By Eric Jay Toll | Phoenix Business Journal
If Congress can actually take action on a bill to reform Internet sales tax collections, Arizona will be prepared if a tax reform step by Rep. Javan Mesnard (R-Chandler) is enacted.
House Bill 2061 from the Speaker Pro Tempore will offset revenue gains from the sales tax boost by reducing the state income tax.
“The idea for this bill came from the 2-13 Income Tax Reform Task Force,” he said. “It’s a proposal to maintain a revenue-neutral impact on taxpayers.”
If enacted, HB 2061 requires the Arizona Department of Revenue to take a snapshot of the impact on the state’s treasury. First, the sales tax fairness legislation would need to go into effect following Congressional action on some form of the long-stalled bill. Once Arizona has a handle on the amount of state sales tax generated by Internet taxable sales transactions, the increase in the state’s transaction privilege tax would be offset by a reduction in state income tax.