The progressive Tempe City Council has approved fighting for the right to impose a regressive tax on services. The Council voted in favor of exploring litigation against the State of Arizona to refute the legality of Proposition 126.
Proposition 126 was a statewide ballot initiative that outlaws new taxes on services.
The Tempe City Council could join the City of Mesa is litigating the matter. Following direction from the City Council at last week’s Special Meeting, Tempe is retaining outside legal counsel and will explore litigation.
The cities of Scottsdale and Flagstaff could join the litigation as well.
Tempe voters approved with 68 percent of the vote a sales and use tax for arts and culture, in the city’s Special Election was Nov. 6. The Tempe sales and use tax of one-tenth of one percent for arts and culture. It pertains goods sold at retail. Sales taxes are regressive in nature and impact the middle-class and poor populations disproportionately.
Tempe leaders say that Proposition 126 is “flawed and was written without definitions of key terms for the types of activities that are subject to taxation.”
The new tax will take effect on Jan. 1, 2021, immediately after the existing one-tenth of one percent tax expires in 2020, so no increase will be felt by Tempe residents.