By Terri Jo Neff |
It sounds simple enough – repeal any sales tax on the purchase of food for home consumption currently being imposed by two-thirds of Arizona’s municipalities and thereby provide relief for residents against the ongoing effects of inflation, high fuel prices, and increases in utility costs.
That is the purpose behind House Bill 2061 introduced earlier this month by House Majority Leader Leo Biasiucci along with 35 co-sponsors. Sales taxes in Arizona are formally known as a transaction privilege tax (TPT).
Arizona does not have a state TPT for the sale of food for home consumption. But supporters of Biasiucci’s bill note that without a change, those who shop in a city or town with a municipal TPT on food will continue to be hit with a double whammy – more TPT being paid along with increasing grocery prices.
There is, of course, a quiet benefactor to those inflation-driven higher grocery prices – the 65 of Arizona’s 91 incorporated cities and towns which tax food for home consumption. The higher the prices, the greater their revenues.
Several municipalities have gone on record against HB2061, including the cities of Apache Junction, Avondale, Buckeye, Chandler, Coolidge, Glendale, Globe, Goodyear, Litchfield Park, Page, Prescott, Scottsdale, and Tempe, as well as the towns of Florence, Fountain Hills, and Gilbert.
Two other cities – Phoenix and Tucson – which do not even have a city sales tax on food for home consumption still oppose HB2061, as do lobbyists such as the League of Arizona Cities & Towns, the Professional Firefighters of Arizona, and Arizona AFL-CIO.
HB2061 cleared its first hurdle last week with a 6 to 4 vote in the House Ways & Means Committee. All four no votes came from Democrats on the committee. One lawmaker who advocated for the legislation during the committee vote was Rep. Travis Grantham (R-Scottdale).
“It’s unthinkable to me that people can stand up and justify taxing something people need to survive on a day to day basis,” Grantham said.
HB2061 is slated to be considered by the House Rules Committee on Monday. It will then be debated by the House, where many lawmakers expect to hear complaints that cities and towns will have to cut services if the bill passes.
It is an argument Biasiucci (R-Lake Havasu City) refuted last week, pointing out that the roughly one-third of Arizona’s cities and towns without a sales tax on food for home consumption are still able to offer municipal services.
If passed into law, the elimination of the food sales tax would take effect later this year. However, there is nothing in state law preventing any municipality that currently has such a tax from repealing it on their own.
The Joint Legislative Budget Committee estimates HB2061 could save Arizonans nearly $160 million in Fiscal Year 2022 and potentially growing to a savings of more than $195 million in FY 2026.