New Phoenix 2% food tax goes into effect

[Source: City of Phoenix] — The Phoenix City Council-approved 2 percent retail sales tax on food for home consumption went into effect today and will sunset in five years.  Prior to the sales tax, prepared foods, alcoholic beverages, and tobacco were the only food items subject to the privilege sales tax.  Food purchased with food stamps will remain exempt.

The ordinance, approved on Feb. 2, amends the city of Phoenix tax code to adopt a Model City Tax Code Option 2, which provides for the taxation of the sale of food for home consumption under the retail- and use-tax business classifications.  The annual food tax revenue will be about $50 million and by implementing the tax in April, $62.5 million will be collected over the next 15 months.

Licensed businesses that engage in retail food sales activity in Phoenix can refer to the instructions on the tax bulletin enclosed in the February and March tax return mailing or clicking here for a copy of the tax bulletin. Businesses not currently licensed in Phoenix can click here for licensing information and to obtain a license application form.

For general information regarding the sales tax, call 602-262-6785, option 6, or send an e-mail.

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