Arizona seeks to revise its sales tax system

In an effort to ease the burden on business owners, Arizona Gov. Jan Brewer has proposed new legislation that would streamline the sales tax collection process.

“In its simplest form, the legislation would limit the ability of individual cities to decide on their own what items are taxable,” Ahwatukee Foothill News reports.

The bill was met with strong opposition from lawmakers as well as cities and towns that argue the new system will decimate their revenue streams.

Arizona’s sales tax regime is already one of the most complex in the nation and the state has the second highest sales tax in the country.

“The bill would unify the state’s sale tax collection system, creating one return, one payment and one audit. That would replace multiple versions of each that businesses operating in multiple jurisdictions must deal with,” the Casa Grande Dispatch reports.

One of Brewer’s proposals is to shift new construction taxation from where the building is being constructed to where the building materials are sold.

“Let’s call a spade a spade here. At the end of the day this is going to boil down to numbers,” Maricopa Mayor Christian Price told Arizona Ways and Means Committee members Monday. “There are 91 cities and towns in this state that are very much opposed to this construction tax change.”

Price’s city stands to lose millions in revenue due to the shift in construction taxation, should the governor’s bill pass.

“If you don’t want to see some of these become ghost towns, like the city of Maricopa, then you need to listen to what we say,” Price said.

The bill passed the first round of hearings Monday. Democrats reluctantly voted for it, despite misgivings. Amendments are expected to address the towns’ concerns over revenue.

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