Arizona Proposition 126, Prohibit New or Increased Taxes on Services Initiative (2018)

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Arizona Proposition 126
Flag of Arizona.png
Election date
November 6, 2018
Topic
Taxes
Status
Approveda Approved
Type
Constitutional amendment
Origin
Citizens


Arizona Proposition 126, the Prohibit New or Increased Taxes on Services Initiative, was on the ballot in Arizona as an initiated constitutional amendment on November 6, 2018.[1] The measure was approved.

A "yes" vote supported this constitutional amendment to prohibit the state and local governments from enacting new taxes or increasing tax rates on services performed in the state.
A "no" vote opposed this constitutional amendment, thus retaining the power of the state and local governments to enact taxes on services in the future.

Election results

Arizona Proposition 126

Result Votes Percentage

Approved Yes

1,436,106 64.09%
No 804,794 35.91%
Results are officially certified.
Source

Overview

What did Proposition 126 change about tax policy in Arizona?

Proposition 126 prohibited the state and local governments from enacting new taxes or increasing tax rates in effect on December 31, 2017, on services performed in Arizona.[1] Services can include various types of economic activities that don't involve tangible goods, from personal-oriented activities, including salon services, pet grooming, amusement, and fitness activities, to financial-oriented activities, including real estate transactions, banking, and investment management, to healthcare-oriented activities, such as doctor visits.

Who was behind the campaigns surrounding Proposition 126?

Citizens for Fair Tax Policy, a political action committee, led the campaign in support of Proposition 126. The Arizona Association of Realtors organized the PAC. Citizens for Fair Tax Policy had raised $10.00 million. The Realtors Issues Mobilization Fund, an organization of the Arizona Association of Realtors, provided the largest contribution—$8.00 million. The National Association of Realtors provided the remaining $2.00 million. The No on Proposition 126 Committee registered to oppose Proposition 126 and reported $141,410 in contributions. Stand for Children, Inc. was the largest donor to No on Proposition 126, contributing $119,910.[2]

Text of measure

Ballot title

The ballot title was as follows:[3]

Amending Article IX of the Arizona Constitution by Amending Section 6 and Adding Section 25, and Amending Article XIII, Section 2, of the Arizona Constitution; Prohibiting the Taxation of Any Service that was Not Taxed as of December 31, 2017.

The constitutional amendment would prohibit the state and each county, city, town, district, or other political subdivision in Arizona from imposing a new or increased tax on services that was not already in effect on December 31, 2017.[4]

Ballot summary

The ballot summary was as follows:[3]

A “YES” vote will prohibit the State and local governments from enacting any new or increased tax on services that was not already in effect on December 31, 2017.

A “NO” vote will preserve the State and local governments’ existing authority to impose a tax on services in the future.[4]

Constitutional changes

See also: Arizona Constitution

The ballot initiative amended Article 9 and Article 13 of the Arizona Constitution. The following underlined text was added:[1]

Note: Hover over the text and scroll to see the full text.

Section 6 of Article 9. Local Assessments and Taxes.

Except as provided by Section 25 of this Article, incorporated cities, towns, and villages may be vested by law with power to make local improvements by special assessments, or by special taxation of property benefited. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes.

Section 25 of Article 9. Prohibition of New or Increased Taxes on Services

The state, any county, city, town, municipal corporation, or other political subdivision of the state, or any district created by law with authority to impose any tax, fee, stamp requirement, or other assessment, shall not impose or increase any sales tax, transaction privilege tax, luxury tax, excise tax, use tax, or any other transaction-based tax, fee, stamp requirement or assessment on the privilege to engage in, or the gross receipts of sales or gross income derived from, any service performed in this state. This section does not repeal or nullify any tax, fee, stamp requirement, or other assessment in effect on December 31, 2017.

Section 2 of Article 13. Charter; Preparation and Proposal by Board of Freeholders; Ratification and Approval; Amendment

Any city containing, now or hereafter, a population of more than three thousand five hundred may frame a charter for its own government consistent with, and subject to, the Constitution and the laws of the state, in the following manner: A board of freeholders composed of fourteen qualified electors of said city may be elected at large by the qualified electors thereof, at a general or special election, whose duty it shall be, within ninety days after such election, to prepare and propose a charter for such city.

Such proposed charter shall be signed in duplicate by the members of such board, or a majority of them, and filed, one copy of said proposed charter with the chief executive officer of such city and the other with the county recorder of the county in which said city shall be situated. Such proposed charter shall then be published in one or more newspapers published, and of general circulation, within said city for at least twenty-one days if in a daily paper, or in three consecutive issues if in a weekly paper, and the first publication shall be made within twenty days after the completion of the proposed charter. Within thirty days, and not earlier than twenty days, after such publication, said proposed charter shall be submitted to the vote of the qualified electors of said city at a general or special election. If a majority of such qualified electors voting thereon shall ratify such proposed charter, it shall thereupon be submitted to the governor for his approval, and the governor shall approve it if it shall not be in conflict with this Constitution or with the laws of the state. Upon such approval said charter shall become the organic law of such city and supersede any charter then existing (and all amendments thereto), and all ordinances inconsistent with said new charter. A copy of such charter, certified by the chief executive officer, and authenticated by the seal, of such city, together with a statement similarly certified and authenticated setting forth the submission of such charter to the electors and its ratification by them, shall, after the approval of such charter by the governor, be made in duplicate and filed, one copy in the office of the secretary of state and the other in the archives of the city after being recorded in the office of said county recorder. Thereafter all courts shall take judicial notice of said charter.

The charter so ratified may be amended by amendments proposed and submitted by the legislative authority of the city to the qualified electors thereof (or by petition as hereinafter provided), at a general or special election, and ratified by a majority of the qualified electors voting thereon and approved by the governor as herein provided for the approval of the charter.

Notwithstanding any provision of this section to the contrary, no charter shall provide a city with any power to violate Article IX, Section 25, which preempts such power.[4]

Readability score

See also: Ballot measure readability scores, 2018
Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The attorney general wrote the ballot language for this measure.


The FKGL for the ballot title is grade level 20, and the FRE is 13. The word count for the ballot title is 36, and the estimated reading time is 9 seconds. The FKGL for the ballot summary is grade level 13, and the FRE is 45. The word count for the ballot summary is 48, and the estimated reading time is 12 seconds.

In 2018, for the 167 statewide measures on the ballot, the average ballot title or question was written at a level appropriate for those with between 19 and 20 years of U.S. formal education (graduate school-level of education), according to the FKGL formula. Read Ballotpedia's entire 2018 ballot language readability report here.

Support

Arizona Yes on 126 2018.png

Citizens for Fair Tax Policy led the campaign in support of the initiative.[5]

Supporters

  • Arizona Association of Realtors[6]
  • American Institute of Architects—Arizona[7]
  • Arizona Retailers Association[8]
  • Arizona Small Business Association[9]

Arguments

Holly Mabery, chairperson of Citizens for Fair Tax Policy, wrote the following argument for the state's official voter guide:[8]

Please vote YES on Proposition 126, the Protect Arizona Taxpayers Act to protect Arizona families from potential unwanted taxes on services. The Act will amend the Arizona Constitution to protect taxpayers from state and local governments imposing any new sales tax or use tax on services. The Protect Arizona Taxpayers Act is designed to prohibit the state from implementing a new sales tax on services that Arizonans use every day.

Here are a few examples of services that could be taxed:

  • Family services: childcare, health care, self-defense instruction and tutoring.
  • Personal services: haircuts, manicures, tattoos, dry cleaning, car repairs and funerals.
  • Professional services: banking, accounting, advertising, technical installations and real estate.
  • Health care services: physicians, surgeons, nurses, physical therapists, dentists, eye doctors and counselors.
  • Home services: construction, plumbing, lawn care, heating and air conditioning, installations and repairs, appraisals and inspections.

Sales taxes hit low-and middle-income families hardest. The Protect Arizona Taxpayers Act protects those who are least able to afford new taxes, including senior citizens, the disabled and others on fixed incomes.

A new sales tax on services was recently proposed in the Arizona Legislature. Just this year the state of Illinois has discussed taxing services. Other states, such as North Carolina, Washington, and Oklahoma have started imposing new sales taxes on services this year. The threat is real because politicians often share bad ideas, and a sales tax on services is a bad idea for all Arizonans.[4]

Opposition

Arizona No on Prop 126 logo 2018.png

The No on Proposition 126 Committee led the campaign in opposition to Proposition 126.[10] Sen. Steve Farley (D-9) was chairperson of the campaign, and Sen. Bob Worsley (R-25) was the campaign's treasurer.[11]

Opponents

Officials

Organizations

Arguments

  • Sen. Steve Farley (D-9) stated, "Do they not need good roads, good fire and police protection, good schools to sell their houses? They're cutting off any ability of people to fund that stuff in the future as the economy changes. Realtors used to support efforts to try to improve our communities instead of just try to take away any tools we have."[13]
  • The Gila County Republican Committee said, "Restricting unnecessary taxes is a primary principle of the Republican Party. But to place a new tax, or raise a tax, requires two thirds vote by both State Senate and House of Representatives, making it very difficult to place a new tax on services. The Committee believes there are adequate protections to avoid taxes on services and to place it the States Constitution is unnecessary and recommends a no vote."[14]
  • Andrew Clark, state director of Americans for Prosperity, Arizona Chapter, said, "When the government decides that certain businesses don’t need to pay taxes for any reason, they pick winner and losers based not on the merits of the product or service they provide, but on their political power and influence. That’s not a system we should support. This proposal would exempt certain kinds of businesses in the service industry from paying taxes. That means that other kinds of business will have to pay more taxes to compensate for this special treatment. This is a system that rewards lobbyists and the politically well-connected at the expense of you and me. What we should instead advocate for is a system where every business pays the same, lower tax rate."[8]


Campaign finance

See also: Campaign finance requirements for Arizona ballot measures

Citizens for Fair Tax Policy, a political action committee, was registered to support Proposition 126. The PAC had raised $10.00 million and expended $9.16 million. The Realtors Issues Mobilization Fund, an organization of the Arizona Association of Realtors, provided the largest contribution—$8.00 million.[2]

The No on Proposition 126 Committee was registered to oppose Proposition 126. The PAC had raised $141,410 and expended $137,052. The largest contribution was from Stand for Children, Inc., which donated $119,910.[2]

Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Support $10,000,000.00 $0.00 $10,000,000.00 $9,159,983.35 $9,159,983.35
Oppose $26,500.00 $114,909.70 $141,409.70 $22,142.79 $137,052.49
Total $10,026,500.00 $114,909.70 $10,141,409.70 $9,182,126.14 $9,297,035.84

Support

The following table includes contribution and expenditure totals for the committees in support of the measure.[2]

Committees in support of Proposition 126
Committee Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Citizens for Fair Tax Policy $10,000,000.00 $0.00 $10,000,000.00 $9,159,983.35 $9,159,983.35
Total $10,000,000.00 $0.00 $10,000,000.00 $9,159,983.35 $9,159,983.35

Donors

The following were the top donors to the committee.[2]

Donor Cash Contributions In-Kind Contributions Total Contributions
Realtors Issues Mobilization Fund $8,000,000.00 $0.00 $8,000,000.00
National Association of Realtors $2,000,000.00 $0.00 $2,000,000.00

Opposition

The following table includes contribution and expenditure totals for the committees in opposition to the initiative.[2]

Committees in opposition to Proposition 126
Committee Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
No on Proposition 126 Committee $26,500.00 $114,909.70 $141,409.70 $22,142.79 $137,052.49
Total $26,500.00 $114,909.70 $141,409.70 $22,142.79 $137,052.49

Donors

The following were the top donors to the committee.[2]

Donor Cash Contributions In-Kind Contributions Total Contributions
Stand for Children, Inc. $5,000.00 $114,909.70 $119,909.70
Americans for Prosperity $10,000.00 $0.00 $10,000.00
Children's Action Alliance $7,000.00 $0.00 $7,000.00
Valley Interfaith Project $3,000.00 $0.00 $3,000.00
Ken Strobeck $1,500.00 $0.00 $1,500.00

Reporting dates

In Arizona, ballot measure committees filed a total of six campaign finance reports in 2018. The filing dates for reports were as follows:[15]

Polls

See also: 2018 ballot measure polls
Arizona Proposition 126, Prohibit New or Increased Taxes on Services Initiative
Poll Support OpposeUndecidedMargin of errorSample size
Suffolk University
9/27/2018 - 9/30/2018
48.0%31.0%21.0%+/-4.4500
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Background

Measures limiting taxes in 2018

See also: Taxes on the ballot

In 2018, voters in six states considered ballot measures to cap, limit, or restrict types of taxes. In Oregon and Washington, voters decided ballot initiatives to prohibit governments from enacting taxes on groceries. Oregan voters rejected the grocery tax ban. In Washington, the measure was ahead by 5 percentage points with 64 percent of precincts reporting.

In Arizona, an initiative to prohibit new taxes or increased tax rates on services was approved. Voters in California defeated an initiated measure to require voter approval for the state legislature to impose, increase, or extend fuel taxes or vehicle fees in the future. It would have also repealed a gas tax increase passed in 2017.

Legislatures in Florida and North Carolina referred constitutional amendments capping taxes to the ballot and both were approved. Voters in Florida and Oregon also considered ballot measures to require supermajorities of the state legislature to increase taxes. In Florida, the measure was approved, and, in Oregon, it was defeated.

An additional initiative qualified for the ballot in California but was withdrawn after proponents agreed to a compromise bill with legislators to keep the initiative off the ballot. The initiative would have required a two-thirds vote of the electorate on all local taxes, including soda taxes. The compromise legislation prohibited local soda taxes until 2031.

Measure Origin Description Status
Arizona Proposition 126 Initiative Prohibits the state and local governments from enacting new taxes or increasing tax rates on services
Approveda
California Proposition 6 Initiative Requires voter approval for the state legislature to impose, increase, or extend fuel taxes or vehicle fees in the future
Defeatedd
Florida Amendment 2 Legislature Makes permanent the cap of 10 percent on annual nonhomestead parcel assessment increases set to expire
Approveda
Florida Amendment 5 Legislature Requires a two-thirds vote of each chamber of the state legislature to enact new taxes or fees or increase existing ones
Approveda
North Carolina Amendment Legislature Lowers the maximum allowable state income tax rate from 10 percent to 7 percent
Approveda
Oregon Measure 103 Initiative Prohibits state and local governments from enacting taxes on groceries
Defeatedd
Oregon Measure 104 Initiative Requires a three-fifths vote of each chamber of the state legislature to increase revenue, such as via increasing taxes and decreasing tax exemptions
Defeatedd
Washington Initiative 1634 Initiative Prohibits local governments from enacting taxes on groceries
Approveda

Path to the ballot

See also: Laws governing the initiative process in Arizona

The state process

In Arizona, the number of signatures required to qualify an initiated constitutional amendment for the ballot is equal to 15 percent of votes cast for governor in the most recent gubernatorial election. Petitions can be circulated for up to 24 months. Signature petitions must be submitted four months prior to the election at which the measure is to appear.

The requirements to get initiated constitutional amendments certified for the 2018 ballot:

If the secretary of state certifies that enough valid signatures were submitted, the initiative is put on the next general election ballot. The secretary of state verifies the signatures through a random sampling of 5 percent of submitted signatures working in collaboration with county recorders. If the random sampling indicates that valid signatures equal to between 95 percent and 105 percent of the required number were submitted, a full check of all signatures is required. If the random sampling shows fewer signatures, the petition fails. If the random sampling shows more, the initiative is certified for the ballot.

Details about the initiative

The ballot initiative was filed with the secretary of state's office on March 8, 2018.[1] On July 3, 2018, Secretary of State Michele Reagan (R) announced that Citizens for Fair Tax Policy, which sponsored the ballot initiative, reported filing 406,353 signatures.[16] At least 225,963 (55.61 percent) of the filed signatures needed to be valid for the initiative to make the ballot.

On August 1, 2018, Reagan announced that the ballot initiative qualified for the ballot as Proposition 126. Counties conducted random samples of signatures, finding that an estimated 276,761 signatures were valid.[17]

Cost of signature collection:
Sponsors of the measure hired AZ Petition Partners, LLC to collect signatures for the petition to qualify this measure for the ballot. A total of $1,256,249.98 was spent to collect the 225,963 valid signatures required to put this measure before voters, resulting in a total cost per required signature (CPRS) of $5.56.

How to cast a vote

See also: Voting in Arizona

Poll times

In Arizona, all polling places are open from 6:00 a.m. to 7:00 p.m. local time. An individual who is in line at the time polls close must be allowed to vote.[18][19]

Registration requirements

Check your voter registration status here.

To vote in Arizona, one must be a citizen of the United States and a resident of an Arizona county. A voter must be 18 years or older on or before Election Day. Arizona also requires voters to provide documentary proof of citizenship to vote for state and local elections[20]

To be eligible to vote in an election one must register at least 29 days prior to the election. Individuals can register online, in person at the county recorder's office, or by mail.[21]

Automatic registration

Arizona does not practice automatic voter registration.

Online registration

See also: Online voter registration

Arizona has implemented an online voter registration system. Residents can register to vote by visiting this website.

Same-day registration

Arizona does not allow same-day voter registration.

Residency requirements

Arizona law requires 29 days of residency in the state before a person may vote.

Verification of citizenship

See also: Laws permitting noncitizens to vote in the United States

Arizona requires voters to submit proof of citizenship with their voter registration application to vote in state and local elections. According to the Arizona Secretary of State's website: "A registrant who attests to being a citizen but fails to provide proof of citizenship and whose citizenship is not otherwise verified will be eligible to vote only in federal elections (known as being a 'federal only' voter)."[20] Accepted proof of citizenship include:[20]

  • An Arizona Driver's License/Identification Number
  • Indian Census Number, Bureau of Indian Affairs Card Number, Tribal Treaty Card Number, or Tribal Enrollment Number
  • A photocopy of U.S. naturalization documents
  • A photocopy of a birth certificate and supporting legal documentation (i.e., marriage certificate) if the name on the birth certificate is not the same as your current legal name.
  • A photocopy of a U.S. passport.
  • A photocopy of a Tribal Certificate of Indian Blood or Bureau of Indian Affairs Affidavit of Birth.

All 49 states with voter registration systems require applicants to declare that they are U.S. citizens in order to register to vote in state and federal elections, under penalty of perjury or other punishment.[22] Seven states — Alabama, Arizona, Georgia, Kansas, Louisiana, New Hampshire, and Wyoming — have laws requiring verification of citizenship at the time of voter registration, whether in effect or not. One state, Ohio, requires proof of citizenship only when registering to vote at a Bureau of Motor Vehicles facility. In three states — California, Maryland, and Vermont — at least one local jurisdiction allows noncitizens to vote in some local elections. Noncitizens registering to vote in those elections must complete a voter registration application provided by the local jurisdiction and are not eligible to register as state or federal voters.

Verifying your registration

The Arizona Voter Information Portal, run by the Arizona Secretary of State's office, allows residents to check their voter registration status online.

Voter ID requirements

Arizona requires voters to present photo identification or two forms of non-photo identification while voting.[23][24]

The following were accepted forms of identification as of July 2024: Click here for the Arizona Citizens Clean Elections Commission's page on accepted ID to ensure you have the most current information.

Voters can present one of the following forms of ID that contain the voter’s photograph, name, and address:

  • Arizona driver’s license
  • U.S. federal, state, or local government-issued ID, issued with printed name and address
  • Arizona ID card
  • Tribal enrollment card or other form of tribal ID

If a voter does not have one of the above forms of ID, the voter can present two of the following forms of ID that contain the voter’s name and address:

  • Utility bill in the voter's name
  • Bank or credit union statement that is dated within 90 days of the date of the election
  • Valid Arizona vehicle registration
  • Arizona vehicle insurance card
  • Indian census card
  • Property tax statement
  • Recorder's certificate or voter registration card
  • Tribal enrollment card or other tribal ID
  • Valid U.S. federal, state, or local government-issued ID with a printed name and address or
  • Any mailing in the voter's name that is labeled "official election material"  

Additionally, if a voter presents photo ID that does not list an address within the precinct in which he or she wants to cast a vote, that person may present the photo ID with one non-photo identification material from the second list above. The identification material should include the voter’s address.

See also

External links

Information

Support

Opposition

Footnotes

  1. 1.0 1.1 1.2 1.3 Arizona Secretary of State, "Initiative Petition," March 9, 2018
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Arizona Secretary of State, "Campaign Finance Committee Search," accessed April 2, 2018
  3. 3.0 3.1 Arizona Secretary of State, "Proposition 126 - Sample Ballot," accessed September 11, 2018
  4. 4.0 4.1 4.2 4.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content
  5. Protect Arizona Taxpayers, "Homepage," accessed March 13, 2018
  6. KJZZ, "Arizona Realtors Want To Permanently Ban Service Sales Tax," March 12, 2018
  7. Twitter, "Protect Arizona Taxpayers," August 30, 2018
  8. 8.0 8.1 8.2 8.3 8.4 Arizona Secretary of State, "2018 Voter Guide," accessed September 30, 2018
  9. Tucson.com, "ASBA Endorses Yes on Prop 126 to Stop New Taxes on Services for Small Businesses," October 3, 2018
  10. No on Proposition 126 Committee, "Homepage," accessed October 4, 2018
  11. AZ Mirror, "Newly formed anti-Proposition 126 campaign faces uphill climb," October 2, 2018
  12. 12.0 12.1 Tucson.com, "Arizona's Prop. 126 — a ban on taxing services — draws diverse resistance," October 1, 2018
  13. 13.0 13.1 Arizona Daily Sun, "Realtors want to block tax on services -- forever," March 12, 2018
  14. 14.0 14.1 Payson Roundup, "Gila County Republican Committee Opposes Four Proposed Propositions," September 12, 2018
  15. Arizona Secretary of State, "Elections Calendar & Upcoming Events," accessed December 6, 2017
  16. Twitter, "Secretary of State Michele Reagan," July 3, 2018
  17. Arizona Secretary of State, "Status Of Pending Initiatives," accessed August 2, 2018
  18. Arizona Revised Statutes, "Title 16, Section 565," accessed July 18, 2024
  19. Arizona generally observes Mountain Standard Time; however, the Navajo Nation observes daylight saving time. Because of this, Mountain Daylight Time is sometimes observed in Arizona.
  20. 20.0 20.1 20.2 Arizona Secretary of State, "Voters," accessed July 18, 2024
  21. Arizona Secretary of State, "Arizona Voter Registration Instructions," accessed July 18, 2024
  22. Under federal law, the national mail voter registration application (a version of which is in use in all states with voter registration systems) requires applicants to indicate that they are U.S. citizens in order to complete an application to vote in state or federal elections, but does not require voters to provide documentary proof of citizenship. According to the U.S. Department of Justice, the application "may require only the minimum amount of information necessary to prevent duplicate voter registrations and permit State officials both to determine the eligibility of the applicant to vote and to administer the voting process."
  23. ArizonaElections.gov, "What ID Do I Need to Vote Quiz," accessed March 14, 2023
  24. Arizona State Legislature, “Arizona Revised Statutes 16-579,” accessed July 19, 2024