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Officials in Yuma, Ariz., will be reviewing an ordinance allowing for sales tax breaks on “big ticket items,” including recreational vehicles, cars, trucks, farm equipment and smaller manufactured homes.
According to a report in the Yuma Sun, the Yuma City Council approved an ordinance in 1999 limiting city sales tax to the first $25,000 of big ticket purchases. After that point, the buyer doesn’t pay the city’s sales tax.
It was originally introduced after the city annexed several businesses along old Highway 80, according to Finance Director Pat Wicks. “RV dealers were fearful of a competition loss with dealers outside of the city,” he said.
In 2002, the council voted to extend the two-tier sales tax structure for another three years, which will expire on July 1.
The council will be considering a proposal asking to extend the sales tax break to 2008, but raise the sales tax tier to $30,000. “Prices have changed. We thought we would move it up a bit,” Wicks said.
Eventually, Wicks said the city staff would like to eliminate this two-level sales tax structure. “Perhaps the index could move up a little bit at a time, so it goes away without doing significant harm,” he said.