SB 1208
Initials LM/KL Page 1 Transportation & Infrastructure
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-seventh Legislature
First Regular Session
Senate: PS DP 7-0-0-0 | 3rd Read 16-13-1-0
SB 1208: vehicle titles; out-of-state purchase
S/E: home consumption items; tax exemptions
Sponsor: Senator Payne, LD 27
Committee on Transportation & Infrastructure
Summary of the Strike-Everything Amendment to SB 1208
Overview
Exempts tax on retail and use tax for home consumption items, including specified vegetables
and products, beginning July 1, 2027. Restricts a city, town or other taxing jurisdiction from
levying a transaction privilege, sales, use, franchise or other similar tax or fee on the sale for
human consumption of specified products.
History
A retail classification is comprised of the business of selling tangible personal property at
retail. The tax base for the retail classification is the gross proceeds of sales or gross income
derived from the business. Some current exemptions include items purchased with United
States Department of Agriculture coupons, articles of food, drink or condiment and accessory
tangible personal property to a school district or charter school and food and drink to a person
that is working in a restaurant that provides such food and drink without monetary charge
to its employees for their own consumption on the premises during the employees' hours of
employment (A.R.S. § 42-5061).
The use tax does not apply to the storage, use or consumption of tangible personal property.
(A.R.S. § 42-5159)
The Arizona Department of Revenue (DOR) states the use tax was instituted to protect
Arizona sellers who otherwise would be at a competitive disadvantage when out-of-state
sellers make sales of goods to Arizona customers without charging tax. Every dollar collected
goes to the state General fund and available for government and public services. Currently,
the state use tax rate is the same as the state transaction privilege tax rate (also referred to
as sales tax) and is at 5.6%.
Provisions
1. Expands exempted items, beginning July 1, 2027, from the tax on retail classification
based on the gross proceeds of sales or gross income, to now include:
a) nuts;
b) rice;
c) legumes;
d) baby formula;
e) baby food;
f) seeds and plants for use in gardens to produce food items for personal consumption;
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1208
Initials LM/KL Page 2 Transportation & Infrastructure
g) vitamins; and
h) baby diapers. (Sec. 1)
2. Broadens the exemption of the storage, use or consumption in this state of tangible
personal property, beginning July 1, 2027, from the levied use tax, to now include:
a) nuts;
b) rice;
c) legumes;
d) baby formula;
e) baby food;
f) seeds and plants for use in gardens to produce food items for personal consumption;
g) vitamins; and
h) baby diapers. (Sec. 2)
3. Prohibits a city, town or other taxing jurisdiction from levying a transaction privilege,
sales, use, franchise or other similar tax or fee, beginning July 1, 2027, on the sale for
human consumption of:
a) bread and flour products;
b) cereal and cereal products;
c) vegetables and vegetable products;
d) fruit and fruit products;
e) sugar and sugar products, including sugar substitutes;
f) butter, oleomargarine, shortening and cooking oils;
g) spices;
h) condiments;
i) milk and milk products;
j) eggs and egg products;
k) cheese and cheese products.
l) meat and meat products; and
m) bottled water, carbonated water, mineral water and ice cubes. (Sec. 3)
4. Exempts DOR from rulemaking requirements of administrative procedure for one year
after the general effective date. (Sec. 3)
5. Makes conforming changes. (Sec. 3)