This year I have sponsored two very important pieces of tax reform legislation. Both will save taxpayers money.
1. HB2347, signed into law by the governor, will save taxpayers money and increase transparency. HB2347 prohibits the Arizona board of supervisors, any governing body, or board of a county, city, town, school district or other municipal corporation from levying a property tax in excess of the net amount necessary to make the annual payment for principal and interest of bonds and refunding of bonds. Prior to this legislation, some jurisdictions were charging more taxes than needed to pay off bonds.
2. HB2111, spearheaded by Governor Brewer and sponsored by me, will dramatically improve our sales tax system, save time and money for Arizona businesses and employers, and lower consumers’ taxes. Arizona has one of the most complicated sales tax systems in the entire country. This legislation will put Arizona in line with what 46 other states already do.
Arizonans are currently paying sales tax on contracting services that people in 46 other states don’t pay. Under current Arizona law, a contractor who maintains, repairs, or replaces your air conditioning, plumbing, or pool has to pay sales tax on 65% of the total contract price. Even if the material only makes up 30% of the contract price, 65% is taxed. In almost every case, the contractor collects that tax from you. Each month the contractor has to go through the painstaking process of submitting multiple tax forms and payments to the state and each and every city that contractor does work in. Conversely, in 46 other states the contractor doesn’t fill out any tax forms and instead, just pays sales tax on the materials. HB2111 will align Arizona with these 46 other states. No longer will service contractors have to fill out tax forms and no longer will you be charged tax on 65% of the contract price.
In addition, HB2111 allows Arizona businesses and employers to submit their tax online to one location and limits businesses’ exposure to one single audit in a 4-year period instead of current law where the state and multiple cities can audit a business during the same time period.
HB2111 has passed through all the legislative committees and I am confident it will pass out of the legislature and be signed by the governor into law.
I want to hear from you. Contact me at 602-926-5413 or DLesko@azleg.gov
Together, we can make a difference.
Arizona State Representative
Legislative District 21