Coconino News

The City of Flagstaff has announced a proposal to amend its tax code, aiming to increase both the local transaction privilege tax and use tax rates. This proposal is set for discussion at a public hearing scheduled for May 6, 2025, at the City Council Chambers in Flagstaff.

As per the announcement, the proposed changes would raise the local transaction privilege tax rate from 2.281% to 2.486%, effective July 1, 2025. This adjustment was approved by voters during the November 5, 2024 general election to support public transit funding. Similarly, the use tax rate is proposed to be increased to match this new rate of 2.486%.

The use tax applies to storage or use of tangible personal property within the city when an equivalent tax has not been paid elsewhere. It functions similarly to the local transaction privilege tax but targets users rather than sellers.

In compliance with A.R.S. § 42-6052(H), these changes are also intended to align with state laws as mandated by the Model City Tax Code adopted by the Municipal Tax Code Commission.

Rick Tadder, Management Services Director, provided contact information for any inquiries regarding these changes: (928) 213-2205.

A report detailing these proposals highlights several extensions and increases related to other taxes as well. The general tax extension and BBB tax extension have been prolonged until June 30, 2043. Additionally, a transit tax increase from .0295% to .0500% will take effect on July 1, 2025, extending until June 30, 2040.

The city projects that adopting the new use tax rate could boost collections from $1,872,500 to $2,040,800 in fiscal year 2025-26. This increase is expected to fund essential services such as public safety and recreation facilities.

For those interested in voicing their opinions or learning more about these proposals, attending the public meetings on May 6 and May 20 would provide an opportunity for engagement.