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Arizona Says No to One-Cent Sales Tax


The people of Arizona have soundly rejected a measure that would have made permanent an existing, temporary one-cent sales tax. As of this writing, 65% of Arizona voters have said no to Proposition 204, which made the ballot through an initiative campaign.

Proposition 204, also known as the Quality Education and Jobs Initiative, has seen its share of trouble in its brief lifetime. Earlier this year, Secretary of State Ken Bennett disqualified it from the November ballot because "… the initiative circulated to voters didn't match the version pre-filed with the office." The Superior Court of Arizona disagreed, and overturned Bennet's decision.

Proposition 204 was created to permanently extend the one-cent sales tax increase created by Proposition 100 in 2010; Proposition 100 is set to expire May 31, 2013. Monies generated by Proposition 100 go toward education, health and human services, and public safety. The bulk of funds generated by Proposition 204 would have gone toward education as well, with the remainder going toward transportation and two programs designed to help underprivileged children: KidsCare and The Family Stability Fund.

Earlier this year, after announcing that Arizona had a balanced budget and a positive cash balance, Governor Jan Brewer (R) acknowledged that Proposition 100, was "an integral part of our recovery plan… ." That said, she vowed, "This tax will end on my watch." The current Arizona state sales tax rate is 6.6%. On May 31, 2013, it will revert back to 5.6%. In Arizona, sales tax is know as the Transaction Privilege Tax.

It remains to be seen how Arizona will fund education after the revenue generated by the 1-cent sales tax stops flowing in 2013. As Governor Brewer said after vowing to end the tax, "We must find a way to fund the results we want and reward those educators who guide us into our next century."

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.