This bill proposes to amend Title 9 of the Arizona Revised Statutes by adding a new section, 9-500.54, which would impose a cap on transaction privilege taxes and excise taxes levied by cities or towns with populations of 550,000 or more. Specifically, it would limit these taxes to a maximum rate of 2.5% for each classification, and any new tax or increase in existing rates would require voter approval if it exceeds this limit. The bill also clarifies that the tax rate limit applies separately to each classification and prohibits cities from adopting new taxes or expanding tax bases that would breach this cap without voter consent.

Additionally, the bill outlines enforcement mechanisms for violations, stating that if a city or town exceeds the tax rate limit, the attorney general must notify the state treasurer, who will withhold state shared revenues proportionate to the unauthorized increase until the issue is resolved. The bill explicitly states that it does not apply to ad valorem property taxes and provides definitions for "excise tax" and "transaction privilege tax classification" to ensure clarity in its application.

Statutes affected:
Introduced Version: 9-500.54