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Gilbert raises sales taxes. Here’s when it will go into effect – Arizona Republic

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Gilbert raised sales tax rates for the first time in 24 years after the City Council approved the proposal, with Mayor Brigette Peterson the lone dissenting vote Tuesday.

City officials said sales and bed tax rates must be increased to raise more than $700 million to pay for “key” infrastructure. The rate increase will add $55 million to Gilbert’s annual revenue. The revenue collected from the bed tax is limited to tourism-related purposes.

The rate increase will help pay for numerous city projects, including park expansions, fire station remodeling and new police facilities.

The council approved a 0.5 percent sales tax and a 2.2 percent bed tax increase to current rates. Adding 0.5% to the sales tax would bring that tax to 2%, putting Gilbert in line with Mesa’s rates but below rates in Glendale, Goodyear and Phoenix.

Gilbert also introduced a 2 percent use tax on online purchases by companies that make less than $100,000 in sales in Arizona annually.

The increases are effective from January 1.

According to the city, the total impact of every $100 spent is estimated to be about 50 cents.

Unlike most other cities in the Valley, Gilbert does not need voter approval to raise taxes because it is not a chartered city.

City Manager Patrick Banger said at Tuesday’s council meeting that the city is moving toward construction and will soon shift its focus from the last few investments to long-term maintenance of its infrastructure.

“We’re at a point now with the projects and the investments that need to be made that we’ve exhausted all options and now we need to look at funding opportunities to move these things forward,” Banger told the council.

Peterson said the proposed projects are out of control and not in the order she would like the city to tackle them. With residents struggling with inflation, she can’t support the sales tax increase, she added.

The majority of the council expressed similar views on the tax increase rates. They said it’s fairer to have both local and valley-wide residents pay the rates, and increasing sales tax rates is a better option than enacting a primary property tax.

“Unfortunately, it is necessary at this time. It pains me to support this, but I have to support it at this time,” said Council Member Jim Torgeson.

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