Sales Tax 101

Sales Tax Measures on the Ballot November 3rd, 2020

by Sarah Craig

While there’s a presidential election taking the mainstage this November 3rd, there are a number of sales tax measures on local and state ballots across the country. We’ll highlight a few local sales tax measures to be on the lookout for here. 

Arizona: Ballot Proposition 207 – Smart and Safe Arizona Act

Proposition 207 would legalize the sale and use of recreational marijuana for persons 21 years of age and older. The initiative establishes a 16.0% tax on the sale of recreational marijuana and recreational marijuana products. Marijuana establishments would also pay licensing fees.

The tax and the licensing fees are projected to generate $166 million in annual revenue after the program becomes more fully operational in the next several years.

These monies would be deposited into the Smart and Safe Arizona Fund (SSAF). SSAF monies would first be used to pay administrative costs of certain agencies. The remainder of these monies would then be distributed as follows:

  • 33.0% to community colleges
  • 31.4% to local law enforcement and fire departments
  • 25.4% to the state and local transportation programs
  • 10.0% to public health and criminal justice programs
  • 0.2% to the Attorney General for enforcement

Read the full brief here. 

Arkansas: Arkansas Issue 1

A yes vote would support making the 0.5%  sales tax increase permanent for transportation funding. The tax has been in place since Issue 1 was introduced and enacted in 2012 but is set to expire in 2023. The tax is forecast to raise $293.7 million in the first full year of collections.

Read the full brief here.

California: San Francisco Proposition RR

This initiative would create an additional sales tax of 0.125% for 30 years to increase revenue for the Caltrain rail service. Overall. This would increase San Francisco sales taxes from 8.5% to 8.625%.

Read the full brief here.

New Jersey: Question 1

This amendment would legalize the purchase of recreational marijuana.Only adults at least 21 years of age could purchase marijuana

All retail sales of cannabis products in the new adult cannabis market would be subject to the New Jersey’s sales tax. 

Read the full brief here. 

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