Arizona Gov. Jan Brewer (R) has vetoed legislation that would've allowed state businesses to discriminate against same-sex couples on religious grounds.
She said the Arizona "religious freedom" bill, which became a national talking point, had "the potential to create more problems than it purports to solve."
"Senate Bill 1062 does not address a specific or present concern related to religious liberty in Arizona," she said of the controversial bill passed this month.
"I have not heard one example of business owners' religious liberty [being] violated."
Brewer said she understands proponents' position, but believes passing such a bill would devastatingly divide Arizona in ways no one would ever want.
The Arizona state legislature passed the bill, known as SB 1062, last week.
Almost as soon as it did, it came under intense criticism from activists, lawmakers and business interests both in Arizona and across the nation.
The state's two U.S. senators, Jeff Flake (R) and John McCain (R), called on Brewer to veto it, as did major corporations like Marriott, Apple and American Airlines.
Businesses in the Phoenix area were also especially worried about the fallout, with the Super Bowl set to be held in Glendale, Ariz. in early 2015.
On Monday, the Arizona Super Bowl Host Committee urged Brewer to axe the bill or deal "a significant blow to the state's economic growth potential."
The legislation passed by a margin narrow enough that the 69-year-old governor's approval was needed to sign it into law. She did not provide that.
Similar bills effectively allowing such discrimination have also been emerging in states such as Tennessee, Kansas, South Dakota and Maine.