Gov. Doug Ducey wouldn’t close the door to a special session this year to conform Arizona’s income tax code the federal code, but said he believes the issue can wait until the legislative session begins in January.
“We’re talking about what needs to be done, if anything, in special session. I’m confident that we can do what we need to do in the traditional session, but we are having some discussions around that,” Ducey told reporters on Friday.
House Speaker J.D. Mesnard, R-Chandler, is pushing for a special session to conform Arizona’s tax code with the federal tax reform package passed at the end of 2017. The federal tax bill presents unique questions for Arizona’s annual conformity exercise: Fully conforming would eliminate a host of deductions and write-offs, which is estimated to cost Arizona taxpayers somewhere between $174 million and $228 million in the current fiscal year.
Mesnard is opposed to full conformity because it would increase Arizonans’ taxes.
Mesnard told the Arizona Mirror that he believes there’s a 50-50 chance of a special session prior to the start of the regular legislative session in January. Mesnard and other key Republicans say it’s preferable to deal with the issue before the New Year to avoid confusion among taxpayers and so the Arizona Department of Revenue can draw up its tax forms and booklets for the year.
“Discussions are ongoing. Nothing is foreclosed or guaranteed. I think we’re all on the same page that we want to do right by our taxpayers,” Ducey said. “What that looks like obviously remains to be seen, and the timing of it still remains to be seen.”
Mesnard said he’s operating under the assumption that Ducey shares his position on full conformity, though he couldn’t say with certainty what the governor’s position is.
Ducey has pledged since his first gubernatorial campaign in 2014 to never raise taxes.