September 29th, 2022
Governor Ducey Announces State’s Record Revenues Unlocked Tax Package Year Early
PHOENIX — Governor Doug Ducey today announced Arizona’s surging economy has unlocked the state’s historic flat tax package a full year ahead of schedule.
In a letter to Arizona Department of Revenue Director Robert Woods, Governor Ducey directed the department to implement the next phase of Arizona’s 2.5 percent flat tax for tax year 2023, not 2024 as originally anticipated.
“It’s time to deliver lasting tax relief to Arizona families and small businesses so they can keep more of their hard-earned money,†the governor wrote. “This tax relief keeps Arizona competitive and preserves our reputation as a jobs magnet and generator of opportunity.â€
With enactment of the flat tax in 94 days on January 1, Arizona will have the lowest flat tax in the nation.
Governor Ducey signed the historic tax package into law last year, further reducing and streamlining taxes for Arizonans while protecting small businesses from the threat of a 77 percent tax increase. The 2.5 percent flat tax was scheduled to phase in over three years.
People and businesses are moving to Arizona in droves. The result is a thriving economy with record revenues that have unlocked the nation’s lowest flat tax, indicated by a September 29 joint memo from the Joint Legislative Budget Committee and the Governor’s Office of Strategic Planning and Budgeting.
JLBC and OSPB determined that General Fund revenues excluding the beginning balance in Fiscal Year 2022 were $16.7 billion — exceeding the statutory thresholds required to immediately implement the 2.5 percent flat tax in the coming tax year.
The average taxpayer will receive a 13 percent income tax reduction, saving families $350 a year.
The governor continued in the letter, “It’s no secret that Arizona’s economy is booming. Over the last eight years, we’ve made responsible decisions to live within our means, reduce burdensome government regulations, lower taxes every year and ensure our state remains a great place to live.â€
Arizona’s competitiveness has soared the last eight years:
The state has added 400,000 jobs since 2015.
The Rainy Day Fund sits at the highest level in state history at $1.4 billion. Economists forecast Arizona will have a $4 billion budget surplus through 2024.
Arizona ranks #1 for economic performance, according to the most recent Rich States, Poor States report — the ALEC-Laffer State Economic Performance Ranking.
Here’s what your need to know about what’s changed:
BENEFITS ALL TAXPAYERS: The average taxpayer will receive a 13% income tax reduction, saving about $350 a year.
IMPLEMENTS THE LOWEST FLAT TAX IN THE COUNTRY: Arizona is on track to have a flat tax of 2.5% — the lowest flat tax in America.
KEEPS ARIZONA COMPETITIVE: While states like California, and the federal government, keep driving up taxes on citizens and job creators — in Arizona, we are returning surplus dollars to the taxpayer. Why? Because you earned them. This will continue to attract jobs and people to our state.
PROTECTS VETERANS: Our nation’s greatest heroes will no longer pay taxes on their retirement pay. This saves the average veteran an additional $650 a year.
SUPPORTS SMALL BUSINESSES: Prevents a 77.7% tax increase on small business owners. In Arizona, 99% of businesses are small businesses. Without this reform, small businesses would be crushed.
REDUCES PROPERTY TAXES: Reduces property taxes on small businesses and job creators by 10%, and increases the homeowner’s rebate so the state now covers HALF of homeowners’ primary property taxes.
PROTECTS K-12 DOLLARS: The budget increases investments in K-12 education, and this tax reform DOES NOT impact or reduce any K-12 dollars, including those approved by voters in 2020.
HELPS OUR CHARITIES: Increases the amount an individual can deduct on charitable givings, providing additional support for community non-profits.
PAYS OFF DEBT: While Washington, D.C. racks up more and more debt, Arizona is paying ours off -- nearly $1 billion, plus another $1 billion in pension liabilities.
BUDGETS RESPONSIBLY: Small businesses and families have to balance their checkbooks, and that’s what Arizona is doing. This plan makes sure we don’t spend more than we can afford, with triggers to ensure we meet our obligations and protect the taxpayer.
In Arizona, we believe you deserve to keep the money YOU earn. This plan does that, while continuing to invest in the things that matter — K-12, community colleges, and new roads and bridges.
View details on the budget at https://azgovernor.gov/FY22budget back...
PHOENIX — Governor Doug Ducey today announced Arizona’s surging economy has unlocked the state’s historic flat tax package a full year ahead of schedule.
In a letter to Arizona Department of Revenue Director Robert Woods, Governor Ducey directed the department to implement the next phase of Arizona’s 2.5 percent flat tax for tax year 2023, not 2024 as originally anticipated.
“It’s time to deliver lasting tax relief to Arizona families and small businesses so they can keep more of their hard-earned money,†the governor wrote. “This tax relief keeps Arizona competitive and preserves our reputation as a jobs magnet and generator of opportunity.â€
With enactment of the flat tax in 94 days on January 1, Arizona will have the lowest flat tax in the nation.
Governor Ducey signed the historic tax package into law last year, further reducing and streamlining taxes for Arizonans while protecting small businesses from the threat of a 77 percent tax increase. The 2.5 percent flat tax was scheduled to phase in over three years.
People and businesses are moving to Arizona in droves. The result is a thriving economy with record revenues that have unlocked the nation’s lowest flat tax, indicated by a September 29 joint memo from the Joint Legislative Budget Committee and the Governor’s Office of Strategic Planning and Budgeting.
JLBC and OSPB determined that General Fund revenues excluding the beginning balance in Fiscal Year 2022 were $16.7 billion — exceeding the statutory thresholds required to immediately implement the 2.5 percent flat tax in the coming tax year.
The average taxpayer will receive a 13 percent income tax reduction, saving families $350 a year.
The governor continued in the letter, “It’s no secret that Arizona’s economy is booming. Over the last eight years, we’ve made responsible decisions to live within our means, reduce burdensome government regulations, lower taxes every year and ensure our state remains a great place to live.â€
Arizona’s competitiveness has soared the last eight years:
The state has added 400,000 jobs since 2015.
The Rainy Day Fund sits at the highest level in state history at $1.4 billion. Economists forecast Arizona will have a $4 billion budget surplus through 2024.
Arizona ranks #1 for economic performance, according to the most recent Rich States, Poor States report — the ALEC-Laffer State Economic Performance Ranking.
Here’s what your need to know about what’s changed:
BENEFITS ALL TAXPAYERS: The average taxpayer will receive a 13% income tax reduction, saving about $350 a year.
IMPLEMENTS THE LOWEST FLAT TAX IN THE COUNTRY: Arizona is on track to have a flat tax of 2.5% — the lowest flat tax in America.
KEEPS ARIZONA COMPETITIVE: While states like California, and the federal government, keep driving up taxes on citizens and job creators — in Arizona, we are returning surplus dollars to the taxpayer. Why? Because you earned them. This will continue to attract jobs and people to our state.
PROTECTS VETERANS: Our nation’s greatest heroes will no longer pay taxes on their retirement pay. This saves the average veteran an additional $650 a year.
SUPPORTS SMALL BUSINESSES: Prevents a 77.7% tax increase on small business owners. In Arizona, 99% of businesses are small businesses. Without this reform, small businesses would be crushed.
REDUCES PROPERTY TAXES: Reduces property taxes on small businesses and job creators by 10%, and increases the homeowner’s rebate so the state now covers HALF of homeowners’ primary property taxes.
PROTECTS K-12 DOLLARS: The budget increases investments in K-12 education, and this tax reform DOES NOT impact or reduce any K-12 dollars, including those approved by voters in 2020.
HELPS OUR CHARITIES: Increases the amount an individual can deduct on charitable givings, providing additional support for community non-profits.
PAYS OFF DEBT: While Washington, D.C. racks up more and more debt, Arizona is paying ours off -- nearly $1 billion, plus another $1 billion in pension liabilities.
BUDGETS RESPONSIBLY: Small businesses and families have to balance their checkbooks, and that’s what Arizona is doing. This plan makes sure we don’t spend more than we can afford, with triggers to ensure we meet our obligations and protect the taxpayer.
In Arizona, we believe you deserve to keep the money YOU earn. This plan does that, while continuing to invest in the things that matter — K-12, community colleges, and new roads and bridges.
View details on the budget at https://azgovernor.gov/FY22budget back...
