In an ironic and unintended twist, Arizona taxpayers could see a tax hike on the heals of the Tax Cuts and Reform Law.
The state will see hundreds of millions of dollars in a windfall, according to a January report from the Arizona Department of Revenue. The report showed that Arizona taxpayers will end up paying as much as $250 Million more in state income taxes in FY 2019 as a result of the federal changes. The number could climb to over $300 million in FY 2020.
But “tax relief delayed is tax relief denied,” says NFIB/Arizona State Director Farrell Quinlan.
NFIB/AZ joined with several other business groups to urge Gov. Ducey to pass on that savings to taxpayers. “There is little doubt that the Tax Cuts and Jobs Act passed in Washington DC represents a big win for Arizona workers and job creators,” according to the letter. “The TCJA provided long-overdue tax relief, cutting both individual and corporate rates while simplifying the tax code. Already the benefits of tax reform have born fruit, with over $175 million put back into the pockets of Arizona families through bonuses, wage increases, expanded benefits and utility rate cuts.”
“That is why we urge state policy makers to return this money back to hardworking taxpayers and head off an unnecessary and economically destructive state income tax increase,” the letter’s authors, including Quinlan, conclude.
Prior to the law’s passage, Arizona ranked among the top half of states for new small business job growth.
That’s according to the latest Paychex Small Business Jobs Index report, which listed Tennessee, Washington, and Florida as the states with the most small business job growth nationwide. Arizona ranked No. 13, behind Virginia and Michigan, and before Ohio, when it came to new small business jobs.
“While small-business job growth slowed this year, it’s important to recall that small businesses led the hiring surge coming out of the recession and maintained high levels of growth for quite some time,” Paychex President and CEO Martin Mucci said. “It will be interesting to see the impact tax reform makes on job and wage growth in the months ahead.”
Click here to read the full report.