Tax conformity with the Trump tax plan which was passed by Congress in December 2017 has been loping along in the Arizona Legislature … until today. This morning, the former Speaker and current Senator JD Mesnard did a presentation on what he wants us to pass for tax conformity. He has been quoted in the newspaper as saying that he wants tax conformity to be “revenue neutral”.
If Arizona decides to do full tax conformity, as Governor Ducey has suggested, Arizona will gain an estimated $150-$200 million per year extra for the general fund. If we do revenue neutral tax conformity as Mesnard has suggested, we will throw that extra $150-200 million revenue out the window by offering tax cuts along with tax conformity.
The December 2017 Trump tax plan raised the standard deduction and eliminated some itemized deductions. If you make less than a six-figure salary and you don’t itemize your taxes, you will be better off with tax conformity.
In order to ram these bills through the committees, the Senate Finance Committee and the House Ways and Means Committee have been rescheduled for Monday, January 28 at 10 AM. This is not the regular meeting time. We are required to vote on HB2522 and SB1143 simultaneously.
These bills were placed on agendas late today. If you are on Request to Speak (RTS), you have until Monday morning to voice your opinion. If you believe that Arizona should say “NO!” to more tax cuts and should use the money to cover state needs (or prop up the rainy day fund in the event of a Wall Street downturn), you want clean tax conformity— NOT revenue-neutral tax conformity as HB2522 and SB1143 propose. All hands on deck.