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Changes likely coming to Arizona's sales tax

Governor Jan Brewer will deliver her State of the State address this afternoon, to help kick off the 2013 legislative session. And, one issue lawmakers are likely to debate this year is simplifying part of the tax code. From Phoenix, KJZZ’s Mark Brodie reports.

MARK BRODIE: Last spring, the governor set up a task force to look into ways of simplifying the state’s transaction privilege tax, or TPT - essentially Arizona’s sales tax. In December, that task force released its recommendations. And, Brewer says reforms to the tax are one of her top priorities for this legislative session.

JAN BREWER: It is no big secret that Arizona’s TPT system is complicated and overly burdensome for the business community, especially small business owners.

BRODIE: The governor says that’s because small companies often can’t afford dedicated staff to remit sales taxes. House Minority Leader Chad Campbell agrees the current system is complicated, but he has another goal, as well.

CHAD CAMPBELL: We need to fix it and make it simpler for businesses. And, I think, more importantly, too, make it a more stable source of revenue as we move forward. Not more revenue, not less revenue, just more stability.

BRODIE: There’s been some criticism of the recommendations for simplifying the sales tax. The League of Arizona Cities and Towns, for one, is concerned about a few of the proposals. House Speaker Andy Tobin says all sides need to work together on this issue.

ANDY TOBIN: I support doing something that’s gonna make it easier. But, we just need to be careful and cautious that all of these pieces don’t do more harm than good.

BRODIE: In addition to the proposals put forward by the governor’s task force, there will also be one certain change to the state’s sales tax this year. Proposition 100, the temporary one cent sales tax increase which voters approved in 2010, will expire at the end of May. That’s expected to cost the state about a billion dollars in revenue.