Arizona Gov. Doug Ducey has announced that the state is set to implement his planned flat-tax package as of Jan. 1, a year ahead of his campaign goal.
According to a release on the Governor's Office website, Ducey sent a letter to Arizona Department of Revenue Director Robert Woods on Sept. 29, directing the department to implement the next phase of Ducey's promised 2.5 percent flat tax rate as of Jan. 1, 2023.
“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 in his letter. “This tax relief keeps Arizona competitive and preserves our reputation as a jobs magnet and generator of opportunity.”
Ducey signed the tax package into law last year, which intended to reduce the threat of a 77 percent tax increase on small businesses, according to the release. The flat tax was scheduled to phase in over three years, ending in 2024, the release added.
"Today, consistent with the law passed last year, we directed @AZDORMedia to enact Arizona’s 2.5 percent flat tax for tax year 2023, not 2024 as originally anticipated," Ducey said in a Twitter post announcing the move.
According to a Sept. 29 memo from the Joint Legislative Budget Committee and the Governor’s Office of Strategic Planning and Budgeting, the state's General Fund revenues for fiscal 2022 were $16.7 billion, above what was required to implement the 2.5 percent flat tax, the release stated. That allowed the tax change to be moved up by a year.
"Arizona’s economy is booming with record revenues," Ducey said in the Twitter post. "We’ve met revenue thresholds to immediately implement the nation’s lowest flat tax on January 1."
The Arizona Chamber of Commerce also announced the change on Twitter.
"Gov. @DougDucey on Day 1 of his campaign promised to reduce the state income tax to as close to zero as possible. Now, 8 years later - and a year ahead of schedule - Arizona will officially have the lowest flat tax in the nation when we ring in 2023," the Chamber said in a Twitter post.