Senate Republicans Advance Legislation to Deliver Tax Relief Amid Hobbs' Filing Chaos
FOR IMMEDIATE RELEASE
Thursday, February 5, 2026
PHOENIX, ARIZONA— Former Senate Majority Leader Janae Shamp is taking decisive action to protect Arizona patients and local pharmacies with legislation tWith tax filing season underway across Arizona, Senate Republicans are advancing legislation to bring Arizona law in line with the tax forms already released by the Department of Revenue in order to provide immediate clarity and certainty for families, seniors, and small businesses who are filing right now, cleaning up a mess created by Governor Hobbs' recent actions.
SB 1638, sponsored by Senate Finance Committee Chairman J.D. Mesnard, passed committee this morning with all Democrats voting no, even as the Governor's own administration acknowledges that state tax forms put out by her own Department of Revenue currently assume full conformity with federal tax law—exactly what is in SB 1638.
While not the approach preferred by legislative Republicans, it follows Governor Hobbs' veto last month of the Legislature's original tax conformity package, which would have codified the tax cuts passed by Congress under President Trump's One Big Beautiful Bill, while replacing tax deductions that primarily benefit higher-income earners, such as the expanded State and Local Tax (SALT) deduction, with additional tax relief aimed at helping working families and retiring seniors. In a letter sent to legislative leaders this week, the governor confirmed the forms put out by her Department are already in use, despite her desire to roll back some of what they contain, especially when it comes to small businesses.
That disconnect between the governor's preferred policies and what her department has instructed taxpayers to do has left taxpayers and preparers caught in the middle. Without legislative action, Arizonans could follow the state's own filing instructions now, only to be told later they owe more money or must amend their returns.
SB 1638 resolves that conflict and locks in the tax relief currently reflected on those forms, including tax cuts for working families, seniors, and small businesses, charitable giving relief, and provisions such as no tax on tips and no tax on overtime, all of which were contained in the One Big Beautiful Bill.
Because the Governor vetoed the Legislature's original conformity bill, which also included an expanded child tax credit and a childcare expense deduction, those benefits regrettably wouldn't be available at this time. However, aligning state law with the forms already in use is necessary to prevent confusion, delays, and forced amended returns.
"The Governor's own letter confirms what taxpayers are already experiencing – her administration released forms assuming full conformity, and she is refusing to back it up in law. This is a failure of leadership, one that has turned this tax filing period into chaos for families and small businesses," said Senator Mesnard. "Hardworking Arizonans should not be punished for following the state's instructions. SB 1638 restores clarity and protects taxpayers from the consequences of Governor Hobbs' actions."
"This is about accountability and certainty," said Senate President Warren Petersen. "Families, small businesses, and seniors are following the guidance the Governor's administration put out, and they shouldn't be forced to pay for her mistakes. The Legislature is taking action to fix a problem her administration created and to shield taxpayers from the fallout."
SB 1638 now advances to the full Senate for consideration.
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For more information, contact:
Kim Quintero
Director of Communications | Arizona State Senate Republican Caucus
kquintero@azleg.gov