Overview
- Republican lawmakers approved a measure to fully align Arizona’s tax code with recent federal changes, while Gov. Katie Hobbs is expected to veto after her office signaled no action Thursday.
- Legislative analysts peg the GOP plan’s revenue hit at about $441 million this year, compared with roughly $250 million for Hobbs’ partial conformity proposal.
- The Department of Revenue says the GOP approach would require about $20 million and 200 additional staff, and it has already released tax forms assuming full conformity.
- Republicans argue swift passage avoids amended returns and benefits the middle class, while Democrats say the bill favors corporations and excludes many seniors without retirement funds from a key credit.
- How to offset the revenue loss remains unresolved, with ideas floated such as seeking federal reimbursement and repurposing funds tied to Proposition 123, and the bill also positions Arizona for a federal voucher program that lacks finalized rules.