Overview: HB 2657 makes numerous changes to Arizona law regarding transaction privilege tax (TPT), including eliminating self-collecting cities, local audits and construction sales taxes at the state and local level.
League Position:OPPOSE - The League opposes HB 2657 in its current form. Moving to the Department of Revenue (DOR) for administration and auditing would greatly hamper the fiscal management abilities of self-collecting cities. Moving construction activity to a materials-only retail transaction will have significant negative impacts on municipal budgets.
Summary: This bill reflects some of the recommendations of the Governor's TPT Simplification Task Force. In addition to providing language for the collection of TPT for the sale of products being shipped out of the state, it includes three issues that cities and towns oppose in their current form;
Moving all cities and towns into the DOR collection program.
Requiring that all audits be conducted by the DOR.
Removing the construction contracting classification from both state statute and from the Model City Tax Code.
02/18/13: The bill was heard on Monday afternoon in the House Ways and Means Committee. The committee passed the bill on an 8-0 vote and now proceeds to the House Appropriations Committee.