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home : opinions : opinions July 22, 2014

2/19/2013 10:00:00 PM
Editorial: Sales tax change could hurt locals
The Daily Courier

It is a process that has needed lawmakers' attention for years. A proposal to reform the state's complex sales tax collection system ironically would not directly affect the taxpayer; however, many businesses and municipalities have lined up on opposite sides of the argument.

The bill would overhaul sales tax collection, basically creating one return, one payment and one audit for businesses, replacing multiple versions of each that businesses operating in multiple jurisdictions must deal with, according to the Associated Press.

Good idea? The key words there are "multiple jurisdictions."

When it comes to business, the current system is overwhelmingly expensive and outdated. At the same time, some industries - such as contractors - after the changes would pay sales tax at the point of sale. This would take much of those dollars out of the rural areas and, thus, out of local governments' coffers.

"It also has a bad side when it comes to the prime contractor tax," said Sandy Griffis, executive director of the Yavapai County Contractors Association. "Local contractors often have to bring products in ... that's the point of sales tax. But they also would face, for example, the tax rates in the (Phoenix) Valley, which can be higher, putting them in harm's way for bids."

On one side is the business community, call it the metro world, where businesses of all types regularly operate in multiple jurisdictions. On the other side are businesses in the rural areas that do most of their work outside of the metro areas, but often have to bring in supplies from the big city. Joining them are the cities and towns that stand to lose revenue because of the point-of-sale losses.

"If a contractor needs a $100,000 lumber package and they have to go to Phoenix for it, the rural areas lose - and the contractor could lose the bid for the project because of the added costs," Griffis added.

A new system that could harm cities, draining millions in revenue each year because of the construction tax changes, and making business more difficult for some industries, is definitely one that needs major work before being approved.

The bill unanimously advanced Monday out of its first Arizona House committee hearing.

Even though major revisions are expected to address towns' concerns, let's also not forget the recovering housing market.

It too does not need an unintended obstacle placed in front of it.

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Reader Comments

Posted: Wednesday, February 20, 2013
Article comment by: How nice.

Are you kidding me. You say a "tax collection system ironically would not directly affect the taxpayer". What planet are you on?

It will always affect the taxpayer. If businesses want to stay in business they will always pass the cost onto the average taxpayer. If they don't pass it on they may as well shut their doors.

For all you uneducated people out there who have no clue as to how to run a business. You need to make a profit to stay in business. Otherwise what's the point. We might as well all quit and leave Obama and his kind of government with no spending money. Then we need to put Obama in Jail and elect someone qualified to run this country.

Posted: Wednesday, February 20, 2013
Article comment by: There You Go Again

Courier: Your analysis is in the weeds again. The whole point is that government tell us they 'need' the money in the first place. Many of us are on lowered incomes and working multiple jobs just to pay those taxes. You have run out of other people's money. Make do with less.

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