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Arizona Gov. Hobbs vetoes bill to exempt some car sales from state taxes

Out-of-state buyers who want to buy cars and RVs in Arizona won't be able to escape sales taxes if they come here to take delivery.

Gov. Katie Hobbs rejected a House Bill 2252 on Monday, which sought on behalf of Lucid Motors, that would have allowed visitors to buy a car here and then drive it off without paying the taxes.

But Hobbs is still open to the idea. 

→  Here's a list of all the Arizona bills Gov. Katie Hobbs has vetoed so far

Republican Rep. Teresa Martinez argued the intent was to promote tourism, as they hoped to lure buyers to Arizona to pick up their new purchase, spend some money and then drive away. But the Legislature's budget staffers warned that the tax exemption could cost the state more than $1 million.

Martinez argued Arizona wasn’t even guaranteed that money.

“I don't know that we would get that impact anyways. Because if they buy it and have it shipped, they're still not paying the taxes," Martinez said. 

Hobbs says the bill — as it stands — could have unintended consequences, but she is open to exploring the idea with tighter regulations.

Jill Ryan joined KJZZ in 2020 as a morning reporter, and she is currently a field correspondent and Morning Edition producer.