PHOENIX 鈥 The question of whether those with hearing impairments get tax relief could depend on whether lawmakers are willing to consider eliminating other tax breaks.
Several members of the Senate Finance Committee indicated during a hearing Wednesday they are sympathetic to pleas by the Arizona Commission for the Deaf and Hard of Hearing to exempt the batteries used in hearing aids from the state鈥檚 5.6 percent sales tax.
Prices vary widely, with retailers charging anywhere from less than $3 for a six pack to more than $10. But the number of batteries bought clearly adds up: The Department of Revenue figures the state collects an estimated $1 million a year from battery taxes.
Sen. Steve Farley, D-Tucson, said the exemption may make sense.
He said, though, the state can鈥檛 afford the loss. So Farley wants to make the legislation contingent on ending two other tax breaks, both of which benefit those who don鈥檛 even live in Arizona.
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But his proposal could end up scrapped, not because of its merits but because of politics: The Republican sponsor of the legislation is not interested in giving a victory to someone hoping to oust incumbent Gov. Doug Ducey in this year鈥檚 election.
In general, Arizona law exempts medical devices from sales taxes. That includes hearing aids themselves and any parts like ear molds.
Batteries, however, are in a different category. SB 1049 would end the difference.
That鈥檚 fine with Farley 鈥 as long as the state finds a way of making up that $1 million.
One fairly complex break he proposes to eliminate deals with taxing the cost of processing things like natural gas, sand and gravel. He said it costs the state $836,000.
Farley also is taking aim at a much simpler 鈥 and more recent 鈥 exemption pushed into law two years ago at the behest of dealers of expensive art hoping to boost sales to tourists.
In essence, the law says if you鈥檙e an Arizona resident who buys art at a gallery, you pay the state tax. But if you live somewhere else and have it shipped out of state, there鈥檚 no tax.
That exemption reduces state taxes by $211,000 a year.
鈥淲henever we put forward another exemption from the sales tax, another loophole, no matter how worthy, we need to discuss which other ones we鈥檙e going to get rid of so we鈥檙e at least revenue neutral,鈥 Farley said.
The Department of Revenue says if Arizona taxed every transaction, the state would collect another $13.5 billion a year. That dwarfs the $4.5 billion actually collected last year in sales taxes.
Farley said lawmakers should not just keep adding to that list, even with just a $1 million price tag.
鈥淲e can鈥檛 keep digging the hole that we鈥檝e found ourselves in,鈥 he said. Farley said SB 1049 gives lawmakers a chance to decide if some of the existing tax breaks make sense.
Sen. Karen Fann, R-Prescott, said she appreciates what Farley is trying to address.
鈥淲e know we don鈥檛 have enough money for our highways,鈥 she said.
鈥淲e know we don鈥檛 have enough money for our schools,鈥 Fann continued. 鈥淎ll schools need better funding.鈥
鈥淚 think his concept is logical,鈥 said Sen. David Farnsworth, R-Mesa, who is both the sponsor of the measure and chairman of the Finance Committee. 鈥淚 don鈥檛 disagree with his theory.鈥
But Farnsworth said he鈥檚 not interested in linking the tax break on hearing aid batteries to a discussion of the other exemptions.
鈥淚 think we ought to stick to the subject,鈥 he said. 鈥淚t kind of complicates our bill.鈥
And there鈥檚 something else: Farley hopes to be the Democrat nominee for governor and go up against Republican incumbent Ducey in November. 鈥淚 don鈥檛 want to give him any support against a governor I prefer,鈥 Farnsworth said.
The measure is set for a committee vote next week.
On Twitter: @azcapmedia
