by Matthew Holloway | Jan 15, 2026 | Economy, Must Read, News
By Matthew Holloway |
Republican legislators have sent a $1.1 billion tax relief package to Gov. Katie Hobbs, escalating a high-stakes policy dispute over tax conformity as the state enters filing season.
According to a statement released by House and Senate Republicans, lawmakers rapidly passed House Bill 2153 and Senate Bill 1106, legislation designed to align Arizona’s tax code with federal tax reforms enacted in 2025. Supporters estimate the measures will deliver approximately $1.1 billion in tax relief over the next three years.
The bills now await the governor’s signature.
In a statement posted to X, House Republicans wrote, “With costs still high and tax season underway, Arizona families shouldn’t be left waiting. The Legislature has done its job, now it’s time for the Governor to sign this relief into law.”
Republican leaders said the legislation is intended to provide clarity and certainty for families, small businesses, and tax preparers, particularly as tax season is underway. The package fully conforms Arizona law to recent federal tax changes and codifies provisions such as preventing the taxation of tips and overtime pay.
House and Senate Republicans said the plan is focused on helping working families retain more of their earnings, supporting small businesses and job creators, and ensuring taxpayers receive clear and lawful tax guidance during the filing process.
The legislation’s passage follows criticism from the National Federation of Independent Business (NFIB) over Gov. Hobbs’ separate tax conformity proposal. In a press release earlier this week, NFIB Arizona State Director Chad Heinrich urged lawmakers to reject the governor’s approach and instead advance HB 2153 and SB 1106.
Heinrich argued that Hobbs’ proposal would delay tax certainty by requiring taxpayers to wait until budget negotiations conclude before knowing how Arizona will align with federal tax changes passed in 2025 — potentially leaving taxpayers without clarity until June 2026.
“It’s unclear if the left hand knows what the right hand is doing in the Hobbs administration,” Heinrich said. He criticized the proposal for abandoning 2025 tax forms already posted by the Arizona Department of Revenue and instructing taxpayers to wait until budget negotiations are finalized. “This should be a non-starter,” Heinrich said.
NFIB highlighted HB 2153 and SB 1106 as preferred alternatives, noting that the bills would fully adopt federal tax reforms enacted in 2025, including provisions tied to the One Big Beautiful Bill Act (OBBBA), which the organization said small business owners welcomed for the certainty it provided.
“Small business owners breathed a sigh of relief when the One Big Beautiful Bill Act passed and collectively looked forward to the certainty that it provided,” Heinrich said. “Now, the Governor wants to upend all of that to score partisan political points, breaking precedent with how Arizona has always addressed federal tax changes.”
As previously reported by AZ Free News, legislative supporters say the GOP-backed bills offer broader tax relief than the governor’s more narrowly targeted proposal by fully conforming state law to a wide range of federal tax code changes, including those affecting businesses and itemized deductions.
NFIB noted that Arizona’s small businesses employ approximately 1.2 million people statewide and account for seven out of every ten new jobs created. The organization warned that uncertainty over tax conformity could delay business expansion and hiring.
With the legislation now on the governor’s desk, Republican lawmakers said Arizona families and businesses are waiting to see whether Hobbs will sign the tax relief package or veto another key Republican reform.
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.
by Ethan Faverino | Nov 15, 2025 | Economy, News
By Ethan Faverino |
The NFIB Small Business Optimism Index declined 0.6 points in October to 98.2 points. Despite the small decline, it remains above its 52-year historical average of 98. In a positive sign, the Uncertainty index dropped 12 points to 88, marking the lowest level this year.
NFIB Chief Economist Bill Dunkelberg said, “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits. Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.”
Labor challenges persisted, with a seasonally adjusted 32% of owners reporting unfilled job openings, unchanged for the second straight month, and the lowest since December 2020.
Labor quality was cited by 27% of owners as their single most important problem, up 9 points from September and the highest since November 2021, when it reached 29%. It ranked 11 points above taxes, the second-largest concern. Of the 56% of owners hiring or trying to hire, 88% reported little to no qualified applicants.
Sales and profits declined, as a net negative 13% of owners reported higher nominal sales over the past three months, down 6 points. Positive profit trends fell 9 points to a net negative 25%—the largest contributor to the Index decline.
Among those with lower profits, 33% blamed weaker sales, 16% noted rising material costs, and 9% pointed to both labor costs and price changes.
Pricing pressures eased slightly, with the net percentage of owners raising average selling prices falling from 24% to 21%, though it is still above the historical monthly average of 13%.
30% of small businesses plan to raise prices in the next three months, just down 1 point. An unadjusted 31% reported higher prices, while just 12% reported lower prices.
Inventory gains dropped 3 points to a net negative of 6%. 10% reported stock increases while 15% reported reductions. Supply chain disruptions were cited as the biggest reason for inventory problems, with 60% of owners saying it affected them to some extent.
Capital investments saw 55% of owners reporting outlays in the past six months. Among them, 36% spent on new equipment, 22% on vehicles, and 14% on facility improvements or expansions. 23% plan outlays in the six months.
20% of small business owners expect better conditions, the lowest since April, but well above the historical average of 4%. Only 13% view it as a good time to expand. Business health assessments shifted, with 12% rating their business as excellent, 51% good, 33% fair, and 4% poor.
“A reduction in sales and profits has certainly taken a toll on small business owners’ optimism,” NFIB State Director Chad Heinrich said. “Despite these challenges and the ongoing labor shortage, our members are resilient, with many still trying to create good-paying jobs for Arizonans.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Oct 16, 2025 | Economy, News
By Ethan Faverino |
The National Federation of Independent Business (NFIB) Small Business Optimism Index dropped 2 points in September to a score of 98.8, marking the first decline in three months.
Despite remaining above the 52-year average of 98, the dip reflects growing concerns among small business owners grappling with inflationary pressures, supply chain disruptions, and persistent labor shortages. The Uncertainty Index climbed 7 points to 100, making it the fourth-highest reading in over 51 years.
NFIB Chief Economist Bill Dunkelberg said, “Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”
In Arizona, small business owners echoed with national concerns: “Unfortunately, Arizona small business owners are facing the same sort of challenges we see in the national survey,” NFIB State Director Chad Heinrich said. “The ongoing labor shortage and inflationary pressures are giving small business owners pause in this economy. They’re focused on meeting their customers’ needs and retaining their workforce.”
Key findings from the September survey include:
- Inflation and Supply Chains: Inflation emerged as a significant issue, with 14% of owners citing it as their top business problem, up 3 points from August. A net 24% raised selling prices, up 3 points, and a net 31% plan to increase prices in the next three months, up 5 points. Supply chain disruptions impacted 64% of owners, a 10-point jump from August.
- Labor Market Struggles: 32% of owners reported unfilled job openings, unchanged from August. Of the 58% that are hiring or trying to hire, 88% faced a shortage of qualified applicants. A net 16% plan to create jobs in the next three months (up 1 point) is the highest since January 2025. Labor quality is tied with taxes as the top concern, cited by 18% of owners.
- Inventory and Sales: A net negative 7% viewed current inventory as “too low,” down 7 points—the largest monthly decline in the survey’s history. A net negative 7% reported higher nominal sales over the past three months, up 2 points, but a net 8% expect higher real sales volumes (down 4 points).
- Earnings and Investments: Actual earnings improved, with a net negative 16% reporting profit trends, up 3 points, and the highest since December 2021. Among those with lower profits, 33% cited weaker sales and 17% pointed toward material costs. Capital outlays remained steady, with 56% of owners reporting expenditures, primarily on equipment and vehicles.
- Financing Challenges: A net 7% reported tougher loan conditions, up 4 points and the highest this year. The average rate on short-maturity loans rose 8.8%. Regular borrowing increased, with 26% of owners reporting loans, up 3 points.
Despite these challenges, 57% of owners rated their business health as “good,” up 3 points, while 11% said “excellent,” down 3 points.
Taxes and labor quality tied as the top concerns, each cited by 18% of owners, while poor sales (10%) and government regulations (6%) remained notable issues.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Oct 13, 2025 | Economy, News
By Ethan Faverino |
In a landmark victory for small businesses, Congress has made the 20% Small Business Tax Deduction, also known as Section 199A, a permanent qualified business deduction, ensuring long-term tax certainty for Main Street.
This critical provision allows small businesses to deduct up to 20% of their income, empowering mom-and-pop shops to grow, invest in their workforce, and play their part in giving back to the community.
The decision, signed into law by President Trump, averts a massive tax hike that would have impacted over 33 million small business owners nationwide at the end of 2025.
Making the Small Business Tax Deduction permanent changes the game for Main Street. The tax certainty provided by Congress ensures small businesses can thrive, hire more workers, and compete with larger corporations.
Since its introduction in 2017, the deduction has leveled the playing field for nine out of ten small businesses that file as pass-through entities. Recent NFIB surveys show growing confidence, with small business optimism reaching a five-month high.
The new tax law also includes pro-small business provisions, such as permanent extensions of the 2017 marginal tax rates, preventing up to a 4% tax hike for small businesses and employees.
Enhanced expense and depreciation rules under Section 179 and 168(k) enable business owners to confidently invest in growth, such as making large purchases. Additionally, increased reporting thresholds for IRS forms 1099-K, 1099-NEC, and 1099-MISC reduce paperwork burdens for businesses using platforms like Venmo or PayPal or engaging independent contractors.
The permanent estate tax exemption further supports owners looking to pass their businesses to the next generation or keep them locally owned.
National Federation of Independent Business (NFIB) State Director Chad Heinrich said, “An NFIB-commissioned study by EY found that the Small Business Tax Deduction will increase Arizona’s economic activity by more than $1.4 billion annually, resulting in the creation of 26,000 jobs each year. That means more, good-paying jobs for hardworking Arizonans.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Matthew Holloway | May 7, 2025 | Economy, News
By Matthew Holloway |
The latest job report from the National Federation of Independent Business (NFIB) shows that 34% of small business owners (seasonally adjusted) reported that despite having open positions in April, they could not find employees to fill them. Chad Heinrich, state director for NFIB in Arizona, offered some suggestions for Arizona lawmakers to address the situation and urged the passage of AZ Senate Bills 1069 and 1215.
“Arizona’s small businesses are the foundation of our economy, and our state has a chance to lead the way in empowering them,” Heinrich said in a statement. “Lawmakers have already done good work keeping taxes and regulations in check. Now, I urge them to pass Senate Bills 1069 and 1215. These two measures will lift a significant recordkeeping burden from Arizona’s smallest businesses and safeguard legal proceedings from foreign entity involvement.”
Senate Bill 1069 sponsored by AZ Senator JD Mesnard (R-LD13) would, if enacted, increase the Business Personal Property Tax exemption to $500,000 per taxpayer, relieving the tax burden on small business owners and “reduce record-keeping and compliance costs enormously,” according to the NFIB.
The bill was passed by the Senate 17-9 with four Senators not voting and passed the House Ways and Means Committee on March 5th.
The second measure, Senate Bill 1215, proposed by AZ Senate President Pro Tempore Vince Leach would require the disclosure of third-parties sponsoring predatory lawsuits against Arizona small business owners and was passed by the House Judiciary Committee on March 26th and is pending consideration by the House Rules Committee. The bill is also supported by the Arizona Chamber of Commerce & Industry, the Arizona Manufacturers Council, the Arizona Lodging & Tourism Association, and the Arizona Trucking Association.
Courtney Coolidge, executive vice president of the Arizona Chamber of Commerce & Industry said in a February statement, “Third party litigation funding has grown to an estimated $15 billion industry in the U.S. Essentially what happened is funders pour money into lawsuits in exchange for the settlement. This is a simple transparency bill to ensure transparency in our courts, protect litigants and safeguard against foreign influence. This is not just an Arizona issue; several states have passed this with bipartisan support.”
Chief Economist Bill Dunkelberg explained the NFIB report’s findings saying, “Small business owners remained open to hire and grow their workforce in April. While the percent of open positions decreased a bit, Main Street firms are still struggling to find qualified applicants for their plentiful open positions.” Per the NFIB report, the percentage of unfilled job openings spiked in 2021-22 and have returned to the lowest level observed since January 2021.
Per the NFIB report, the percentage of unfilled job openings spiked in 2021-22 and have returned to the lowest level observed since January 2021 with the largest concentration of openings in construction, transportation, and manufacturing.
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.
