Ariz. Senate panel OKs withholding rates change

Posted: Updated:

PHOENIX (AP) -- The Senate Appropriations Committee has endorsed emergency legislation to boost Arizona's income-tax withholding percentages so a taxpayer's state withholding doesn't change with a reduction in federal rates.

Arizona withholding is based on a percentage of the federal withholding rate. A federal reduction included in the economic stimulus law would have automatically cost the state $73 million in revenue in the fiscal year that ends June 30.

The bill the committee approved on Thursday would hike the state's withholding percentages temporarily. That won't change the amount taken from a worker's paycheck before the federal change that took effect on Wednesday. The state would set its own withholding rate starting next year.

The full Legislature is expected to consider the bill later Thursday.

(Copyright 2009 by The Associated Press. All Rights Reserved.)