Arizona Expediting Move to Flat Tax After ‘Record Surplus’

Arizona will implement a lower flat income tax rate in 2023, ahead of schedule, because it has higher than expected revenues, Gov. Doug Ducey (R) said Thursday.

Ducey ordered Jan. 1 enactment of a 2.5% flat income tax rate that was designed to be phased in over three years based on specific revenue targets, according to a letter to the Arizona Department of Revenue citing a “record surplus.” A law Ducey signed in 2021, touted as the biggest tax cut in state history, reduced income tax rates that now range from 2.59% to 4.5%.

• The 2.5% rate in 2023 instead ...