Tax Reform

Kevin McCarthy, president of the Arizona Tax Research Association, said reforming the state’s tax code isn’t going to be a win-win for everyone, but it remains a necessity.

PHOENIX – Governor Jan Brewer today appointed members to the Transaction Privilege Tax (TPT) Simplification Task Force. The panel, consisting of tax experts, business owners, municipal representatives and others, has been asked to issue recommendations on how the Arizona sales tax code can be made simpler and easier for taxpayers to comply with and the State to administer. Arizona’s sales tax system is generally considered among the nation’s most complex.

For the better part of the past decade, the Arizona state budget has been on a historic roller coaster. Significant budget increases between 2003 and 2008 were followed by a recession that stripped 35 percent of the revenue from the state general fund. The good news is that the fiscal 2012 state budget is the first structurally balanced budget in four years. The bad news is that it contains roughly $950 million in temporary sales-tax revenue that will be gone after fiscal 2013.

Arizona leaders are doing a lot of looking for unicorns these days. The one they are in particularly hot pursuit of is a state tax structure that isn't so subject to cyclical fluctuations.