By Matthew Holloway |
Republican legislative leaders in Arizona introduced a tax conformity plan on last week, aimed at aligning the state’s tax code with recent federal tax reforms. The proposal, outlined in a joint press release from the Arizona State Legislature, estimates roughly $1.1 billion in tax savings for Arizonans over the next three years.
Senate Finance Committee Chairman J.D. Mesnard (R-LD13) and House Ways & Means Committee Chairman Justin Olson (R-LD25) are sponsoring the plan through two bills: SB 1106 and HB 2153.
According to the release, Republican lawmakers say the conformity effort will provide certainty to taxpayers and tax preparers amid the current filing season. They state the proposal would adjust Arizona’s tax code to reflect provisions of the federal tax overhaul known as the “One Big Beautiful Bill.”
The Republican plan would include measures such as increasing the child tax credit and establishing a deduction for childcare expenses. It would also aim to apply the federal tax reforms to Arizona’s individual and business tax structures.
“This is an urgent matter. With tax season underway, tax professionals and families alike need clear guidance now,” Senate President Warren Petersen said. “Until the Legislature acts and the Governor signs this plan into law, there is real confusion about how to handle state tax returns. We’re urging Governor Hobbs to join us in resolving this issue promptly by signing this historic tax cut when it hits her desk.”
House Speaker Steve Montenegro (R-LD29) is quoted in the release, asserting that formal legislative action is needed to resolve confusion created by recent state tax guidance issued by the governor’s office, which he says assumes legislative action has already occurred.
Montenegro explained, “The Governor jumped ahead of the law by issuing state tax guidance this week that assumes legislative action – which hasn’t happened yet – and her recent executive order only deepens confusion. This kind of unilateral overreach undermines the process and leaves families, tax preparers, and businesses stuck in the middle.”
He added, “The Legislature is moving to restore certainty, respect the separation of powers, and make sure Arizonans have clear, lawful guidance.”
The press release states that Republican sponsors contend the plan’s focus is on working families, seniors on fixed incomes, and small businesses, and that it would codify measures such as preventing taxation of tips and overtime pay.
SB 1106 and HB 2153 are set to be debated in the Legislature as the session begins.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
