Ducey signs income tax bill that cuts business taxes, losing $31 million in state revenue

PHOENIX (AP) - A bill designed to align the state's income tax code with federal tax law that will cut state revenue by $31 million has been signed by Gov. Doug Ducey.

Senate Bill 1188 includes a provision allowing individuals and businesses to expense up to $500,000 in investments instead of the normal $25,000. The Legislature's budget committee estimates it will cut $31 million in revenue.

The budget Ducey signed in March had big spending cuts and doesn't account for the tax cut. But an unexpected revenue increase will keep the state's books balanced.

Thursday's signing leaves the state with $3 million in the bank instead of $33 million when the budget year ends on June 30, 2016.

The federal provision passed during the Great Recession was extended for one year in December.