Arizona Gubernatorial Candidate Proposed Income Tax Cuts

Gubernatorial candidate Andy Biggs has proposed an incremental elimination of the state income tax in Arizona.

Updated on Sept. 22, 2026 in Taxes

Bold flat-color editorial illustration of layered sandstone rock strata, representing the stability and structural nature of state fiscal policy. — Arizona gubernatorial candidate Andy Biggs has proposed a plan to incrementally eliminate the state's income tax, which currently accounts for one-third of total revenue. AI Illustration. Upload story photo >

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Andy Biggs recently announced a policy platform centered on the incremental elimination of Arizona's state income tax. The proposal aims to restructure how the state funds its $18 billion total tax revenue budget.

Why it matters

The state income tax currently generates about $6 billion annually, or one-third of total tax revenues, making its elimination a significant shift for state fiscal policy. Proponents argue such cuts stimulate the economy, though the scale of the potential impact on public services remains a central point of debate.

Arizona's state income tax generates approximately $6 billion annually, which constitutes one-third of the state's $18 billion in total annual tax collections. This compares to the $8.7 billion generated annually by state sales and use taxes.

The players

Andy Biggs

A candidate for Governor of Arizona who has proposed the incremental elimination of state income taxes.

Katie Hobbs

The Governor of Arizona who holds veto power over state tax legislation and scholarship programs.

The details

The proposed elimination of the state income tax would require a fundamental restructuring of Arizona's tax base. While the plan seeks to offset the loss of income tax through economic growth, the state currently relies on income tax for a major portion of its funding alongside sales and use taxes. Additionally, the platform outlines future adjustments to Empowerment Scholarship Account grants and potential limits on investor-owned short-term rentals to further shift the state's economic priorities.

April 2026: Governor Katie Hobbs vetoed Education Freedom Tax Credit legislation.
June 2026: The Department of Treasury issued a preview of federal scholarship guidance.
September 22, 2026: Andy Biggs announced his gubernatorial policy priorities.

Money Landscape

The proposal to eliminate state income tax follows a period of intense debate regarding the implementation of the federal Education Freedom Tax Credit program in Arizona. This initiative represents a potential major shift in state fiscal policy compared to the current revenue structure.

A potential elimination of the state income tax could significantly alter the tax burden for Arizona households over the coming years. Residents should monitor how these policy changes might affect state-funded services and local tax-credit programs like the $1,700 annual scholarship contribution limit.

The takeaway

The proposed income tax elimination highlights a significant shift in how Arizona could fund its $18 billion budget. Voters should track future updates on the timeline for this plan and review how changes to existing tax credits and scholarship programs might affect their household budget.