Dimensions of Sales Tax Exemption Policy: The Arizona Model

Mark A. Hager, Susanne McArdle
  • Nonprofit Policy Forum, January 2015, De Gruyter
  • DOI: 10.1515/npf-2013-0012

Dimensions of Sales Tax Exemption Policy: The Arizona Model

What is it about?

Some states exempt charitable organizations from paying sales tax. In Arizona, the exemption is limited to a specific class of health nonprofits. We find that public data is inadequate for evaluating how well this policy is operating. We urge both clarification of the current policy and extension to other kinds of qualified nonprofit organizations.

Why is it important?

State governments experiment with tax policies that they hope will be helpful to communities, but few of these policies face study or scrutiny. The more we know about how these policies are developed and applied, the more we will be able to develop policies that will work for more people in more places.


Dr Mark A Hager
Arizona State University

Arizona's conservative state government is surprisingly creative in the ways it has shaped tax policies to support different classes of nonprofit organizations. The sales tax exemption is a common policy in many states, and it could fruitfully be extended to more kinds of nonprofits in Arizona.

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