Governor Ducey announces the state’s unsealed tax package ahead of the year

PHOENIX – Governor Doug Ducey announced today that Arizona’s economy has opened the state’s historic flat tax package a full year ahead of schedule.

On paper According to Arizona Department of Revenue Director Robert Woods, Governor Ducey has ordered the department to implement the next phase of Arizona’s 2.5 percent tax for the 2023 tax year, but not 2024 as originally expected.

“Now is the time to deliver permanent 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 maintains our reputation as a job magnet and generator of opportunity.”

With the implementation of the flat tax within 94 days of January 1, Arizona will have the lowest tax rate in the country.

Governor Ducey signed the historic tax package into law last year, to further reduce and strengthen taxes for Arizonans while protecting small businesses from the threat of a 77 percent tax increase. The 2.5 percent flat tax is slated to take effect over three years.

People and businesses moved to Arizona. The result is a booming economy with record incomes that have unlocked the lowest taxes in the country, represented by September 29 joint memo of the joint budget committee and the Governor’s Office on Strategic Planning and Budgeting.

JLBC and OSPB determined that General Fund revenue other than the initial balance for fiscal year 2022 will be $16.7 billion – exceeding the statutory limit required for the immediate implementation of the flat tax. 2.5 percent in the next fiscal year.

The average taxpayer will receive a 13 percent reduction in income tax, saving families $350 per year.

The governor continued in the letter, “It’s no secret that Arizona’s economy is booming. Over the last eight years, we have made responsible decisions to live within our means, reduce burdensome government regulations, reduce annual taxes and ensure the state remains a great place to live.

Competition has grown in Arizona over the last eight years:

For more information on how the historic tax package will affect Arizonans, click HERE.


Governor Ducey has reformed and cut taxes every year he has been in office.

In 2015, when he took office, the state was operating at a $1 billion deficit. Now, Arizona is projected to have a $4 billion surplus from 2021 to 2024. Governor Ducey brought the Arizona Rainy Day Fund to $1.4 billion. Governor Ducey made it a priority to keep spending below revenue, resulting in Arizona’s longest consecutive run of surpluses since 2000.

In 2019, the credit company Moody’s Investors Service announced today that it is improving Arizona’s credit rating from Aa2 to Aa1, the second highest rating offered by Moody’s. Arizona is also the only state to receive two ratings upgrades from Moody’s in six years.

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