Small Business Owner Files Suit Against Major Tax Hike Initiative

An East Valley small business owner has filed suit against the initiative that would give Arizona one of the highest small business tax rates in the United States after the proponents filed enough signatures to qualify for November’s ballot.

The suit challenges the proponent’s deceptive and misleading claims on the impact the initiative would have on Arizona taxpayers and small businesses. Specifically, the backers of the measure omitted the fact that the initiative would eliminate the annual indexing of Arizona’s income tax brackets for inflation, a radical change that will cost Arizona taxpayers millions.

The measure also hid the size of the tax increase from voters. Supporters of the income tax increase claimed that the initiative would increase tax rates by only 4.46 percent, when in fact small businesses would be hit with a tax hike ranging from 76.2% to 98.2%.

“Like most other small businesses, we pay our business taxes as individuals. If our tax liabilities were to double as a result of this initiative, I don’t know how we will be able to survive.” Said Jennifer Henricks, a small family business in the East Valley and parent of three children in Arizona’s public school system. “It’s unfortunate that whoever wrote this initiative decided to mislead the public about the size of the tax increase.”

Henricks is the Treasurer for the “AZ SMALL BUSINESSES AGAINST I-17-2018,” a grassroots committee formed to educate citizens on the harmful impacts the initiative would have on small businesses throughout Arizona.

Also hidden from voters is how the proposed tax income tax increase will hammer small businesses while corporations are left untouched by the tax hike. “It is completely unfair that we will see our tax rates nearly double while Fortune 500 companies will get a special rate under 5%. If the goal was to punish small business owners while rewarding big corporations, this tax increase is the way to do it.” Henricks added.