43-224. Individual and corporate income tax credits; annual report; termination of unused credits

A. On or before September 30 of each year, the department shall report to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting on the amount of individual income tax credits and corporate income tax credits that were claimed in the previous fiscal year.

B. Except as provided by subsection C of this section, if, in any four consecutive reports under subsection A of this section, an individual or corporate income tax credit was not claimed by or allowed to any individual or corporate taxpayer, the director of the department of revenue shall:

1. Terminate the recognition and servicing of that credit for taxable years beginning from and after December 31 of the year in which the fourth report is issued.

2. Issue a public announcement, including on the department's website, of the termination of the credit under authority of this section.

3. Notify the governor's office of strategic planning and budgeting, the president of the senate, the speaker of the house of representatives, the joint legislative budget committee and the legislative council.

4. Include the repeal of all statutes relating to the terminated credit in technical tax correction legislation for enactment in the next regular session of the legislature. If the legislature fails to enact this legislation, the director shall rescind the termination of the credit.

C. The director may not terminate under subsection B of this section the recognition and servicing of any income tax credit that is subject by law to preapproval by the Arizona commerce authority unless over any period of four consecutive calendar years both of the following conditions occur with respect to the credit:

1. The department has not received notice of preapproval of any applicant or project for the credit from the Arizona commerce authority.

2. In the report issued under subsection A of this section, the credit was not claimed by or allowed to any taxpayer.