Scottsdale implements tax exemption for out-of-state art sales

Fine art is sold at several local entities in Scottsdale, including specialty events like the annual Bentley Scottsdale Polo Championships. (file photo)

Art retailers in Scottsdale will see their sales of fine art to out-of-state customers become tax exempt after the City Council approved on consent an appendix in the city’s revised code.

Along with the exemption, the Scottsdale City Council also established a retroactive date of May 30, 2017. This means the exemption applies retroactively to sales going back to this date.

The City Council originally asked for information on requesting a change to the Model City Tax Code, directing city staff to start the process of asking for the exemption. City staff say the addition of the exemption would better align the tax code with state statutes.

Staff submitted a letter with the request on June 16, 2017 and the Arizona League of Cities and Towns decided to make the exemption a local option, leaving the decision up to individual cities.

There was, however, a significant delay in the approval of the option as the Municipal Tax Code Commission had a membership shortage, ensuring the commission couldn’t meet the quorum required for approval.

By the end of 2018, the Arizona League of Cities and Town helped fill the spots until it met the quorum requirements. This led to the addition of the local option garnering approval at the commission’s Dec. 14, 2018 meeting.

City staff anticipates refund requests from the city’s business community. Starting July 1, those requests will go through the Arizona Department of Revenue with processing through a centralized tracking system. Scottsdale will provide audit staff to assist in the process.

City staff say the budget impacts will be minimal as between fiscal year 2012-13 and 2015-16, there was an estimated revenue of $127,000 from the tax.

News Services Reporter Josh Martinez can be contacted at jmartinez@newszap.com or at 623-445-2738

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