Phoenix Tax Law Blog

Senate Committee Supports Arizona Sales Tax Reform

Arizona Governor Jan Brewer’s proposed plan of tweaking the state sales-tax system has received bipartisan support from a legislative panel, despite many Arizona residents raising strong objection.

In a vote measuring 6-1, the Senate Finance Committee voted almost unanimously to advance House Bill 211, a bill that outlines a new tax-collection system in an effort to remedy an old system viewed as highly convoluted. While the bill will not alter the general sales-tax rate, it will affect rates on construction sales tax.

Some cities worry the reformatting will end up costing them millions of dollars. With the current sales tax format, cities collect as much as 65% of the value of a project. The newly proposed tax will see that tax is collected where materials are purchased. Some cities maintain with a lack of construction-supply outlets in their immediate area, they’ll potentially lose out on huge sums of money.

The Senate Committee was clearly not in favor of delaying the reformat, passing the vote without heeding many of the objections from city representatives. While cities may not entirely agree with the numbers, the state legislation is confident the new measures will not spur a complete overhaul.

Posted in State Taxes |