COTTONWOOD -- Implementation of a Cottonwood use tax has hit another delay.
In a 4-3 vote Tuesday, Cottonwood City Council decided to table a Notice of Intent to adopt a use tax citing concerns of cost to citizens as well as wanting the new council to have a say in the decision.
Cottonwood Mayor Tim Elinski was the swing-vote in the decision, siding with council members Tosca Henry, Deb Althouse and Ruben Jauregui. Vice Mayor Kyla Allen and outgoing council members Karen Pfiefer and Linda Norman were the nay-sayers.
Elinski said he wasn’t necessarily opposed to a use tax but is concerned about piecemealing increases.
“I was hoping we would take a broader, more holistic look at what taxes we were going to raise and reasons for that,” he said.
Henry said she is concerned that the city is making things incrementally more expensive for residents.
“We want to make sure we are protecting our local businesses but it’s at the expense of our local residents,” she said. “I just can’t support that.”
According to Cottonwood Deputy City Manager Rudy Rodriguez, the use tax does not affect all consumers.
“People believe it’s an additional tax – it’s not,” he said.
Rather, it’s about “leveling the playing field” between those local and businesses outside Cottonwood city limits, he said.
Sedona and Camp Verde currently levy a use tax, according to staff documents. In Sedona the use tax is 3 percent, in Camp Verde, 3.65 percent. The state also collects a 5.6 percent use tax.
In an email to the Verde Independent Rodriguez said a use tax is different from a sales tax in that it requires individuals to self-report when they purchase items. Especially big ticket items, like cars.
For example, a vehicle purchased from an out of state car dealer with no local sales tax by someone who registers their car in Cottonwood would be subject to a Cottonwood use tax, if implemented.
Because Cottonwood doesn’t have a use tax, car dealerships outside Cottonwood city limits have advertised “no sales tax.” He said this hurts local businesses in Cottonwood.
But Althouse said she didn’t blame people for not want to pay a use tax.
“Now that we’ve raised a sales tax, I don’t blame people,” she said. “Everyone wants to save as much money as they can and have as much money in their pockets instead of giving it to the city.”