Hearing on Transaction Privilege Tax bill held
Rep. Albert Hale cites inequities in tax affecting tribal nations
PHOENIX, Ariz. - Last Monday, the House of Representatives Ways and Means Committee held a hearing on the Transaction Privilege Tax (TPT) bill (HB2566) sponsored by Rep. Albert Hale of Legislative District 2. The TPT is sales tax imposed by the state of Arizona on non-Indian owned businesses operating on Indian lands.
Rep. Hale, whose legislative district includes five Indian Nations, voiced concerns over the inequities that exist and has existed with the TPT law.
"The distribution formula does not allow for tax revenues to be returned to Indian Nations even though citizens of these Nations paid the tax. The purpose of taxation is to return to the people the revenue in form of services or funds," he stated.
Rep. Hale testified and told the committee "Navajo Nation taxpayers paid approximately $13 million in TPT taxes annually. None of these dollars are returned to the Navajo people. Rather, pursuant to state law, the TPT revenue is distributed to incorporated municipalities, counties, and the state. Municipalities and counties use their TPT funds for buildings, infrastructure, programs, and many other purposes."
"Resources are taken from Indian people and are not being returned. Navajo people are paying these taxes yet they are not benefitting from them. The issue is equity. HB2566 is designed to rectify the ... omission of Indian Nations from the TPT revenue distribution. This leaves no TPT funds available for Indian people ... to support public infrastructure and programs in their communities. There are dire needs on all Indian Nations for basic services such as libraries, child care centers, youth centers, playgrounds, and senior center facilities."
Rep. Hale stated that this has been his mission since taking the state Senate office in 2003. He has sponsored a TPT bill every year. Twice the bill was heard, but not voted on by the Committee. He expressed concern that the legislature ignores the fact that Indian people pay taxes and that it is disrespectful of committees to not call for a vote.
"If we at least had a vote, we would know where we stand and what our options are. Representatives from the Navajo Nation and the White Mountain Apache Nation drove long distances to testify, but they were not [given the opportunity] to testify. To not permit people to testify and to not call for a vote on the bill is both disrespectful and insulting," Rep. Hale said.
Numerous Indian Nations expressed support for the proposed TPT legislation. In a letter addressed to the Committee, Wilfred Whatoname, Chairman of the Hualapai Indian Nation states, "HB2566 balances the existing state tax distribution scheme for Arizona's Indian tribes. This bill will finally and fairly enable Indian tribes to benefit from some of the Transaction Privilege Taxes collected on businesses operating on tribal lands."
He continued, "Our visitors and our residents directly contribute to Arizona's tax base. Yet, many Arizona tribes, like the Hualapai, receive little benefit from TPTs levied on businesses located on our lands. We thank Representative Hale and the sponsors for their efforts to bring equity to our Arizona state tax distribution scheme."
Rep. Hale said he realizes the Arizona municipalities, counties and state are in need of funds, but, whether the state is in a deficit or has abundant revenue, the fact remains that tribal groups do not benefit from the TPT revenues.
Sen. Jack Jackson Jr. of Legislative District 2, sponsored an identical TPT bill in the Senate. His bill has not been heard. Sen. Jackson expressed disappointment in the lack of Committee action.
"In 2003, I introduced this bill and after much conversation with ... Committee members, my bill was passed out of committee in 2004 with unanimous support. These members realized that, like state and local governments, tribal governments will be able to use these funds for their governmental services such as providing better roads, running water, electricity, and public safety to all those who do business on their lands," he stated.
Sen. Jackson concluded, "I am very disappointed to find that the House Ways and Means Committee for this session could not give HB 2566 the same support."