Veridus Advisory: Governor Hobbs Vetoes GOP Tax Conformity Package

Dear clients,

This morning, Arizona Governor Katie Hobbs vetoed a GOP-led tax cuts package - forcing legislators back to the negotiating table to discuss to what degree Arizona will conform to federal tax code changes.

The Republican proposal - every Democrat voted in opposition - would have had Arizona mostly conform with federal tax code changes approved by Congress last year with H.R. 1. The Republican legislative plan would slash taxes by an estimated $440 million in the coming year, or $1.1 billion over the next three years. Governor Hobbs prefers a more targeted “Middle Class Tax Cuts” package. It would cut taxes by $250 million in the first year.

Time is running short. Arizona Department of Revenue officials testified this week that taxpayers are already beginning to file their tax returns, but first need to know what aspects of the federal tax changes our state will adopt.

Also on Friday, Governor Hobbs hosted a press conference with Democratic legislative leaders to advance her own tax cuts package. Her Office of Strategic Planning and Budget will release the Governor’s fiscal 2027 Executive Budget later this afternoon. We will send an update with those details.

Sincerely,

The Veridus Team