What need can possibly justify Arizona’s ranking as the state with the second highest sales tax burden in the nation?
According to the Tax Foundation organization’s July report on State and Local Sales Taxes at Midyear 2012, Arizona’s combined state and local sales tax (2.52% avg.) tips the scales at 9.12%, second only to Tennessee’s 9.43%.
Our very own Tuba City has the highest total sales tax rate in the nation with an incredible 13.725% (that’s a three-way combo of state, Coconino County (1.125%), and Navaho Nation To’Nanees’Dizi local sales tax (6%)) – Ouch!
Shifting the Tax Burden
The Tax Foundation, a 501(c)(3) nonprofit, also calculates each state’s “tax burden.”
The Foundation’s formula for calculating a state’s tax burden takes into account the:  “total amount paid by residents in taxes, then divide those taxes by the state’s total income to compute a tax burden.”
Our state and local income tax burden in 2009 placed Arizona 38th with 8.7%, well below the national average of 9.8%. Maybe you weren’t here in 1977, but at that time Arizona’s state and local tax burden was 10.3% (18th in the nation).
Arizona Proposition 204
Our state sales tax rate is 6.6% which is high. If it passes this November 6, Prop. 204 would make that tax rate permanent. If Prop. 204 doesn’t pass, then the rate will return to the pre-2010 level of 5.6%. You may recall that the state’s sales tax rate was increased for the purpose of funding education, but included a sunset provision – the sun sets on May 31, 2013.
Glendale Proposition 457
The Glendale City Council temporarily increased the city sales tax from 2.2% to 2.9% last summer as part of a five-year plan to raise $25 million and balance the city’s budget. Passing Prop. 457 would reverse that .7% increase, forcing the council to find a way to cut the budget by $25 million. But as we can see with AZ Prop. 204, “temporary” sales tax increases have a way of becoming very permanent.
Should Arizonans continue to pay the highest sales tax rates in the nation? Before you cast your vote, read more about AZ Prop. 204 and Glendale Prop. 457.
Sales Tax Relief Attorney Resources:
Arizona Has Highest Sales Tax Burden in U.S.