The proposal from Rep. Leo Biasiucci, R-Lake Havasu City, aims to cut the sales tax that some cities and towns in the state charge on grocery items, including milk, bread and eggs. The measure, HCR2021, passed the House on March 4, 37-21, with some Democrats supporting the concurrent resolution.
“This is a regressive tax,” Biasiucci said. “Everybody needs food to survive.”
The measure has changed substantially since Hobbs vetoed its first version in 2023, yet she won’t have an opportunity to comment on it this year. The resolution would go to the 2026 ballot for voters to decide if it passes the Senate.
The 2023 version of the bill and the initial version of this year’s resolution originally proposed completely prohibited any city or town from imposing a tax on grocery items. Several mayors from rural cities appeared before the House Ways and Means Committee to testify against the measure and said food tax revenue was vital for city budgets.
Rep. David Livingston, R-Peoria, worked with the cities to amend the resolution to allow them to freeze food tax rates at their current levels. Cities with a tax rate of less than 2% could increase the rate to a maximum of 2% with approval from voters.
An earlier amendment would have forced cities with a rate greater than 2% to lower to a 2% cap, but some Republicans, including Rep. Walt Blackman, R-Snowflake, opposed that version.
Snowflake imposes a 3% sales tax on food, according to the Arizona Department of Revenue. Blackman publicly opposed the measure in a now-deleted post on X, but he commended Biasiucci and Livingston for finding a compromise with rural cities.
“I was at odds with this bill,” Blackman said March 4. “The bill, with the way it is now with the amendment, does protect our smaller communities.”
The resolution cleared the House with every Republican supporting it. However, some Democrats who previously supported the measure voted against it because they felt the amendments did not do enough to lower taxes.
“I fundamentally don’t believe we should be taxing basic necessities and essential items like food,” said Rep. Alma Hernandez, D-Tucson.
Rep. Alexander Kolodin, R-Scottsdale, said the measure wouldn’t help most Arizonans with the price of their groceries.
“The amendment process on this bill is proof that the more stakeholders, the less steak,” Kolodin said. “This bill is not as good as the people of Arizona deserve.”
Despite his grievances with the measure, Kolodin voted in support of it and said he did appreciate that it would prevent cities from raising taxes on food without voter approval.
Other Democrats who oppose the measure are concerned about the revenue impact on smaller cities even with the added amendments.
“Here in the great state of Maricopa, we’re voting on how we’re going to impact rural areas that are going to be hit the most,” said Rep. Stacey Travers, D-Tempe. “I know [Biasiucci’s] heart is in the right place.”
A fiscal note on the bill from the Joint Legislative Budget Committee estimates municipal sales tax revenue would be reduced by $227 million if voters approve the measure and it takes effect in fiscal year 2028, although the fiscal note was published before the measure was amended. Seventy of Arizona’s 91 incorporated cities and towns tax grocery foods.
Rep. Patty Contreras, D-Phoenix, said that food tax revenue makes up a significant portion of municipal budgets for many small towns. Shawn Palmer, mayor of the town of Taylor, said during the House Ways and Means hearing that his town would be most impacted by the measure. Food tax revenue makes up more than 30% of Taylor’s budget.
“We can’t get more conservative than we are right now,” Palmer said. “A 3% food tax is a lot more equitable than adding a new property tax and concentrating that tax on 4,500 people.”
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