Dimensions of Sales Tax Exemption Policy: The Arizona Model

Hager Mark A. () and McArdle Susanne ()
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Hager Mark A.: School of Community Resources & Development, Arizona State University, 411 N. Central Avenue, Suite 550, Phoenix, USA
McArdle Susanne: Boys Hope Girls Hope of Arizona, 3443 North Central Avenue, Suite 713, Phoenix, AZ 85012, USA

Nonprofit Policy Forum, 2015, vol. 6, issue 1, 45-57

Abstract: State exemption of qualified nonprofit organizations from paying sales taxes on certain purchases is one tool by which government encourages private development and delivery of public goods. We review Arizona’s “transaction privilege” exemption for health nonprofits through review of statutes, interviews with state officials, interviews with nonprofits that seek and make use of the exemption, and secret shopping with Arizona businesses to see how they react to requests for tax-exempt purchases. We conclude that public data is inadequate for a full policy evaluation and that current exemption procedures include imprecision regarding which nonprofits qualify for the benefit. Nonetheless, given the policy goal of advancing public goods, we suggest that the exemption might fruitfully be extended to other categories of qualified nonprofits.

Keywords: sales tax exemption; nonprofit organizations; Arizona (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/npf-2013-0012

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