Thousands of merchants throughout Mohave County will be rolling back the Transaction Privilege Tax (TPT) at the end of the year. A 20-year quarter-cent sales tax increase approved by the Board of Supervisors (BOS) in 1999 will sunset on Dec. 31 of this year.
Financial Services Director Coral Loyd said the quarter cent sales tax dedicated to capital improvement projects generated $119.2-million in the first 19.5-year period through the end of June. Loyd projects it will generate almost $4-million more, a total of $123-million, when it expires as the new year begins.
The tax increment over the years funded construction of a number of new buildings including the sheriff’s office, government administration building and detention center. It paid for a number of other projects as well, including the demolition of the old sheriff’s office and the renovation of the Negus Building for its current use by the probation department.
The 20-year tax bump also funded court facility projects in Lake Havasu City and Bullhead City, and the Development Services building in Kingman.
County Manger Mike Hendrix said the entirety of what the tax will generate the rest of this year is earmarked for completion of the courthouse addition project, which is well underway. Hendrix said he is hopeful that the county will be able to fund the remodel of the existing courthouse which is planned when the addition project is finished.
Hendrix said the county has already earmarked a $3-million budget carryover for the remodel that carries an estimated $5-million price tag. He said the other $2-million might be made up through use of budgeted but unspent funds (commonly resulting from funded, but vacant positions), and possible growth of the assessed primary property tax base.
A review of the history of the quarter-cent sales tax, and a chart provided by Loyd shows that its generation topped out in 2006 and 2007. Substantial recovery is reflected in 2018 and 2019, but this year’s projection does not quite return to pre-recession peaks.
Loyd said she initiated a dialogue with the Arizona Department of Revenue (ADOR) back in March.
``ADOR bears the responsibility of informing businesses about tax changes and it is anticipated ADOR will begin to publish the notice of the tax decrease on or after November 1, unless there is a BOS action to change the sunset date between now and the November 1 ADOR deadline,” Loyd said.
Agency Communications Director Ed Greenberg said ADOR has an internal process in place that kicks in when advised a sales tax adjustment is being implemented. ``This includes updating rate tables on the ADOR website, highlighting the new rate in TPT information updates, such as newsletters and on TPT forms,” he said. He said there approximately 10,500 businesses in Mohave County must roll back the rate at years’ end.
``The expectation is by 12:01 on Jan. 1, 2020 businesses would have made the necessary adjustments to their systems to reflect that change,” Greenberg said.