State Capitol News
9:41 am
Tue February 19, 2013

Major Changes To State Sales Tax Laws

A House panel voted unanimously this week to approve changes in state sales tax laws. But, Arizona Public Radio's Howard Fischer reports some major changes remain to be made.

Much of the measure simplifies the law and ensures that businesses do not face multiple audits. But, it also scraps the current system where sales tax on construction are assessed and collected where the project is built. Instead, contractors would pay taxes on supplies when - and where - they buy them.

Christian Price is mayor of the city of Maricopa. He said the measure would mean the loss of millions of dollars in his rapidly growing community. "You take away the construction sales tax, we talk about Lowes or Home Depot, other things, those simply don't exist in the city of Maricopa," Price said. "Now, I understand as a legislature you have to take a broad-based view and see this on a wide perspective. But if you don't really want to see some of these towns become ghost towns, like the city of Maricopa, then you really need to consider what we're saying here."

Mayors of other communities echoed similar sentiments. But, Representative Debbie Lesko said the change will mean better compliance with the law, meaning the state would collect more money which can be shared with cities. Lesko said, "31% or $148 million a year is, again, going to be added into that pot because people can't cheat any more."

Despite the unanimous vote, committee members agreed changes are necessary to address the concern of the cities if this is to become law.