Bill > HB2766

This bill modifies Arizona's municipal transaction privilege tax (a type of local sales tax) regulations regarding food items. Specifically, the bill narrows the tax exemption for food items, maintaining taxes on candy, confectionaries, soft drinks, and soda while creating a new broad exemption for most other food items intended for home consumption. Cities, towns, and other local taxing jurisdictions will now be prohibited from levying taxes on the sale of most food items, with exceptions for the aforementioned sugary and carbonated products. The bill preserves existing exemptions for food item manufacturing, wholesale distribution, packaging, food stamp purchases, and low-cost food sales to elderly, homeless, or disabled individuals. These changes will take effect on December 31, 2025, which gives local jurisdictions time to adjust their tax policies. The primary impact is to reduce the tax burden on most grocery items while maintaining taxes on items typically considered less essential or less healthy.

Government Affairs

https://apps.azleg.gov/BillStatus/BillOverview/83229