PHOENIX — A bill that began its life as a small tax break for companies
that rent ignition interlock devices for people with DUI convictions but ended
up as a catch-all for tax breaks that lawmakers could find no other place to
stash in the Legislature’s final hours is now law.
Arizona Gov. Jan Brewer signed SB 1179 sponsored by Sen. Steve Yarbrough,
R-Chandler, on Thursday. It exempts interlock companies from the state’s sales
tax on rentals. State auditors at the Department of Revenue required the
companies to begin paying tax several years ago, and they went to the
Legislature to get an exemption. They argued that they don’t really rent the
devices and the Legislature agreed.
The state estimates the loss in yearly tax revenue at about $600,000.
As lawmakers rushed to adjournment last week, those with bills that had
languished looked for places for them to land. House members with tax breaks in
mind found SB1179, adding four amendments in the late-night hours of June 13.
The bill was amended to exempt a company that sells energy drinks that also was
hit with an unexpected tax and a large fine and to do the same for destination
management companies that broker travel arrangements.
Rep. Tom Forese, R-Chandler, said he put those two provisions into the bill at
the last minute to right a wrong.
“This is the tale of two DOR abuses,” Forese said. “DOR is predatory on
Another provision allows people who don’t itemize to take charitable
deductions, a change that is expected to cut state revenue by $19 million. Yet
another greatly increases deductions for college savings accounts, from $750 to
$2,000 for a single individual or head of household and from $1,500 to $4,000
for married couples filing jointly. That will cost the state nearly $4 million
in yearly revenue.
Biofuel manufacturers also got a big break, extending a property tax cut set to
expire in 2016 until 2023.
The Republican-controlled Legislature wasn’t split on the issue, with the
Senate and House voting unanimously to pass the bill.