by Matthew Holloway | Feb 28, 2026 | Economy, News
By Matthew Holloway |
The National Federation of Independent Business (NFIB) Arizona issued a policy statement this week urging state lawmakers to prioritize tax certainty for small businesses in the upcoming legislative session.
In a press release, NFIB Arizona urged Arizona policymakers to “take action and align Arizona’s income tax code with the small business provisions that are permanent in federal law,” and consider tax policy changes this year. The group argued that stable and predictable tax policy is essential for small businesses to plan, invest, and grow.
NFIB Arizona also highlighted concerns about potential tax increases and shifting tax policy, emphasizing that uncertainty in state taxes could discourage investment and expansion by small businesses across Arizona. The organization represents thousands of small business owners in the state.
In its release, NFIB Arizona pointed to the Arizona House and Senate GOP plan to protect taxpayers during the filing season, stating that lawmakers should avoid policies that could lead to higher costs or an unstable tax environment for small business operators.
“It’s good to hear that the legislative majority has the back of small business and will not allow for a surprise tax increase for the 2025 tax year,” NFIB State Director Chad Heinrich said in a statement. “That’s great for 2025, which is in the books.”
He added, “Small businesses are actively operating in 2026 without having the certainty needed to make investments now. We will continue to urge lawmakers to take action and align Arizona’s income tax code with the small business provisions that are permanent in federal law so that Main Street can operate and grow their businesses with certainty.”
NFIB Arizona’s statement follows an ongoing debacle at the Arizona State Capitol over the state’s conformity with 2025 federal tax changes between the Republican-led legislature and Democrat Governor Katie Hobbs. Hobbs vetoed a Republican bill, HB 2785, which would have brought Arizona’s income tax law into full conformity with the federal Internal Revenue Code on Feb. 12. The group said tax certainty would help small businesses make long-term hiring and investment decisions.
At the time, the NFIB wrote in a statement, “Twice, the Legislature has taken responsible action to protect hardworking Arizonans from tax uncertainty. Twice, Governor Hobbs has chosen political gamesmanship instead—turning something as mundane as tax conformity into a partisan game.”
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 | Feb 14, 2026 | Economy, News
By Ethan Faverino |
The latest survey from the National Federation of Independent Business (NFIB) reveals that small business optimism in the U.S. dipped slightly at the start of 2026. The Small Business Optimism Index declined by just 0.2 points in January to 99.3, yet it remains above the 52-year average of 98.
Among the index’s 10 key components, 7 declined, while only 3 improved. The positive standout shift came in expectations for real sales volumes, which jumped by 6 points, with a net 16% of owners now anticipating stronger sales in the coming quarter.
However, uncertainty notably climbed, as the Uncertainty Index increased by 7 points to 91. Much of this rise stemmed from more owners expressing doubt about whether the current environment favors business expansion.
“While GDP is rising, small businesses are still waiting for noticeable economic growth,” stated NFIB Chief Economist Bill Dunkelberg. “Despite this, more owners are reporting better business health and anticipating higher sales.”
In Arizona and similar regions, a cautious mood persists, with many business owners hesitant to pursue expansion. NFIB Arizona State Director Chad Heinrich noted that ongoing tax-related uncertainties are adding to these concerns, while NFIB data shows taxes are the leading problem for 18% of business owners.
“The optimism index remains stable, but small business owners remain cautious about the future and whether it’s a good time to expand their operations,” explained Heinrich. “The limbo Main Street Arizonans find themselves in this tax season only exacerbates their uncertainty. Small business owners need tax conformity from policymakers now.”
A new addition to this month’s report, the Small Business Employment Index, registered 101.6 in January—down nearly a point from December but still 1.5 points above its historical average of 100 and marginally higher than the 2025 average. This suggests the labor market for small businesses remains relatively balanced.
According to the NFIB Monthly Jobs Report, overall business conditions showed improvement in owners’ self-assessments, with 14% now rating their operations as excellent (up 5 points) and fewer classifying them as only fair (down 7 points to 27%).
Investment activity picked up as 60% of owners reported capital expenditures over the past six months—the highest share since late 2023—mostly directed toward new equipment.
On the labor front, challenges eased somewhat, with businesses citing labor quality as their top issue; the share fell for the third straight month to 16%, and unfilled job openings dropped to 31% (still above the long-run norm).
Inflationary pressures linger, however, as 26% of owners reported raising prices in January, and 32% plan increases in the next few months.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
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 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 Jonathan Eberle | Aug 17, 2025 | Economy, News
By Jonathan Eberle |
Main Street confidence ticked upward in July, with the NFIB Small Business Optimism Index rising 1.7 points to 100.3, edging above its long-term average for the first time in months. The lift was driven largely by more owners reporting better business conditions and viewing it as a good time to expand.
The latest figures, however, paint a mixed picture. While sentiment improved, NFIB’s Uncertainty Index climbed eight points to 97, and labor quality has re-emerged as the top challenge, cited by 21% of owners, the highest share since early spring.
Survey results show growing confidence in day-to-day operations. Thirteen percent of owners rated their business health as “excellent,” up five points from June, and 52% said it was “good,” up three points. Reports of “fair” or “poor” conditions declined. Owners’ outlook on the economy also improved: the net share expecting better business conditions jumped 14 points to 36%, well above historical norms. Sixteen percent said it is a good time to expand, up from 11% last month.
Even with the improved outlook, sales remain a point of concern. Eleven percent named poor sales as their most pressing problem — the highest since February 2021. Inflation worries held steady at 11%, the lowest level since September 2021, though 28% plan to raise prices in the months ahead, a sign that cost pressures persist.
Worker shortages remain acute. Thirty-three percent of owners reported job openings they could not fill, the lowest since December 2020 but still well above average. Of those hiring, 84% said they had few or no qualified applicants. Plans to boost pay are cooling: 27% reported raising compensation in July, down six points, and 17% plan to do so in the next three months. Labor costs were named the top concern by 9% of respondents.
Capital investment showed modest improvement. Fifty-five percent of owners reported spending in the past six months, with the largest share buying new equipment. Still, plans for future capital outlays remain below long-term averages. Borrowing conditions are relatively stable, with only 4% saying their last loan was harder to get. Interest rate concerns remain low, though 25% of owners borrow regularly — a historically small share.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
