By Jeremy Duda | Arizona Capitol Times
The next frontier in Arizona’s efforts to woo manufacturers may be an exemption on the sales taxes they pay on electricity usage.
Gov. Jan Brewer is working on a proposal to eliminate the sales taxes that manufacturers pay on their electricity, according to gubernatorial aide Michael Hunter. Arizona is one of only 13 states that charges its full sales tax rate on energy usage, he said.
The 37 other states, including many that Arizona competes with in trying to lure new businesses, either don’t tax energy usage at all or have exemptions or lower rates for manufacturers, Hunter said.
“There are certain tax problems in our tax code that just jump off of a spreadsheet,” Hunter said. “It’s just one of those not very interesting, not very exciting areas of the tax code where we’re not competitive. And our system is providing a level of sticker shock that we could probably manage better by providing an exemption.”
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