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The city collected nearly $18 million in fiscal year 2017, $1 million more than the previous year

 

KINGMAN – Hundreds of merchants doing business in the city of Kingman must convert their cash registers and take whatever other steps are necessary to be prepared for an impending sales tax increase.

 

The 1 cent sales tax hike approved in mid-August by the Kingman City Council goes into effect Nov. 1.

Financial Services Director Tina Moline said the city notified the Arizona Department of Revenue (ADOR), within 10 days of Council approval as is required by law.

“Anyone who pays or collects sales taxes and then forwards money on to the Department of Revenue – and that would be all of our merchants in town – are required to receive from the department any sort of notification relating to any type of increase or change in the rate structure for the city of Kingman,” Moline said.

Department spokesman Ed Greenberg said the ADOR uses its website and other means to provide the information and opportunity that merchants need to assess the proper tax rate and forward the revenue to the state before the money is returned to counties and cities throughout Arizona.

He said some 2,400 businesses in Kingman collected last fiscal year what is formally called the Transaction Privilege Tax, but is more commonly referred to as sales tax.

“Overall, statewide, we collected $9.1billion from the transaction privilege tax,” Greenberg said. “For the city of Kingman, for fiscal year 2017, it was $17.7 million that was distributed back to the city of Kingman from July, 2016 to June 30, 2017. For fiscal year 2016 it was $16.7 million.”

It behooves all business owners or managers to convert to the new rate on Nov. 1, because they will be responsible for payment when under-collection is discovered after the fact. Moline said it is unclear how many businesses may fail to convert on time.

“Because this is the first time there’s actually been an increase in the tax since I’ve been the director, I’m going to be anxious to see how many are going to maybe fall through the cracks,” she said.

The increase will bump up Kingman’s sales tax from 8.35 cents per dollar spent to 9.35 cents, the highest in Mohave County. It is the only local revenue stream as there is no property tax in the city, unlike elsewhere in Mohave County. The increase has been formally dedicated to road maintenance and the construction of two traffic interchanges on Interstate 40.

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