Diamond Star Imposes Sales Tax


The Diamond Star Town Council passed a 2-percent sales tax and fielded questions from developer G. Michael Horton at its last meeting of the year.

The League of Arizona Cities and Towns, an organization that has been providing counsel to the new town, recommended the sales tax, which won't take effect for 60 to 90 days.


Randy White, Diamond Star councilor

"They basically said you will need to collect it, and you will need that money someplace," Vice Mayor Randy White explained.

The tax, which will be collected by the Arizona Department of Revenue, is slightly lower than that imposed by the town of Payson, and covers most of the same goods and services with the exception of tax on hotel rooms.

"We didn't put in a bed tax," Councilor Chuck Heron said.

Horton addressed the council during the public comment session.

"Mr. Horton was there and asked some questions on the budget that were somewhat nebulous, and then after the meeting, within a day, he called and demanded all documentation, minutes and so forth since day one," Heron said. "(Town Clerk) Diane (McDaniel) prepared them for him.

"We have nothing to hide. It's harassment and we know it, but we just go about our business."

Diamond Star Mayor Ronnie McDaniel had a similar take on Horton's appearance.

"He had several questions about our budget, and of course the figures he conjured up were totally different than ours," he said. "Naturally, we let him say his piece."

But Horton, who doesn't live in Diamond Star, but owns property there, said he was merely at the meeting to make sure the new town is doing things legally and correctly.

"My real concern with that interim budget is, one, at this point they have no source of revenue; two, they're involved in litigation that may undo the incorporation; and, three, the interim budget only reflects six or seven months, so you have to at least double that for the full fiscal year," he said. "I don't see the revenue there; I just hope they're fiscally responsible."

But White said Horton didn't have his facts in order.

"He started quoting some facts about our budget and the tax rate, but he really didn't even know how to do the math to make it work," he said. "Was he there to be educated, was he there to stir the pot, was he there to be the agitator?

"I don't know, but I do know he didn't have his facts even close."

White also noted that Phil White Ford supports the new sales tax, even though it could impact its business.

"We're more than willing to be a part of the town," he said. "When Phil had a dealership in Payson, there for a long time he was the biggest tax collector in that town.

"We always thought when we built out here it was only a matter of time until Payson annexed, so we've always anticipated being a part of a town. We're a little disappointed Payson didn't have the foresight to annex us, but that's not what happened."

Other Diamond Star developments:

  • Name change to Star Valley

"The county attorney and our attorneys could see no reason why a town can't change its name to anything it wants, but it turns out there is no precedent in Arizona," Heron said. "So we are officially still Diamond Star, but the League of Cities is going to go to the legislature and figure out how to do this."

  • Town hall site

"We've got some properties in mind and we'll probably make a decision at the next council meeting," Heron said. "The county has offered some space west of the county yard complex; the county has been real good in working with us."

McDaniel agreed.

"That's really gracious of them because that would save us some cost right off," he said.

  • Stopping the pipeline

"We've hired a hydrologist and we're going to start monitoring wells immediately so we can establish a baseline," Heron said.

  • Lawsuit to stop incorporation

The lawsuit has been assigned to the same judge that overruled the referendum petition on Payson's Resolution 2098 -- Superior Court Judge Colin Campbell.

"We've asked for a change of venue," Heron said.

The town is confident the lawsuit will be overturned, according to McDaniel, a former judge.

"(Our lawyers) feel pretty strongly that we'll prevail based on the fact that the statutes are pretty clear that private parties don't have any standing," he said.

The next council meeting is tonight (Tuesday) at 6 p.m. at the Diamond Star fire station.

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