. “Cutting the corporate rate continues the state’s commitment to creating a low tax environment. We’ve done great work to lower the rate on personal income and now we must take the next step to equalize our rate for C-Corps to make them even with other businesses who file via the personal income tax, such as S-Corps and partnerships. It is a matter of fairness and sound tax policy.”

The measure passed along party lines in both committees, with Democrats unanimously opposed. 

“This bill is an attempt to further gut the corporate tax rate,” said Rep. Mitzi Epstein, D-Tempe. “As of 2022, 71 percent of Arizona corporations already pay only…$50 or less in income taxes. The economic strategy of enabling welfare for the wealthy is a failing policy. Our working families must pick up the slack because for so long, Republicans have allowed big corporations and billionaires to avoid paying their fair share.” 

The bill awaits a vote before the House Committee of the Whole.