No.
While the Phoenix City Council approved a 0.5% increase in Transaction Privilege Tax and Use Tax rates — commonly known as sales tax — on certain business categories in March 2025, Phoenix passed a larger (1%) hike in 1976, according to a city spokesperson.
The latest increase, to 2.8% for affected transactions, will take effect July 1, 2025. It aims to make up for recent losses in city general fund revenue that are expected to result in a budget deficit of $39 million next fiscal year. Arizona law requires Phoenix to pass a balanced budget, so the council needed to increase revenue or decrease expenditures to address the projected shortfall.
City officials linked the deficit to two recent state laws. One eliminated residential rental taxes, while the other replaced the progressive state income tax with a flat rate.
This fact brief is responsive to conversations such as this one.
The Arizona Center for Investigative Reporting partners with Gigafact to produce fact briefs, or quick-response fact checks, about trending claims relating to Arizona.
Sources
- Arizona Department of Revenue, Rate and Code Updates
- City of Phoenix, Correspondence with AZCIR
- City of Phoenix, Correspondence with AZCIR 2
- Phoenix City Council, March 18, 2025 Meeting Agenda
- Phoenix City Council, March 18, 2025 Meeting Recording
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The Arizona Center for Investigative Reporting is partnering with Gigafact to produce timely fact briefs, or quick-response fact checks, about trending claims relating to Arizona.
