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New proposal expected in sales tax simplification debate

The debate over simplifying the state’s sales tax system could shift from the State House to the Senate this week. A bill to make changes to the sales tax is stalled in the house, but there are indications a new version could emerge in a senate committee this week. From Phoenix, KJZZ’s Mark Brodie reports.

MARK BRODIE: There are a few sticking points between the bill’s sponsor, and the League of Arizona Cities and Towns. One of the biggest is a provision that would change the way construction is taxed. A new proposal would eliminate the current state tax on contractors, but would allow cities and towns to levy their tax, but only on home and commercial builders. Trades-people, like plumbers and landscapers would only pay sales tax on their materials. Ken Strobek, the League’s Executive Director, calls the idea “interesting,” and says his group is reviewing it.

KEN STROBEK: The impact of what’s called the trades is something that is still rather significant to a lot of cities and towns, particularly smaller communities, rural communities and places that don’t have a lot of new construction going on, but that do a lot of remodeling or repairs and improvements and those kinds of things.

BRODIE: A Senate committee is expected to hear a new version of this bill on Wednesday. Simplifying the state sales tax has been one of Governor Brewer’s top priorities this year.