by Ethan Faverino | Feb 15, 2026 | News
By Ethan Faverino |
Governor Katie Hobbs has vetoed a Republican bill, HB 2785, which would have brought Arizona’s income tax law into full conformity with the federal Internal Revenue Code as reflected in the tax forms already issued by Hobbs’ Department of Revenue for the 2025 tax year.
The legislation, passed on February 11, 2026, aimed to protect Arizona taxpayers from uncertainty, the need for amended returns, potential penalties, and mid-season rule changes during the ongoing filing season.
By aligning state statute with the guidance taxpayers are currently following, HB 2785 would have prevented widespread disruption and costly refiles for Arizonans.
The action comes after Governor Hobbs vetoed an earlier Republican tax conformity package that included targeted relief measures—such as no tax on tips or overtime, deductions for seniors, and replacements for the federal SALT deduction with expanded child tax credits and childcare expense deductions.
Following the first veto, the Governor’s administration issued tax forms assuming full federal conformity (including provisions like deductions for qualified tips, overtime pay, certain vehicle loan interest, and additional charitable contributions for standard deduction filers), while repeatedly declining to clarify her position or support changes.
Department of Revenue testimony highlighted the risks of reversing course now, potentially forcing up to one-third of filers to submit paper-only amended returns, incur additional filing costs, and face unexpected tax liabilities months later.
In a press release, House Speaker Steve Montenegro stated, “Arizona taxpayers did exactly what the government told them to do, and the Governor left them exposed. Her Department of Revenue issued tax forms, told people not to delay filing, and testified that changing course would cause massive disruption. Then the Governor vetoed the Legislature’s solution and refused to explain what comes next.”
“That is the opposite of leadership,” added Montenegro. “The House and Senate acted because families, seniors, and small businesses should not be forced to pay penalties, refile returns, or owe unexpected taxes because the executive branch could not get its act together.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Staff Reporter | Feb 2, 2026 | News
By Staff Reporter |
The Republican majority at the Arizona House and Senate are advancing legislation to ensure full income tax conformity.
The state remains without conformity since Gov. Katie Hobbs rejected a solution by the Republican-led legislature amounting to $1.1 billion. Republicans are trying to bring another solution to the table with HB 2785. It’s unclear if Hobbs will pull up a seat for it.
Earlier this month, Hobbs vetoed legislation that would have aligned Arizona tax code with many of the congressional changes passed last summer under the One Big Beautiful Bill Act.
The governor accused Republicans of giving tax breaks to special interests and increasing taxes on working senior citizens. Hobbs said she would only agree to the Democratic minority’s Middle Class Tax Cuts Package.
“I urge you to rethink your partisan political theater and send the Middle Class Tax Cuts Package to my desk,” said Hobbs. “We should not hold tax cuts for over 88 percent of Arizonans hostage in order to force through tax breaks for special interests. Other questions of tax conformity must be decided through budget negotiations, following the precedent set by Governor Ducey.”
Unfortunately for the governor, the Arizona Department of Revenue (ADOR) had already advised Arizonans on how to file under federal tax law changes.
Several days before the governor issued her veto, ADOR notified lawmakers of the impossibility of altering their forms during the filing season. This latest bill from Republicans would codify ADOR’s instructions to taxpayers. Senate Finance Committee Chairman J.D. Mesnard (R-LD13) said the bill wasn’t the preferred approach since it wouldn’t provide as much relief to working families.
“The Department of Revenue has already told taxpayers how to file, and we are compelled to make sure the law and that guidance align, especially since the Department has publicly advised taxpayers not to wait to file,” said Mesnard. “Doing nothing would only guarantee more confusion and force families and businesses to fix the government’s mistakes later. We will never support a plan that requires taxpayers to amend their returns because state leaders failed to act when it mattered. It would be completely unjust.”
Without conformity, Arizonans have no way of knowing the accuracy of their filings. It’s likely taxpayers will need to refile, and even possibly pay more than they are prepared to pay.
House Speaker Steve Montenegro (R-LD29) said Hobbs was to blame for the present burden of impossible compliance facing Arizona taxpayers. The speaker said the governor has refused to communicate further with Republican leadership on conformity.
“Arizona taxpayers are being asked to file on forms that do not clearly match state law, while the Governor offers no answers and no alternative plan,” said Montenegro. “We asked for clarification privately. We asked publicly. We sent a detailed letter. We received silence. With tax season underway, waiting is not an option. This legislation exists because executive inaction left taxpayers exposed, and the Legislature has a responsibility to step in and restore clarity.”
Senate President Warren Petersen (R-LD14) said it was Hobbs’ agency that introduced the deductive provisions for wealthier filers to which she objected.
“It’s unfortunate the Governor has chosen not to work with us. The Legislature is stepping in to provide certainty by conforming state law to the tax forms her DOR has already released, including the State and Local Tax Deduction,” said Petersen. “The Governor would call that provision a tax break for the rich. We do not support the SALT deduction, but her agency has already included it on the forms, leaving the Legislature no choice but to address it. Tax reform was meant to make filing simpler and more predictable, not create confusion, anger, and frustration for Arizona taxpayers.”
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by Warren Petersen | Jan 30, 2026 | Opinion
By AZ Republican Lawmakers |
In the first week of the State Legislature’s session this year, Republicans delivered a major win on our longstanding promise to provide historic relief to millions of hard-working taxpayers in the form of a $1.1 billion tax cuts package. Our action follows years of escalating costs brought about by the failed policies of the Biden-Harris Administration, where Americans struggled to pay bills, put food on the table, and save for their children’s future. The plan would have aligned Arizona’s tax code with the federal reforms championed by President Donald J. Trump and congressional Republicans just this last year, targeting relief where it is needed most and reasserting the Grand Canyon State as one of the most affordable and competitive in the country.
Unfortunately, without much thought, Democrat Governor Katie Hobbs vetoed our package within hours of its passage through both chambers of the Arizona Legislature, denying real, practical relief to the taxpayers she took an oath to serve.
The governor’s veto was cruel and callous toward the people she claims to represent. It also came just weeks after she essentially claimed credit for the recently enacted federal tax cuts that were predominately due to Republicans’ foresight and execution. Her previous words rang hollow with one stroke of her pen, just as tax season is getting under way for Arizonans looking for real leadership from their state leaders.
Governor Hobbs’ veto was not so surprising; she has shot down a historic number of commonsense bills throughout her three-plus years in office. We had hoped, however, in the spirit of bipartisanship, doing the right thing, and putting taxpayers first, that the governor would sign this legislation. Unfortunately, the governor resorted to her partisan roots and adhered to the demands of the radical liberal extremists who control her every move in office.
The historic relief package sent to Governor Hobbs’ desk this month would have provided incredible results for Arizona families and job creators and again positioned our state as a national leader on this front. Our bill would have increased the child tax credit, created a new deduction for childcare expenses, and provided meaningful help for working families, seniors on fixed incomes, and job leaders across the state. Most importantly, the legislation would have given clarity to taxpayers looking to plan ahead and expecting consistency between their federal and state forms and returns.
All these efforts went for not, though, when Governor Hobbs immediately rejected this package.
The governor’s negative action on our bill shows yet again that there are inherent differences between our two parties on the all-important issue of taxes and spending. Republicans believe that Arizonans should keep more of what they earn, and that government should spend within its means—instead of inflating its budgets on the backs of hard-working citizens. Democrats, on the other hand, believe that they are entitled to more of your money to fund socialist projects and programs—like many of the ones in California, New York, and Illinois. There’s a reason why so many Americans are fleeing the aforementioned states (and others) and migrating to Arizona and other Republican-led bastions of freedom: it’s because our states are taking action to cut taxes for families and businesses alike.
In short, Republicans believe that government exists—and works—for the people who elect us at the ballot box. It’s your money, and it’s your government. We are the stewards of your hard-earned dollars, which means it is our job to ensure that government lives within its constitutional jurisdictions and sets up future generations of Americans for success and prosperity. These principles were at the heart of the Arizona tax relief package.
Despite this setback, Arizona legislative Republicans will not cease our efforts to lower taxes and keep our state affordable for all. Over the past two decades, we have authored and passed many pieces of legislation to cut taxes and reduce the cost of living, including a historic flat income tax, tax rebates, and relief for renters and small businesses—among many other cost-saving actions. We will not stand by and admit defeat when a Democrat governor places her special interest friends above hard-working taxpayers. Rather, we will redouble our efforts to put more money into the pockets of the proud men and women we humbly serve.
Contributors to this op-ed include: Senate President Warren Petersen, Senate Finance Committee Chairman J.D. Mesnard, Senate Majority Leader John Kavanagh, and Senate Appropriations Chairman David Farnsworth.
by AZ Free Enterprise Club | Jan 21, 2026 | Opinion
By the Arizona Free Enterprise Club |
At a time when Arizonans are still struggling to recover from years of Biden-era inflation, Republican lawmakers acted swiftly to deliver on their Affordable Arizona agenda. On just the fourth day of the legislative session, they passed SB1106, a tax conformity package that delivered the full benefits of the One Big Beautiful Bill (OBBB) to Arizona taxpayers, families, and businesses. The legislation provided $1.1 billion in tax relief and, just as importantly, immediate certainty for millions of Arizonans heading into tax season.
The very next day, Governor Katie Hobbs vetoed it.
That veto leaves taxpayers facing a potential $1.1 billion tax hike and widespread chaos as filing season begins. This isn’t simply the typical tax policy fight between Democrat and Republican ideologies. But a full display of Katie Hobbs’ failure to lead.
From the outset, she has mishandled this critical issue of federal tax conformity with conflicting messages, unauthorized executive actions, and zero coordination with the Legislature or even apparently her own agencies. The result has been a self-inflicted mess, and Arizona taxpayers will be the ones to suffer the price.
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