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Contractors Seek Exemption From Sales Tax Increase

PHOENIX-A state legislator has introduced a bill that would allow general contractors to avoid paying a sales tax increase on contracts signed before June, a move that could save them tens of million of dollars but is opposed by the governor.

By D.J. Burrough | Updated on March 08, 2001

PHOENIX-Arizona’s general contractors want to be exempted from a sales tax increase set to go into effect in June, a move that would save them millions but would reduce the size of the state’s education budget.

State representative Steve May (R-Paradise Valley) has introduced a bill that would allow contractors to sign multi-year contracts prior to the June 1 enactment of sales tax hike earmarked for education.

“Since margins in the construction industry are extremely low due to intense competition, tax-rate changes made after the initial bid will be a hardship to many,” says a memo to Gov. Hull from the Arizona General Contractors Association. “Contractors are stuck with absorbing the tax increase as a loss.”

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