Proposition 436 asks Flagstaff voters to re-approve 1% gross sales tax for common fund – Arizona Every day Solar

Technically, business pay the 1% sales tax themselves — although many pass it on directly to the consumer. And it impacts most transactions in the city. The tax is applied to hotels and motels, restaurants and bars, retail and commercial rentals.

Groceries are exempt, however.

But the tax is set to expire in November 2024. Should voters re-approve the tax, that sunset would be pushed back just over a decade to June of 2035.

If voters decided against re-approving the tax, it would still collect revenue until it expired in 2024, Tadder said, adding that the city would likely ask voters again to approve the tax in 2022.

Tadder said if voters come out against the tax, the loss of that revenue would be a serious challenge for the city.

“[That] would require significant cuts to the general fund programs […] and/or could be a decrease in service levels that the city can provide for these services within our community,” Tadder said. “Or there could be increases in charges, taxes or fees to make up some of this revenue.”

The city has several sales taxes in addition to the 1% general sales tax, all of which have been approved by voters. Those other sales taxes pay for specific infrastructure projects or services, such as the transportation sales tax that was re-approved by voters in 2018.

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