Small Town News


Budget may lead to tax changes

The Camp Verde Journal of Camp Verde, Arizona

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The Camp Verde Town Council rolled up its sleeves last week and started getting into the work of planning out the budget for the 2015-16 fiscal year, which begins Wednesday, July 1.

Budget work sessions were held April 29 and Friday, May 1, with others planned for this month.

The town recently increased its sales tax from 3 percent to 3.65 percent while continuing to exclude food from the tax. Numbers as of the end of March show that the town is on track to bring in around $40,000 less than expected due to the increase, Town Manager Russ Martin said.

Other budget issues include the recent problem with the Steve

Country auto dealership on the edge of incorporated town limits. The dealership was annexed into town limits through a February 2005 agreement that provided tax benefits. The dealership's lot currently stands empty and there have been talks to bring another dealership to the area.

All of this coming together led Martin to make a proposal that could potentially change the town's tax structure when it comes to purchasing big-ticket items like cars, trucks and recreational vehicles. The idea would be to set up the sales tax in a tiered system, Martin said, where the tax rate would drop on a purchase once a certain dollar amount is reached. "It's been brought to our attention within the last month," Martin said, adding that it came up during the talks surrounding the auto dealership.

Nineteen other municipalities in Arizona use a similar system, he said.

It could serve as an incentive to bring more business to Camp Verde, Martin said, particularly those that sell those big-ticket items.

The current proposal being put forward by Martin would drop the tax rate to 1 percent on every dollar spent on an item over $5,000."We think 1 percent beats the band," Martin said. "It would make it one of the lowest tax rates in the state of Arizona. On a $200,000 RV that really makes a huge difference."

As of right now, it really doesn't make an impact since Camp Verde doesn't have many of those types of items for sale in town limits."3.65 percent of nothing is still nothing," Camp Verde Economic Development Director Steve Ayers said. "It's not unusual for a dealership to bring $400,000 to $500,000 in tax revenue into the community."

Martin said he felt it was ridiculous that Camp Verde was right off of 1-17 and didn't have anything like an RV dealership.

Councilman Brad Gordon said he disliked the Country deal, which he felt basically acted as a tax break for just one person. Gordon said he'd like to see this idea possibly expanded to a graduated scale and not just apply to things like cars and trucks. "We want to start at a place that says we are aggressively competing," Ayers said.

The issue is expected to come back before the Town Council at its Wednesday, May 6, meeting, set for 6:30 p.m., Town Hall, 473 S. Main St. Room 106.

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Original Publication Date: May 6, 2015

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