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State Legislature Exempts Two Industries from Paying Utilities Sales Tax


The state’s manufacturers and smelters are in line for a big tax break not being offered to other companies and individuals. Arizona Public Radio’s Howard Fischer explains.

Without debate, both the House and Senate voted Tuesday to exempt those two types of firms — and only those two — from having to pay the state sales tax due on the purchase of electricity and natural gas. The legislation now goes to Gov. Jan Brewer for her anticipated signature despite the $17 million loss of state revenues. Gubernatorial press aide Andrew Wilder said his boss thinks it will make a difference when companies decide whether to do business here.

“They’re going to look at energy costs as one of the incentives. And currently, Arizona is one of only a handful of states that impose the sales tax on manufacturers for the power used to create their products. That puts Arizona, our current manufacturers and the ones we hope to recruit at a disadvantage,” Wilder said.

The legislation specifically limits the break to companies who, through a series of operations, take something and make it into something else distinctive. But, to make sure others do not line up for the tax break, it lists exclusions for everything from processing and job printing to mining and operating a restaurant — even if it does turn out distinctive dishes.

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