Arizona Voters Broadly Oppose Sales Tax on Digital Services

Date: February 25, 2019

Poll shows overwhelming disapproval across party affiliation, age groups, regions

FOR IMMEDIATE RELEASE
Contact: Chad Heinrich, Arizona State Director, 602-567-0276, [email protected]
or Tony Malandra, Senior Media Manager, 415-640-5156, [email protected]

PHOENIX, Feb. 26, 2019—Arizona legislators looking for revenue through the taxation of digital services such as cloud storage, video conferencing, and website hosting risk tapping into a vein of voter opposition.

Results from an NFIB Arizona-commissioned question on a recent poll of 600 likely Arizona voters conducted by OH Predictive Insights found opposition to taxing digital services as high as 80 percent with 55-to-64-year-olds, 78 percent with Republicans, and 75 percent in rural Arizona. Even 18-to-34-year-olds opposed the tax idea by 61 percent, Democrats by 65 percent, Maricopa County by 72 percent, and Pima County by 74 percent.

“Arizonans don’t want digital services taxed and there is near-universal agreement on it,” said Chad Heinrich. NFIB’s Arizona state director. “Policymakers should support Senate Bill 1460. This bill would shore up a substantial base of digital goods for taxation while clarifying digital services are not taxable; honoring the voters desire as expressed in this poll.

“The status quo is a risky place for our state and local governments to be in, and one of uncertainty for businesses of all sizes. Senate Bill 1460 would bring sorely needed harmonization on the taxation of digital goods and digital services. Small business supports SB 1460 and is working in support of this bill as part of a coalition of companies, industry groups, chambers of commerce, and civic groups.”

Other Coalition Comments

The policy offered in SB 1460 has broad support within Arizona’s business community.

  • Steve Zylstra, president & CEO of the Arizona Technology Council, stated, “As the largest technology association in the state, we make it a priority to work with the legislature to update laws that are outdated due to technological advancements. The proper taxation of digital goods and services, as outlined in SB 1460, is an issue that requires clarification to better serve our economy. The Council and its members fully support this bill because it helps to ensure that digital goods and services are not unnecessarily taxed, or overtaxed.”
  • “In order for any business to thrive, clear and transparent tax laws are required,” said GoDaddy Director of Public Relations Nick Fuller. “Lawmakers, not tax collectors, should determine what is and what isn’t taxable. That’s why SB 1460 is critical for everyday entrepreneurs and large corporations alike.”
  • Glenn Hamer, president and CEO, Arizona Chamber of Commerce and Industry: “It’s in everyone’s interest to have a clearer understanding of what is and what is not taxable in the digital space. The more clarity we’re able to achieve through statute, the more likely businesses are to avoid litigation. We need to be very careful before taxing goods and services that have traditionally not been taxed.”
  • Todd Sanders, president and CEO of the Greater Phoenix Chamber of Commerce: “The Greater Phoenix Chamber advocates for the modernization of Arizona’s tax code as it applies to digital goods and services. The business community has urged lawmakers for clarity and predictability, so businesses can accurately comply with state regulation. The Chamber supports legislation that addresses the necessary updating of terms related to ‘digital goods,’ defining which digital goods or services may be tax-exempt and clearly defining these goods and services in Arizona’s tax code.”
  • “The business community needs a resolution to the ambiguity surrounding taxation of digital goods and services,” said East Valley Chambers of Commerce Alliance spokesperson and Gilbert Chamber President Kathy Tilque. “Clarity in statute is needed for business to know if they should tax something or not. Businesses should not be told in an audit they owe massive amounts back taxes when that same service was not taxable in previous years.”

Senate Bill 1460 is currently awaiting a vote from the full Senate.

Keep up with the latest on Arizona small-business at www.nfib.com/arizona and by following NFIB on Twitter @NFIB_AZ

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For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.

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Twitter: @NFIB_AZ

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