PHOENIX (April 22, 2026) – In an op-ed for The Phoenix Business Journal, NFIB State Director Chad Heinrich warns that failing to fully conform the state’s tax code with the changes made under the Working Families Tax Cut Act, will result in a tax hike on Arizona’s more than 700,000 small businesses.

In the op-ed, Heinrich writes:

“Small businesses employ more than 40% of Arizona’s workforce. They are not asking for a special break — they are asking state government to complete what Congress started, and to do it before the session ends.

“Not conforming with the key business provisions is, in practical effect, a tax increase on the Arizonans who can least absorb it — those who own and operate Arizona’s small businesses. The Legislature has done its part. Governor Hobbs should finish the job, now, before one more small business owner has to guess about their future.”

CLICK HERE to read the full op-ed. Excerpts are below:

Arizona Small Businesses (Nervously) Await State Tax Conformity Deal Before Session Ends

Phoenix Business Journal

By: Chad Heinrich

April 22, 2026

Tax Day has come and gone, and more than 33 million small business owners nationwide are benefiting from the Working Families Tax Cut Act, which made the 20% Small Business Tax Deduction permanent last summer. […]

Arizona’s more than 700,000 small businesses are feeling the benefit of the federal law on their federal returns — and that matters. […] But the federal law did more than make the 20% deduction permanent, and the other provisions are where Arizona’s state-level decision actually matters. […]

Without that conformity, Arizona businesses cannot fully claim at the state level the expensing and depreciation Congress made permanent at the federal level. That is the conformity debate at the Capitol right now — and it is where the jobs, investment, and certainty are on the line.

To their credit, legislative leaders have advanced serious conformity proposals this session. The obstacle has been the Governor’s position.

Governor Hobbs has signaled she wants to hold the small business provisions as leverage in broader budget negotiations, while prioritizing populist provisions like no tax on tips, no tax on overtime, and an enhanced senior deduction. […] Trading permanent economic-growth policy for temporary consumer relief that is already largely baked in is a bad trade for Arizona.

And the rationale that conformity’s benefits flow mainly to high-income filers badly misreads who actually claims these deductions. […] Leaving them in limbo isn’t targeting the wealthy. It’s leaving Main Street in a lurch. […]

Every day the Legislature and the Governor fail to act on conformity is another day Arizona’s small business owners are making investment decisions in the dark. […]

Small businesses employ more than 40% of Arizona’s workforce. They are not asking for a special break — they are asking state government to complete what Congress started, and to do it before the session ends.

Not conforming with the key business provisions is, in practical effect, a tax increase on the Arizonans who can least absorb it — those who own and operate Arizona’s small businesses. The Legislature has done its part. Governor Hobbs should finish the job, now, before one more small business owner has to guess about their future.

Chad Heinrich is the Arizona State Director of the National Federation of Independent Business and managing partner for Heinrich Public Affairs in Phoenix.