By Jeremy Duda | Arizona Capitol Times
A lack of agreement among cities on how to handle the potential loss of revenues from Gov. Jan Brewer’s sales tax simplification plan may be the final green light for the contentious plan.
Rep. Karen Fann, who has taken a lead negotiating role on Brewer’s transaction privilege tax (TPT) plan, said she is ready to move ahead with the proposal without finding an immediate solution to the last major stumbling block — which cities will get reimbursed for tax revenue they’ll lose under the proposal, and who will pay for it. Instead, Fann said she proposed that the Legislature approve the governor’s plan and re-examine the results at the beginning of 2016, one year after it goes into effect.
The most recent version of Brewer’s plan includes a five-year “hold-harmless” provision for cities of 5,000 or fewer residents that expect to lose tax revenue due to a change in way that service contractors such as electricians and plumbers pay TPT. The smaller towns would have received extra money from the pool of shared revenue distributed between the state and cities to offset the losses.
