ARIZONA HOUSE OF REPRESENTATIVES

HB 2484: local food tax; equality

PRIME SPONSOR: Representative Shope, LD 8

BILL STATUS: Chaptered

Abstract

Relating to municipal food taxes.

Provisions

1. Requires municipalities and other taxing jurisdictions that impose a TPT or use tax on the sale of food for home or premises consumption to apply the tax uniformly and without any additional tax or fee differential for any specific food item.

a. Clarifies food refers to food intended for human consumption as defined by DOR Rule, in addition to non-alcoholic beverages enclosed in a bottle, can or carton. (Sec. 2)

2. Prohibits a municipality or other taxing jurisdiction from imposing a TPT or use tax on:

a. The manufacture, wholesale or distribution of food, for home or premises consumption; and

b. Any container or packaging used exclusively for transporting, protecting or consuming food at home or on premises. (Sec. 2)

3. Makes conforming changes. (Sec. 1, 2)

Current Law

The sale of food for home consumption is exempt from state TPT (A.R.S. § 42-5102). However, a municipal tax may be levied on food for home consumption and food for consumption on the premises as permitted by MCTC §§ 4-455 and 4-462

A.A.C. R15-5-1860 defines "food" as items intended for human consumption. Food is deemed to be intended for human consumption when its intended or ordinary use is as a food for human consumption or is an ingredient used in preparing food for human consumption.

Additional Information

TPT is imposed on a vendor for the privilege of conducting business in Arizona. Under this tax, the seller is responsible for remitting to the state the entire amount of tax due based on the gross proceeds or gross income of the business. While the tax is commonly passed on to the consumer at the point of sale, it is ultimately the seller’s responsibility to remit the tax. TPT is broken down into 16 different classifications, one of which is the retail classification. The retail classification is comprised of businesses selling tangible personal property at retail.

Use tax is assessed on items purchased in other states and brought into Arizona for storage, use, or consumption and for which no tax or a tax at a lesser rate has been paid in another state. Use tax is imposed on all transactions in which TPT was not.

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Fifty-third Legislature                  HB 2484

Second Regular Session                               Version 4: Chaptered

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