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Arizona Voters Could Prohibit State and Local Gov’ts From Enacting New Taxes

by Countable | 10.29.18

What the Initiative Does

Proposition 126 would amend Arizona’s constitution to prohibit state and local governments from enacting new taxes or increasing tax rates in effect at the end of 2017 on services performed in Arizona. Services include personal services (i.e., salon services, pet grooming, amusement, fitness), financial services (i.e., real estate transactions, banking, investment management), and doctor’s visits.

In Favor

This proposition protects ordinary Arizonans by preventing the government from implementing a new sales tax on services that they use every day. Sales taxes hit low- and middle-income families hardest, so this measure protects those who are least able to afford new taxes, including senior citizens, the disabled, and others on fixed incomes.

Opposed

Taxes fund necessary public services, such as roads, fire and police, and schools. Additionally, since a two-thirds vote in both legislative chambers is needed to impose a new tax or raise an existing tax, it’d already be very difficult to place a new tax on services, so there are enough protections to avoid taxes on services without amending the state constitution.

In-Depth

Citizens for Fair Tax Policy, a political action committee organized by the Arizona Association of Realtors, is sponsoring this legislation and leading the campaign in its support. The No on Proposition 126 Committee, chaired by Sen. Steve Farley (D-9) is leading the campaign opposing this proposition.

Gov. Greg Ducey (R) also opposes this proposition, arguing that “putting a permanent and unchangeable tax policy at the ballot box is a bad idea.” Sedona-area realtor Holly Mabery, who heads Citizens for Fair Tax Policy, counters this by saying that if future generations want the power to tax services, they could amend the constitution again.

In 2016, Arizona lawmakers introduced a bill to expand sales taxes on personal and financial services. However, that bill never gained traction and died.


Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / mphillips007)

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