ARIZONA NEWS

Proposition 126 would amend Arizona constitution to ban tax on services

Oct 9, 2018, 4:48 AM | Updated: 8:44 am
(Pexels photo)...
(Pexels photo)
(Pexels photo)

This week, KTAR News 92.3 FM will highlight the five ballot initiatives that will be on the Arizona ballot for the midterm elections next month. On Tuesday, KTAR News’ Kathy Cline will break down Proposition 126. 

PHOENIX — Proposition 126 would amend the Arizona Constitution to ban a professional services tax on any services that are not taxed as of Dec. 31, 2017.

The ban includes services such as real estate, accounting and health care, such as doctor visits.

The proposition also states that counties and local municipalities cannot get around this by imposing their own professional service tax. However, if local improvements are needed, they could make special assessments.

Supporters argue bad ideas like more taxes are contagious — and must be stopped.

One of those supporters is Sedona-area realtor Holly Mabery. She heads the group Citizens for Fair Tax Policy, which is sponsoring the proposition. (The group is funded by the Realtor Issues Mobilization Fund, which is part of the Arizona Association of Realtors.)

The idea for this, she said, came from a 2016 state legislative attempt to impose a professional services tax, which went nowhere. She said it’s bad enough politicians are always looking for more money — but paying more taxes on services like dog grooming or beauty shop visits is worse.

She said the burden on small-business owners would also increase. “That professional, every month, would have to become a tax collector and forward money to the state,” she said.

Mabery said if future generations want the power to tax services, they could amend the constitution again.

“We really believe in power to the people, and allowing them to make the decision,” she said. “So many times we’re not getting it done, legislatively.”

On the other hand, Prop 126 opponents (Gov. Doug Ducey, among them) feel taking away a potential revenue source is shortsighted.

Max Goshert, a senior research associate with the Grand Canyon Institute, said for the past several decades, Arizona’s economy has shifted from goods to services.

“Sales tax has reduced from bringing in 44 percent of the GDP to now 37 percent over the past two decades,” he said. “That equates to roughly $1 billion each year.”

In addition, Goshert said, there are legislative safeguards in place against tax increases.

“It could be difficult because they do have to get two-thirds of both houses to pass that,” he said. “But, they still have the ability should our economy downturn or should our state revenue need it.”

Lifetime Windows & Doors

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

(City of Tempe Photo)...
KTAR.com

Arizona cities exchange fireworks for other showy July Fourth displays

A few Arizona cities plan to light up the night sky without fireworks to celebrate Independence Day this year. 
1 day ago
(Facebook Photo/Phoenix Police Department)...
KTAR.com

Phoenix police involved in shooting near 52nd Street and Thomas Road

Phoenix police were involved in a shooting with a suspect on Monday night, authorities said. 
1 day ago
The Colorado River winds its way along the West Rim of the Grand Canyon in the Hualapai Indian Rese...
Associated Press

Grand Canyon starting water limitations after pumphouse outage

Grand Canyon National Park is starting water conservation measures on the North Rim due to an electrical failure involving the Roaring Springs pumphouse.
1 day ago
(AP Photo/Ross D. Franklin)...
Danny Shapiro

National Guard sets up barricade around Arizona Capitol following abortion ruling protests

The Arizona National Guard has set up razor-wire fencing around the Capitol complex in downtown Phoenix following protests over the weekend in response to the Supreme Court’s decision to overturn the constitutional right to abortions.
1 day ago
Traffic stops as thousands of protesters march around the Arizona Capitol after the Supreme Court o...
Associated Press

Groups want court to block Arizona ‘personhood’ law in wake of Roe ruling

An emergency motion was filed seeking to block a 2021 Arizona “personhood” law that abortion rights supporters fear will be used to halt all abortions.
1 day ago
(KTAR News Photo/Jeremy Schnell)...
Kevin Stone

Sinkhole almost swallows car after pipe breaks on Phoenix street

A motorist escaped uninjured after driving into a sinkhole that opened up after a pipe broke under a Phoenix street Sunday night.
1 day ago

Sponsored Articles

...
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
...
Christina O’Haver

BE FAST to spot a stroke

Every 40 seconds—that’s how often someone has a stroke in the United States. It’s the fifth leading cause of death among Americans, with someone dying of a stroke every 3.5 minutes.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Proposition 126 would amend Arizona constitution to ban tax on services