Tempe Businesses Advised to Prepare for July 1 Sales Tax Reduction

The City of Tempe reminds local businesses to re-program their computer equipment to reflect a lower city sales tax rate of 1.8 percent beginning July 1.

The upcoming 2014-15 fiscal year starts July 1 and it marks the end of the additional sales tax approved by voters and promised by the City Council to expire in 2014. Those funds contributed to the General Fund – the city’s biggest operating fund – for four years during the worst of the latest economic recession and helped the city avoid more extensive layoffs and service cuts.

Tempe voters passed Proposition 401 during the May 18, 2010, General Election, allowing for a four-year, two-tenths of a cent sales tax increase that enabled the city to preserve essential services such as public safety and recreation programs. Effective July 1, 2010, the city portion of sales tax went from 1.8 percent to 2 percent. On July 1, 2014, that rate will go back to 1.8 percent.

“As a City Council, we promised our residents that the additional tax would sunset in four years and we are fulfilling that commitment,” said Mayor Mark Mitchell. “We are thankful to residents and now we ask our local businesses to be mindful of the change and prepare for it.”

In additional budget-related news, community members are invited to submit ideas and feedback via Tempe Forum, the city’s online forum tool. Simply visit www.tempe.gov/forum and select the 2014-15 budget topic. Respondents must register with the city’s online forum vendor in order to have their viewpoints officially included. Your name does not have to appear beside your comment if you would prefer not to have it displayed. The identities of anonymous writers are never made known to the city.

For updated details on the formulation of budgets for the 2014-15 fiscal year, as well as projected dates for City Council discussions and votes on both the operating and capital budgets, visit www.tempe.gov/budgetplan.