Current Events > State is proposing caps on local sales taxes. How do you feel about that?

(+) Yeah! (+)

I'm against it personally. I think sales taxes are kinda bad, and they're doing other things to incentivize counties and cities to shift to property taxes, which I agree with, but the way they're doing so is by offering tax credits to businesses that pay local property taxes which I don't like
---

It has its good and its bads as you've said, I can imagine a cap happening. Though all of this is just bad.
---

How does a cap on sales tax work?
---

emblem boy posted...

How does a cap on sales tax work?

City can only levy 5%; county, 3%. No cap for school districts, but they almost never finance through sales tax, at least here

If they're already higher, it gets grandfathered in, until it expires or changes
---

Bump for night ce
---

Balrog0 posted...

I'm against it personally. I think sales taxes are kinda bad, and they're doing other things to incentivize counties and cities to shift to property taxes, which I agree with, but the way they're doing so is by offering tax credits to businesses that pay local property taxes which I don't like

Do the positives you mentioned not outweigh the negatives here? How much are these tax credits
---

No, that's heavy handed and dumb.
Just mandate that the total sales tax rate is conspicuously posted at or near the entrance of any establishment that collects it, and the alleged problem will correct itself.

Or, even better, add the sales tax to the shelf price.

emblem boy posted...

Do the positives you mentioned not outweigh the negatives here? How much are these tax credits

the tax credits for business are entirely open-ended and for 100% of the local tax liability, which was actually a big point of contention in yesterday's hearing

I mean, the state already regulates how much local property tax rates can go up yearly and also how much assessed property values can go up year to year, so there are effectively caps on property taxes, too so the negatives definitely outweigh the positives in the short term, even if the long term consequence is to put pressure on localities to raise property taxes

Questionmarktarius posted...

No, that's heavy handed and dumb.
Just mandate that the total sales tax rate is conspicuously posted at or near the entrance of any establishment that collects it, and the alleged problem will correct itself.

Or, even better, add the sales tax to the shelf price.

Arkansas is one of the (Few?) states that allows you to include sales taxes in the sticker price from what I understand
---

Questionmarktarius posted...

No, that's heavy handed and dumb.
Just mandate that the total sales tax rate is conspicuously posted at or near the entrance of any establishment that collects it, and the alleged problem will correct itself.

Or, even better, add the sales tax to the shelf price.

I don't see retailers supporting that being mandated.
---

there are actually more stipulation on local property taxes than I knew,

According to Arkansas Code, there is a limit on the number of mills that can be levied by cities and counties. Cities can levy up to 20 mills of property tax (5 mills for general government, 5 mills for bonded indebtedness, 8 mills for library, and 1 mill each for police and fire pensions). Counties can levy up to 21 mills of property tax (5 mills for general government, 5 mills for bonded indebtedness, 8 mills for library, and 3 mills for roads).

Amendment 79 (1997) of the Arkansas Constitution provides for property tax relief by limiting the increase in assessed value for property tax purposes as a result of countywide reappraisal and granting a homestead tax credit.

An increase in the assessed value of a homestead is limited to 5 percent for the year following a reappraisal. If the reappraisal results in an increase of more than 5 percent, assessments in subsequent years will be increased by 5 percent per year until the initial reappraisal assessment is reached. For other real property, assessment increases are capped at 10 percent per year and increased in the same fashion as homesteads.

Amendment 79 also freezes the assessed value of a homestead owned by a disabled person or a person 65 years of age or older. Finally, the state of Arkansas allows for an annual state credit up to $350 against the property tax on a homestead. This homestead tax credit may not exceed the total property tax on the property (UAEX Public Policy Center 2014).

Arkansas does not have many property tax incentives for economic development, but it does use tax increment finance (TIF) and payments in lieu of property taxes (PILOTs) when local governments issue industrial facilities bonds to attract industry that is building on government-owned property
---