Arizona Tax Conformity Dispute Headed to Budget Talks After Veto

Feb. 18, 2026, 10:19 PM UTC

Arizona officials are urging taxpayers to use the state’s tax forms to file their returns, even as the governor and lawmakers continue fighting over aligning the state’s tax code with those forms.

Republicans, who control the Legislature, are preparing to press for full conformity with President Donald Trump’s 2025 tax law in the state’s budget negotiations, a top lawmaker said Wednesday. Gov. Katie Hobbs (D) last week vetoed a Republican measure (HB 2785) to do just that, arguing the federal law’s business deductions should be part of budget talks.

“We’re going to insist in the budget discussions that this ...

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