Arizona Rejects Sales Tax Revenue Neutrality
- Sales Tax News
- Mar 2, 2012 | Susan McLain
Arizona is a Transaction Privilege Tax (TPT) state. According to the state, “…this means…that various business activities are subject to state, county and/or city transaction privilege tax (TPT).”
A TPT is “…commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Although the transaction privilege tax is usually passed on to the consumer, it is actually a tax on the vendor.”
Arizona Senate Bill 1155 (SB1155) proposed to create a revenue neutral impact of any increase in the transaction privilege tax by reducing the “…state income tax to prevent a net increase in aggregate state tax revenues.” The bill intended to ensure that the TPT would not be increased “…to exceed the rates that were effective on May 31, 2010,” or that the impact would be offset by a reduction in income tax.
SB1155 Failed by a 15-15 vote on February 28, 2012.