With Arizona’s legislative session scheduled to close this week, small business owners are still left in a lurch over a lack of tax conformity.
Twice this year Gov. Katie Hobbs has vetoed legislation that would have provided full conformity in the tax code with the One Big Beautiful Bill Act passed last summer. The governor maintains that the best path forward would not be full conformity, but rather partial.
Gov. Hobbs wanted the Republican-led legislature to get on board with the Democratic minority’s Middle Class Tax Cuts Package.
The Arizona Free Enterprise Club, a free market policy organization, said Hobbs’ preferred conformity package would require Arizonans to file taxes twice and increase taxes by $200 million.
File your taxes twice. Pay more. Welcome to Katie Hobbs’ Arizona.
After vetoing two full conformity bills, Hobbs helped turn what should have been a routine tax update into a full-blown mess in the middle of filing season. Her administration issued forms based on full… pic.twitter.com/eS5n6tiWfm
That threat of double-filing, per Senate President Warren Petersen (R-LD14), has been mitigated because the tax forms sent out by the state aligned with what the Republicans brought to the table (and Hobbs rejected).
Prior to the first veto, the Arizona Department of Revenue issued its advice on filing under the new changes to federal tax law.
Republican leadership in the legislature urged Arizonans to file their taxes, promising to not support any conformity package that would effectively “punish Arizona taxpayers” and require refiling.
“For tax year 2025 we will not support anything that forces Arizonans to refile,” said Petersen.
“Any outcome that requires you to amend your return or pay more is a nonstarter,” said House Speaker Steve Montenegro (R-LD29).
Gov. Hobbs justified her vetoes under the claim that Trump’s One Big Beautiful Bill would require poorer Arizonans to shoulder more of the tax burden.
“We should not hold tax cuts for over 88 percent of Arizonans hostage in order to force through tax breaks for special interests,” said Hobbs. “Other questions of tax conformity must be decided through budget negotiations, following the precedent set by Governor Ducey.”
Sen. Petersen rejected Hobbs’ view of the federal tax changes.
Petersen dismissed Hobbs’ claim as “a nice talking point” that ignored what he says is the reality of how the federal legislation impacts an overwhelming majority of the state’s business transactions.
“That’s just not true,” said Petersen. “We’re talking about tax on tips, we’re talking about tax on car interest loans, we’re talking about no overtime. These are not rich people. These are small business owners. 90 percent of business transactions are small business owners.”
“It’s a nice talking point, but it’s really not true.”
Arizona Senate President Warren Petersen joined @AZMorningNews to push back on Gov. Katie Hobbs after she vetoed Arizona tax conformity and tax-cut bills tied to federal changes.
Chad Heinrich, Arizona director of the National Federation of Independent Business (NFIB), toldThe Phoenix Business Journal that the lack of conformity will cause increased taxes on over 700,000 small businesses in Arizona. Heinrich blamed Hobbs.
“Not conforming with the key business provisions is, in practical effect, a tax increase on the Arizonans who can least absorb it — those who own and operate Arizona’s small businesses,” said Heinrich. “The Legislature has done its part. Governor Hobbs should finish the job, now, before one more small business owner has to guess about their future.”
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Rep. Eli Crane (R-AZ-02) introduced a bill to impose a three-year moratorium on H-1B visas while major reforms occur in the program.
The bill introduced Wednesday, the End H-1B Visa Abuse Act of 2026, proposes a laundry list of program reforms to include:
Reducing the annual H-1B cap from 65,000 (not including the 20,000 for advanced degree holders) to 25,000;
Eliminating existing exemptions;
Replacing the lottery system with a wage-based selection system;
Requiring employers to certify inability to source qualified American workers;
Requiring employers to prove no layoffs occurred;
Setting the minimum H-1B wage at $200,000 per year;
Barring H-1B workers from holding multiple jobs;
Prohibiting third-party staffing agencies from employing H-1B workers;
Prohibiting H-1B workers from bringing dependents into the country;
Prohibiting federal agencies from sponsoring or employing nonimmigrant workers;
Ending Optional Practical Training (OPT);
Prohibiting H-1B holders from adjusting status to permanent residency; and
Requiring nonimmigrants to depart the U.S. before changing to another nonimmigrant status.
Crane called the H-1B Program a “flawed process” that needed years of work to restore fairness in employment.
“The federal government should work for hardworking citizens, not the profit margins of massive corporations. We owe it to the American people to prevent the broken H-1B system from boxing them out of jobs they are qualified to perform,” said Crane. “The End H-1B Visa Abuse Act of 2026 would provide greater access to employment, strengthen protocols in the visa process, and prioritize the livelihoods of Americans.”
Rep. Paul Gosar (R-AZ-09) signed on as an original cosponsor, along with Republican Reps. Brandon Gill (TX), Wesley Hunt (TX), Tom McClintock (CA), Keith Self (TX), and Andy Ogles (TN).
Gosar expressed discontent with a program as a cost-saving measure for businesses at the expense of American employment rates.
“The H-1B program has been hijacked to replace American workers with cheaper foreign labor — plain and simple. This bill slams the brakes on a system that’s rigged against our own people and puts American jobs first again,” said Gosar. “If a company can hire an American, they should. No loopholes. No excuses. We’re done subsidizing the outsourcing of our own workforce.”
An overhaul of the H-1B Program has been a priority for President Donald Trump.
Last September, the president imposed a $100,000 entry fee for new H-1B visa recipients. However, this fee doesn’t apply to those residing in the U.S., meaning a vast majority of H-1B holders are exempt.
New data on lottery pool entries and entry fee payments reflected that the entry fee had minimal impact on reducing H-1B visas.
Last week, Financial Express reported that the lottery pool reduced by about 27 percent, from 470,300 to 345,000 entries — still far above the 85,000 cap on visas. Only 85 entry fees have been paid.
Attorney General Kris Mayes sued the Trump administration over the fee in December. Mayes cited the need for foreign labor to staff rural school districts and the semiconductor industry.
In December, the Department of Homeland Security announced it would be amending program regulations by replacing the random lottery for a weighted selection to prioritize skills and wages.
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The Arizona Democratic Party (ADP) is heading into the second quarter of this pivotal election year with a negative cash balance exceeding $720,000.
Their latest campaign finance report, filed last week, reflected total-to-date expenditures that nearly tripled their income: over $2.8 million compared to $1 million.
For this first period, ADP’s expenditures did fall below their income: about $67,500 compared to $151,500.
ADP experienced much stronger fundraising in the first quarter of 2022, the last midterm election year. The party’s reported income was over $370,000 and expenditures were $146,000 in that first quarter.
A stark difference was evident between ADP’s campaign finances for the last two off-years as well.
The party’s campaign finance report data for all of 2025 reflected income just below $857,000, but expenditures totaling over $2.7 million. In the first quarter of 2025, the party raised only about $210,000 and spent nearly $360,000.
Comparatively, by the end of 2023, ADP had $1.5 million more in income than expenditures. In the first quarter of 2023, ADP raised nearly $1 million and expended about $227,000.
Some among ADP leadership did warn last summer that the party would go broke by the end of the year. The party has dealt with publicized infighting for about a year.
Unlike other transfers listed, shared expenses with the Navajo County Democratic Committee (NCDC) were categorized as an “unlimited transfer” routing arrangement for ADP funds.
NCDC has a surplus of nearly $1.6 million. Since the beginning of last year, NCDC has sent over $61,000 to ADP.
In that same time period ADP sent back over $107,000 to NCDC, or $46,000 more than NCDC has sent. Their cycle to date reported a cash flow between the two totaling nearly $150,000.
Navajo County accounted for ADP’s second-largest expenditure last year.
AZ Free News contacted ADP about the state of their finances and their fiscal arrangement with NCDC. ADP didn’t respond to our inquiry.
Apart from NCDC, ADP’s number-one expenditure last year by far was $1.7 million last August to the Copper State Values PAC, established and run by Gov. Katie Hobbs’ campaign manager Nicole DeMont and treasurer Dacey Montoya. Since DeMont set up the PAC in December 2024, its primary function has appeared to be a funding arm for the Hobbs reelection campaign.
The PAC sent back $94,500 a few months later, last December.
Discounting the $49,000 received from NCDC last year, ADP’s biggest sources of income were:
United Food and Comm Workers (UFCW) Union Local 99, the largest private-sector union in the state: $100,000
Estate of the late Janet Delesanti: $49,000
Arizona Public Service: $30,000
Elevance Health Inc (formerly Anthem), an Ohio-based insurance company: $25,000
Donalyn Mikles, former attorney for the defunct Arizona Summit Law School and director of the California-based Kling Family Foundation: $20,000
Moms Fed Up, a D.C.-based political activist organization: $20,000
William (Bill) Roe, former chair of the Arizona Democratic Party: $15,000
Pam H. Grissom, founder and longtime (not current) board member for Arizona List: $15,000
AFSCME People, AFSCME’s D.C.-based political action arm: $15,000
The following donated about $10,000 each: University of Phoenix, PMI US Corporate Services, Nextera Energy Resources, Arizona Education Association Fund for Public Education, Arizona State Association of Electrical Workers, and Daniel T. Ling.
None of the Democrats’ other legislative districts or county parties in the state have reported a negative cash balance, with the exceptions of Santa Cruz County Central Democratic Committee and La Paz County Democratic Central Committee.
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Since taking office last November, Congresswoman Adelita Grijalva (D-AZ-07) has made it clear that defending illegal aliens in her district against deportation will remain a priority.
Unlike her Republican colleagues, Grijalva treats those considered illegal aliens residing in her district as her constituents. To her, citizenship doesn’t determine who qualifies as an American.
“In my district, families span generations, borders, and cultures — but they are unequivocally American,” said Grijalva.
In my district, families span generations, borders, and cultures—but they are unequivocally American.
A president showing up to the Supreme Court to challenge that isn’t normal.
It’s an attempt to redefine who belongs in this country.
We won't let him.
— Rep. Adelita Grijalva (@Rep_Grijalva) April 1, 2026
In her criticism of President Donald Trump’s promise to prioritize the “worst of the worst” for deportation proceedings, Grijalva has indicated the need for additional justification when deporting those whose only apparent crime was crossing the border and remaining in the country illegally.
Of the approximately 50 press releases Grijalva has issued since taking office, nearly half were issued in defense of illegal aliens and opposition to Immigrations and Customs Enforcement (ICE).
Of her approximately 200 posts on X, nearly one-third were posts in defense of illegal aliens as valid Arizona residents, demanding the abolition of ICE, or opposition to immigration enforcement efforts.
Of her 14 remarks in the congressional record (excluding recognitions and honorings of individuals), three were focused on opposing ICE and stricter immigration enforcement.
Grijalva has made good on her repeated promise to investigate and provide oversight of ICE detention facilities. She has conducted three visits to the Arizona Removal Operations Coordination Center at the Phoenix-Mesa Gateway Airport, Eloy Detention Center in Eloy, and Florence Federal Detention Facility in Florence.
The congresswoman has participated in at least eight protests against ICE and this administration’s immigration enforcement policies.
Last month, Grijalva offered compromise on her refusal to pass DHS funding through her introduction of two amendments. These amendments, not adopted, would have required federal agencies to obtain tribal government approval for immigration enforcement actions on tribal lands, and prohibited the federal government from creating or maintaining lists of individuals protesting at immigration enforcement activities.
The same day, Grijalva demanded the dismantling of ICE.
Secretary Noem ran a department that terrorized our communities, trampled on constitutional rights, and murdered American citizens.
Still, removing Noem does not root out the lawlessness at ICE.
Dismantle ICE.
— Rep. Adelita Grijalva (@Rep_Grijalva) March 5, 2026
Grijalva’s commitment is reflected through her actions, notably the significant volume of her constituent work dedicated to illegal aliens.
The congresswoman has participated in at least three forums in her district addressing ICE activity. One forum that Grijalva co-hosted with Tucson Mayor Regina Romero focused on advising illegal aliens of their rights and best ways to avoid immigration enforcement activity.
Earlier this month, Grijalva and Congresswoman Yassamin Ansari (D-AZ-03) hosted one such forum to brief the community on ICE’s “mass detention centers” in Arizona. Grijalva and Ansari heard testimonies from several illegal aliens and their family members.
In February Grijalva visited and successfully advocated for the release of one Cuban illegal alien seeking asylum, Julia Benitez, who was detained at the Eloy Detention Center.
Then, Grijalva escorted Benitez to the airport. Benitez’s flight was arranged by the Phoenix-based nonprofit Helping With All My Heart (HWAMH).
The nonprofit’s website claims it has operated emergency shelters across the Valley for illegal aliens seeking asylum since 2018. However, tax filings reflect that, up until 2022, HWAMH’s mission statement only reflected work helping the homeless and those with addictions to “find a job and return to society.”
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Gov. Katie Hobbs offered a false justification for her veto of legislation to rename a freeway after conservative activist and Turning Point USA (TPUSA) founder Charlie Kirk.
After backlash over her formal justification for vetoing Senate Bill 1010, Hobbs offered another explanation: she falsely claimed that renaming part of the Loop 202 freeway after Kirk would replace the part of the freeway honoring another individual: the late congressman Ed Pastor.
Pastor, a Democrat, served in the House of Representatives for nearly 25 years, from 1991 to 2015. Pastor died in 2018. His daughter, Laura Pastor, serves on the Phoenix City Council.
Contrary to what Hobbs claimed, the bill had a specific carveout to preserve Pastor’s portion of the freeway.
“That the underlying segments of the Charlie Kirk Loop 202 would retain their names and designations and those underlying segments are the Red Mountain Freeway, the Santan Freeway, and the Congressman Ed Pastor Freeway,” stated the bill.
Arizona Senate President Warren Petersen, a Republican candidate for attorney general, sponsored the bill. Ahead of her veto, Petersen urged Hobbs to continue Arizona’s tradition of honoring legacy by awarding recognition based on impact and not politics.
“Charlie Kirk called Arizona home and built a national movement rooted in free speech, civic engagement, and American values. He inspired millions, especially young people, to get involved and speak up,” said Petersen. “If the governor vetoes this bill, she’s sending a clear message: recognition now depends on political agreement.”
Six years after founding TPUSA in 2012, Kirk moved its headquarters to Phoenix in 2018. Since 2021, the organization has held its annual conference, AmericaFest, in the city.
TPUSA’s student and lifetime membership total runs in the millions, and they have impacted millions more in America and nationally. The organization also manages thousands of college and high school chapters.
Kirk was assassinated last September while speaking at a TPUSA event at Utah Valley University.
The campaign for Republican gubernatorial candidate Andy Biggs, currently congressman, issued a press release on the matter accusing Hobbs of misleading Arizonans intentionally.
“Not only was Katie Hobbs’ decision to veto the Charlie Kirk Loop 202 bill petty and callous, she’s now shamefully misleading Arizonans about why she did it,” said Biggs campaign senior advisor Drew Sexton. “This was a dishonest, partisan act by a weak and ineffective governor who has consistently failed to rise to the moment and lead our state.”
Hobbs’ initial justification for the veto, the one she gave formally, said that lawmakers needed to avoid politicized individuals when choosing who to honor.
The veto letter was a regurgitation of her previous veto letter for another bill seeking to honor Kirk’s legacy.
The governor also vetoed legislation that would have enabled Arizona drivers to purchase a specialty license plate honoring Kirk’s memory.
“I will continue working toward solutions that bring people together, but this bill falls short of that standard by inserting politics into a function of government that should remain nonpartisan,” wrote Hobbs.
Hobbs expressed sorrow over Kirk’s assassination, but said that wasn’t enough to overshadow his political background.
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