By the Arizona Free Enterprise Club |
This year, the tax cuts from the Trump Tax Cuts and Jobs Act of 2017 were set to expire. Failing to extend the cuts would have resulted in a 22% tax hike for the average taxpayer. For Arizonans, it would have meant an average tax increase of $2,824. And there would have been an even larger tax increase for Arizona small businesses. Thankfully, earlier this summer Congress finally passed Trump’s One Big Beautiful Bill (OBBB), not only extending the personal income tax cuts from 2017 but making them permanent.
The OBBB also included several new tax provisions as well, such as no tax on tips and overtime, an increase in the standard deduction, full expensing and special depreciation for business, just to name a few. This assortment of changes to federal tax law now leaves states like Arizona with a big decision to make: provide partial conformity tax relief, full tax relief, or do nothing and provide no conformity tax relief at all.
This should be an easy choice, as choosing the non-conformity option would leave Arizona taxpayers with one big ugly tax bill to pay.
How big of a tax bill?
