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Tue, Nov. 19

Prop. 100 1-cent sales tax expires

The expiration of the three-year 1 percent state sales tax might boost sales for local retailers by keeping more money in the pockets of consumers.

That's what many retailers are hoping with the end of Proposition 100.

The February 2010 measure temporarily raised Arizona sales tax by one cent per every dollar. Arizona Gov. Jan Brewer supported the bill, which voters approved in a special election. Proceeds from the tax increase went to education, health and human services programs in the state. An automatic repeal was built into the measure at the time, with a May 31, 2013, expiration date.

Sales tax rates will drop to 8.35 percent in Prescott and to 8.68 percent in Prescott Valley following the proposition's expiration. The state's sales tax dropped from 6.6 percent on every dollar to 5.6.

Generating more than $900 million each year, the tax helped Arizona avoid deeper budget cuts during the recent recession.

Prescott Valley Chamber of Commerce President and CEO Marnie Uhl said chamber members were recently notified the tax would be going away in the chamber's June newsletter. There are 608 PV chamber members.

Uhl said she believes businesses will see a boost in sales following the end of Prop. 100.

"I think anytime you are paying less for things, it provides more of a spending dollar for people. The consumer benefits because they will be paying less," Uhl said.

Marge Belson, a retired child welfare administrator from Illinois who now lives in Prescott Valley's Quailwood subdivision, said she would likely buy more, particularly with larger purchases like electronics and furniture.

"I think the sales tax in this state is already too high, but I buy carefully," she said. "I'm being more open to larger purchases (now)."

Greg Fister, Prescott Valley economic de-velopment manager, said he also believes big-ticket purchases will increase.

"On large purchases like automobiles and furniture, I think it could make a difference," Fister said. "If you buy a $30,000 car, next week that car is $300 cheaper than it was at the end of May."

Anthony Fusco, who manages two Foot Fetish women's apparel stores in Prescott and PV, said shoppers might not realize they will now pay less in taxes.

"I think the general public isn't aware of it yet. Over time, that is the idea - to get people more comfortable about spending a little bit more. Locally, we will see how much of a difference it will make."

On Friday, The Arizona Board of Regents expressed their gratitude for the state's support of higher education by voting in the temporary tax three years ago.

"We remain a committed partner in promoting a vibrant economy for the state and making Arizona a tremendous place to receive a high-quality, low-cost education," said Sarah Harper, director for the Arizona Board of Regents office of public affairs.

Daily Courier reporter Ken Hedler contributed to this article.

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