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Legislators introduce two measures to conform Arizona tax code while offsetting tax increase

Senator J.D. Mesnard and Representative Ben Toma today announced the introduction of two measures aimed at conforming Arizona's income tax code to federal changes while offsetting the resulting increase in state taxes. The measures are mutually exclusive options that will be introduced in both chambers to hasten passage.

The first measure conforms Arizona to all changes made at the federal level, while reducing tax rates across all brackets by a margin that offsets the estimated increase in tax revenue. The alternative measure conforms Arizona to all but a few of the changes made at the federal level, "de-coupling" on those items that are the main cause of the net increase in tax revenue. Both options achieve revenue neutrality.

Both Senator Mesnard, who chairs the Senate Finance Committee, and Representative Toma, who chairs the House Ways & Means Committee, prefer the first option as it would allow the Department of Revenue to more quickly implement the plan since it only requires a modification of the tax tables. The Department of Revenue is slated to make tax forms and instructions available by January 28. However, the primary goal for Senator Mesnard and Representative Toma remains passing a plan that avoids taking more money from our Arizona taxpayers.

Both measures would apply to tax year 2018 only, allowing discussions to continue regarding the future long-term design of Arizona's income tax code in light of the changes made at the federal level.

Senator Mesnard said, "It is critical that the House and Senate move as expeditiously as possible to pass one of these plans in order to give both clarity and protection to our taxpayers. The clock is ticking."

Representative Toma concurred, saying, "With tax season right around the corner, taxpayers need answers on how to go about filing their taxes. We need to act quickly in a way that keeps our tax code simple and avoids taking any more of the money that Arizonans have earned.”

The sponsors emphasized that it is vital to move these bills through the Legislature swiftly, so the changes can be made before tax forms go out to Arizonans. The bills are expected to be heard in committees next week in an effort to meet the January 28 posting of tax forms.

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