On Oct. 1, the Town of Payson quietly put to rest a portion of its sales tax.
Most residents likely haven’t noticed the change as it represented just .12 percent of the sales tax.
“On a $100 purchase, that’s 12 cents,” said Deborah Barber, Payson’s chief financial officer.
Even on large purchases, such as a $30,000 car, that is $36.
But several business owners reported they had no idea the sales tax rate had changed.
“No one goes out of their way to make sure businesses know,” said Shawn Dugan, the owner of Rim Liquor, Rim Wash and the Chevron gas station.
While the state posts changes to the sales tax on its websites, a business owner would have to have “mental telepathy” to know to look, said Dugan.
“(The government) feels it has done its job if it posts on the website,” said Dugan.
However, the town still had not updated its website to reflect the now lower tax rate.
And collecting the wrong amount can cause headaches for business owners.
One — if the business under collects taxes, as some did when the Payson Town Council raised the sales tax by .88 percent a couple of years ago, they have to dig into their own pockets to pay the difference.
If a business over collects, as some did when the reduction of the sales tax went into effect, the state demands the overage as well.
The Arizona Department of Revenue confirmed this is the case.
Which frustrates business owners such as Dugan.
“It’s all complicated,” said Dugan.
The .12 percent sales tax started when Payson residents voted for a bond to build a new fire station off of Tyler Parkway. The additional tax also paid for upgrades to equipment and buildings elsewhere.
When the bond passed in 2003, it included a sunset clause.
“It’s now been paid off,” said Barber of the fire station.
The current council briefly discussed keeping the tax during budget sessions this year to use it for other projects around town, but ultimately abandoned that idea.
“The council made the decision to discontinue the tax,” said Barber.
Barber said the state then required 60 days to process the request and that is why there was a delay from the vote to seeing the change at the cash register.
Consumers should have seen the change already. At the beginning of the month, Barber said the Arizona Department of Revenue reportedly notified local businesses to stop collecting the additional tax.
Dugan says that’s not how it works, though. He said businesses don’t see the difference in sales tax until they attempt to pay their monthly sales tax receipts. Which explains why both businesses and consumers are confused over when this went into effect.
It seems many consumers knew of the change before businesses. Barber said she has had calls from “all over the country about the tax rate change.”
She believes people have concerns that they will pay too much tax.
The sales tax on receipts should show 9.48 percent collected for sales tax.
Prior to sunsetting the bond, the sales tax totaled 9.6 percent.