By Daniel Stefanski |
Arizona’s Republican Senate President is standing with families over a recent decision from the Internal Revenue Service (IRS).
Late last week, the Arizona State Senate Republican Caucus announced that President Warren Petersen “is working diligently to come to a resolution that will protect the more than 700,000 recipients from having to give the federal government a portion of [the 2023 Arizona Families Tax Rebate] this tax season.”
According to the Senate Republicans, the IRS recently made the decision to collect federal income taxes on the rebate, which was passed in the 2023 Arizona budget compromise between legislative Republicans and Democrat Governor Katie Hobbs. The caucus noted that “more than a dozen other states have passed similar legislation, in which the IRS concluded those funds were not considered taxable income.”
On February 10, 2023, the IRS released a determination that taxpayers in many of the states that issued special payments in 2022 would “not need to report these payments on their 2022 tax returns.”
In a statement that accompanied his news release, Petersen said, “It makes zero sense that the IRS is choosing to hurt Arizona families by taxing a tax rebate. I’m thankful for the help from Senator Sinema’s office in working to get this matter front and center with the IRS and U.S. Treasury. With tax season less than two weeks away, time is of the essence. While litigation likely isn’t the best approach, I appreciate the Attorney General’s office reaching out to us on this matter.”
The Senate President was critical of Governor Hobbs’ perceived inaction to protect families in this matter, saying, “I am, however, incredibly disappointed our Governor is again nowhere to be found on an issue that could ultimately cost our citizens tens of millions of dollars. I’m calling on her to not turn a blind eye on this issue, as she did with gas prices last spring, and to work with us on solving this problem for Arizona families.”
Petersen’s sharp rebuke follows a back-and-forth between the Governor’s Office and legislative Republicans this past fall, after Hobbs championed “the deployment of the Arizona Families Tax Rebate.” Hobbs said, “I made a promise that when I took office, I would take every opportunity I had to make it easier for Arizonans to provide for their families and lower the cost of living.”
Hobbs’ actions surrounding the issuance of rebates to Arizona families earned a Cease and Desist letter from attorneys for Petersen and House Speaker Ben Toma. The letter highlighted an agreement in the FY 2024 budget that “[n]o letter relating to the Arizona families tax rebate issued under this section shall…reference the governor’s office.” According to the letter, the Arizona Department of Revenue had “distributed, apparently to all individuals who are eligible for the Families Tax Rebate, a letter that advises them to ‘visit the Arizona Department of Revenue’s online claim portal….’ The advertised URL, however, not only explicitly references the Governor but directs users to the Governor’s own website. Further, clicking the designated link on the homepage brings the user not to the Department’s portal, but rather to another webpage in the azgovernor.gov domain that features a video of self-congratulatory bloviations form the Governor.”
Republican Senator Jake Hoffman shredded the action from the Governor’s Office, stating, “The sad reality exposed by this situation is that Katie Hobbs doesn’t care about anyone other than herself. She tried to play fast and loose with the law, as she so often does, and forced Director Woods to violate it.”
Another Senate Republican, T.J. Shope, said, “I know the Governor wanted no part of this tax rebate but thankfully, the Arizona Senate and House caucuses, led by the Arizona Freedom Caucus, stood strong and demanded it be part of the State Budget. When we stick together, we can provide positive things for Arizona’s families.”
President Petersen will try to make contact with liaisons from the IRS and U.S. Treasury Department in an attempt to reverse the decision from the federal government in the days before the new tax season commences.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
