PHOENIX — Arizona lawmakers voted Tuesday against reviewing the various state sales-tax exemptions granted over the years.
Sen. Steve Farley, D-Tucson, who proposed the review, said some of the exemptions probably have merit, but legislators won’t know unless they take a closer look.
Figures obtained by Capitol Media Services show if every transaction were subject to the state’s 5.6 percent sales tax, the state would collect at least $12.2 billion a year. That compares with $4.2 billion collected in the last budget year.
Some of the exemptions are based on policy.
For example, Arizona has decided to tax only a final purchase. That compares with the European system of “value-added” taxes, where every transaction is taxed each time a product or service changes hands. That exemption equals $4.1 billion.
Others were enacted for political reasons, including the decision not to tax food purchased at grocery stores for home consumption, sales that the Department of Revenue say would add $414 million in taxes.
Services also generally are exempt, including nearly $2 billion that would otherwise be collected from medical and hospital services, plus another $440 million if the state taxed prescriptions and medical oxygen. Plus, there is another $1 billion in professional, scientific and technical services.
Some of the other sales-tax exemptions calculated by the Department of Revenue include:
- Items shipped out of state — $49.4 million
- Livestock and poultry feed — $10.5 million
- Machinery used in manufacturing, printing, refining — $44.7 million
- Solar energy devices — $18.7 million
- Lottery tickets — $37.5 million
- Warranty and service contracts — $15.7 million
- Textbooks required by state universities or community colleges — $502,600
- Pipes or valves 4 inches in diameter to transport oil, natural gas, coal slurry — $1.5 million
- Railroad cars, rails, ties — $273,500
- Machinery used in research and development — $2.2 million
- Leasing a mobile home for more than 29 days — $550,800
