Arizona Realtors Want To Permanently Ban Service Sales Tax

By Holliday Moore
Howard Fischer
Published: Monday, March 12, 2018 - 12:51pm

While a bill at the legislature debates whether or not to tax digital services like e-books and music bought online, another debate aims to block sales taxes from touching, arguably, the largest service most Arizonans pay: their realtor's fees.

More than $1 million is being poured into the "Protect Arizona Taxpayers" campaign to permanently stop sales taxes on any services.

The Arizona Association of Realtors is behind those campaign dollars. Members want to ask voters if they are willing to pay taxes on realtor services when selling their home.

But, Tucson senator Steve Farley is arguing for taxing realty services that could generate an average of $840 during most home sales.

"These are realtors," he reminded fellow legislators. "Do they not need good roads, good fire and police protection, good schools to sell their houses?"

He is concerned permanently cutting off the ability to tax services could short-change the state as shopping habits shift to online purchases and the economy follows.

The initiative came as a surprise to House Speaker J.D. Mesnard.

"I've not been looking at taxing services in any reform I've been working on this session,'' the Chandler Republican said. "I don't know of other efforts to go down that road, either.''

But Mesnard said that doesn't mean he will support constitutionally barring lawmakers from ever considering it.

"I certainly don't like having our hands tied,'' he said.

Other services that would be banned from taxation could include doctors and hospital visits, legal fees, and childcare.

The initiative needs 225,963 signatures by July 5 to put the issue on the November ballot.

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