Stearns v. Arizona Department of Revenue

OPINION

THOMPSON, Judge.

¶ 1 This is an income tax case. We must decide whether the term “income subject to tax” in the credit formula, Arizona Revised Statutes (A.R.S.) section 43-1071(A)(3) (2006), refers to adjusted income reduced by applicable exemptions and deductions. We hold that it does and therefore affirm the Arizona Tax Court’s grant of summary judgment to the Arizona Department of Revenue (the Department).

BACKGROUND

¶ 2 Ronald L. Stearns and Audrey L. Stearns (Taxpayers) reside in Arizona. During the relevant period, Mr. Stearns worked for two different national accounting firms that…