Sales Tax for the State of Arizona - Essay Example

Taxation in Arizona USA Like many other s within the US, Arizona obtains revenue from taxation. Revenue collection with every state is very significant especially in respect to providing public goods, services and amenities. It is from the revenue collected through taxation that the state of Arizona uses to provide all the required public goods and services. There are different types of taxes employed within the State of Arizona in order to collect revenue. Such taxes include income, sales, and property taxes (Fso.arizona.edu).

On the other hand, the State of Arizona uses revenue obtained from nontax income such as fees and charge as well as lotteries amongst others. Every tax component of type applied within the state of Arizona in obtaining the required revenue has specific properties such as yield equity, economic neutrality, collection, costs, as well as transparency (Fso.arizona.edu). The following discussion establishes how the State of Arizona ensures that every component of the tax aforementioned fulfils the canons of taxations as listed above.

Income tax Income tax is revenue collected by organizations or institutions concerned from employed persons. Income tax within the state of Arizona is progressive. This means a person will pay taxes depending on the amount of income (Fso.arizona.edu). An individual earning higher income is definitely going to pay higher amounts in form of taxes. From this perspective, it is clear that the canon of equity, yield, economic neutrality, and collection costs coupled with transparency are adhered to as per the requirements of taxation regulations and rules.

For instance, the canon of convenience is attained when various employers deduct income tax directly from the gross salaries of their employees. In this case, the employee will receive net income after deduction of income taxes (Salanie 32). On the other hand, deducting income tax from the employer is a sure way of ensuring that the revenue will be obtained within the State of Arizona thereby abiding by the principle or canon of collection costs and certainty. Transparency in collecting the income tax is attained through ensuring that every employee obtains a document giving how taxes have been deducted (Stiglitz 19).

Income taxes from non-individuals such as corporations also submit their taxation reports so as to comply with all the principles of taxation within the state of Arizona. When individuals or corporations sell or transfer their property of assets, the capital gains obtained is considered as income and charged a given rate of taxes. However, there are exemptions such as incorporation and entrepreneur reliefs provided by the State of Arizona in the event that sales or transfer of assets have yielded some capital gains.

Sales Tax Arizona State charges sales tax at 6.6% but all the fifteen counties usually levy additional taxes with respect to their budget. For instance, Maricopa County usually charges an additional 0.7% making the total sales tax to be 7.3% (Fso.arizona.edu). All the sales tax adhere to the canon of equity where individuals are expected to pay taxes on their ability. For instance, the higher the amount of goods bought by an individual then the higher the tax. In this regards, organizations or business entities that make huge sales are likely to pay more taxes that those that make small sales (Salanie 51).

In addition, the state’s sales tax ensures that the principles of yield, certainty and convenience are adhered to as per the requirements of the taxation laws. Sales tax within the state of Arizona ensures that every individual or organizations paying taxes are known hence making it certain and not arbitrary in the collection of taxes. What’s more, there is high level of transparency in the collection of the sales tax within the state. Property Tax Other than income and sales tax, the State of Arizona derives some of its incomes from levying taxes on different forms of property that individuals and organizations held within the state.

Arizona State charges tax on property for owner-occupied residential real property. Nonetheless, there are several classes of properties under this divisions with each having specific rate. Since owning a residential property widely depends on the individual ability to buy the property, it therefore follows that the idea of equity and yield will be met as per the principles of taxation (Stiglitz 23). For instance, a person with a bigger residential property is likely to pay higher taxes affirming that property taxes within the state follow the idea of equality where individuals pay what they afford (Salanie 67).

On various exemptions under property taxes, the State of Arizona ensures that such credits, exemptions, exclusions, deductions, as well as tax margins follow the concept of the cannons of taxation. The cannon of transparency is meant when all the rates of property taxes are publicly published in order to ensure that there is adequate information to every individual in as far as payment of property taxes are concerned. Works Cited Fso.arizona.edu. AZ State Sales and use tax facts, July 2010. Web.

Retrieved on March 5, 2012 from http://www.fso.arizona.edu/tax/AZ_Sales_and_%20Use_Tax_Facts.pdf Salanie, Bernard. The Economics of Taxation. Hayward Street Cambridge, MA: MIT Press, 2003. Print. Stiglitz, Joseph. Economics of the Public Sector, 3rd ed. New York and London: Norton, 2000. Print.