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Governor Opposes Contractors Tax-Relief Bill

PHOENIX-Gov. Jane Hull is lobbying to kill a contractors bill that grandfathers multi-year contracts that have been inked before June 1, the first day of a sales tax increase that benefits a $1-billion school repair program.

By D.J. Burrough | Updated on April 30, 2001

PHOENIX-A bill that could save contractor millions is being opposed by the governor and appears headed toward death.

Rep. Steve May (R-Paradise Valley) had introduced a bill earlier in the session that would allow contractors to sign multi-year contracts prior to the June 1 enactment of a sales tax hike earmarked for education. The bill proposes that contractors who placed bids prior to November’s passage of the sales-tax increase should be exempt from paying the additional .06%.

If the bill isn’t passed, contractors who must honor bids for jobs made prior to the November passage will be harmed, May says. “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 the Arizona General Contractors Association in a memo to Gov. Jane Hull. “Contractors are stuck with absorbing the tax increase as a loss.”

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