Bill > SB1745

This bill establishes a new section in Arizona law to limit the rates of transaction privilege taxes and excise taxes imposed by cities and towns with a population of 550,000 or more. Specifically, it sets a maximum rate of two and one-half percent for any single transaction privilege tax classification, meaning different types of taxable activities or sales. This limit applies separately to each classification, regardless of how many different ordinances or components make up the tax. Cities and towns cannot enact new taxes, raise existing rates, broaden the tax base, or impose surcharges if these actions would push any classification's rate above the two and one-half percent limit, unless the increase is approved by voters. Any proposed tax increase that would exceed this limit must be put to a vote of the qualified electors, and if approved during a consolidated election in an even-numbered year, it will not be subject to the rate limit. Existing voter-approved taxes are not affected, and cities or towns that violate these provisions will face enforcement actions, including the withholding of state-shared revenues by the State Treasurer. The bill defines "excise tax" as a tax measured by the privilege of engaging in a transaction or activity, and "transaction privilege tax classification" as a classification established under existing state law for sales taxes. This section does not apply to property taxes.

Government Affairs

https://apps.azleg.gov/BillStatus/BillOverview/85409