Phoenix residents will notice a slight savings in their grocery store bills beginning this month as the city’s “emergency food tax” finally sunsets, effective April 1.
The five-year temporary food tax, on sales of food for home consumption, was adopted by the Phoenix City Council on Feb. 2, 2010, amidst a projected $277 million revenue shortfall in the General Fund for the remainder of the 2009-10 and 2010-11 fiscal years. Many residents complained it was rushed into the budget without much public input. It went into effect on April 1, 2010.
The total amount of annual revenue from the food sales tax was estimated to be $50 million, with about $30 million going to the General Fund. The rest of the projected revenue shortfall was addressed though extensive service cuts, financial transactions, and innovation and efficiency measures, which at the time totaled over $139 million and included the elimination of more than 1,300 positions across all General Fund departments.
On Oct.16, 2013, the Phoenix City Council approved an ordinance to amend the City of Phoenix Tax Code to reduce the emergency food tax from 2 percent to 1 percent, effective Jan. 1, 2014, with a complete elimination of the tax upon its sunset date of April 1, 2015.
In Maricopa County, Phoenix and 22 of the other 24 cities taxed sales of food for home consumption. Phoenix was the only city with a temporary sales tax on food. Phoenix previously had a sales tax on food until 1981.