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Arizona Sales Tax Increase (2009)

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An Arizona Sales Tax Increase ballot measure will not be on the November 3, 2009 ballot in Arizona. The measure would ask voters to approve an additional 1% sales tax for three years.[1]

For the measure to go on the November ballot, the Arizona State Legislature will have to vote to do so in a special session before the end of July 2009. However, on August 12, 2009 the Arizona Senate defeated the bill.[2]

The current statewide sales tax in Arizona is 5.6%. This measure, if it goes on the ballot and is approved, would raise that to 6.6%.

State lawmakers are having trouble balancing their budget, which is why they are considering this tax hike. As of mid-July, the budget shortfall is $3.4 billion. Proponents of the sales tax hike believe it will bring $1 billion/year into the state's coffers.

2010 ballot

Gov. Brewer is hoping for the measure to be placed on a future ballot, hopefully by way of citizen initiative. According to the governor, there is some hope to have the sales tax reappear to lawmakers and temporarily hike up revenue, if enacted by voters.

According to Arizona state law, an initiative would eliminate the mandatory procedure to marshall the votes in the legislature to place the measure on the ballot. If the proposal goes down this path, the soonest an initiative could appear on the ballot was November 2010. According to Brewer, “We’ve got an $11 million budget and we’ve got $7 billion in revenues. Somewhere, somehow, we’ve got to resolve it.”[3]

Tax revenue fall-off

One reason Arizona has a budget shortfall is because its tax collections have fallen.

  • Sales-tax collections in May 2009 were 21% lower than in May 2008.
  • Individual income tax payments to the state in May 2009 were 32% lower than in May 2008.
  • Revenues from the liquor tax fell 11% year-over-year.


The Goldwater Institute, an self described independent government watchdog, stated their opposition to the tax hike, citing flawed procedures in balancing the state’s budget. According to the institution’s website:

"It’s clear that the legislature should stop drafting appropriations bills with negative numbers. They should plainly state how much money they want each agency to spend and avoid putting the state in even tougher circumstances come next year"[4]