Overview
- Republican lawmakers advanced SB 1106 to align Arizona’s code with Trump’s federal tax changes, with analysts pegging the state revenue hit at $441.3 million next fiscal year and GOP leaders touting $1.1 billion in cuts over three years.
- Democrats introduced a $250 million partial conformity alternative and argue the larger GOP package favors wealthier taxpayers and businesses over working families.
- The Arizona Department of Revenue has already issued forms assuming full conformity and warns the GOP plan would require $20 million and 200 additional staff, though the agency says it will update guidance if needed.
- Republican leaders say they are discussing potential federal reimbursement for immigration-related costs with the Trump administration, while Rep. David Livingston floated redirecting Prop. 123 backfill funds, a proposal facing resistance in both parties.
- GOP sponsors urge swift action to prevent amended returns and have told taxpayers to delay filing if a veto occurs, as Hobbs prepares to detail her budget plan that she says will balance smaller tax cuts.