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HCR 2021

food; municipal tax; exemption

57th Legislature - First Regular Session Introduced by Cesar Aguilar and 20 co-sponsors

Limits and requires voter approval for any municipal tax on home‑consumption food, with rate caps and a 2027 effective date.

Transmit to Secretary of State
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Bill Summary · HCR 2021

Summary — HCR 2021 (2025) — food; municipal tax; exemption

Status: Concurrent resolution submitted to the Secretary of State (filed with the Secretary of State June 23, 2025). If approved by voters at the next general election and proclaimed by the Governor, this measure amends Arizona Revised Statutes § 42-6015.

Main purpose

To change how municipalities may tax food sold for home consumption and to place limits and voter-approval requirements on municipal transaction privilege (sales-type) taxes on food. The measure also provides certain exemptions and makes the act retroactive to December 31, 2024.

Key provisions

  • Amends ARS § 42-6015 (municipal transaction privilege tax; food exemption).
  • Home-consumption food
    • Beginning July 1, 2027, cities/towns may not levy a transaction privilege/sales/use/franchise or similar tax on the sale of food for home consumption unless they comply with the new requirements in Subsection C.
    • Until that date, municipalities may apply such taxes but must apply them uniformly to all food items (no item-specific differentials).
  • On-premises food
    • Sales of food intended for consumption on the premises must be taxed uniformly (no item-specific differentials).
  • Protections/exemptions (existing and retained)
    • Manufacture/wholesale/distribution to wholesalers, distributors or retailers is excluded from such local taxes.
    • Containers/packaging used exclusively for transporting/protecting/consuming food are excluded.
    • Purchases made with USDA food stamps (SNAP) or certain child nutrition instruments are exempt.
    • Low/reduced-cost sales to eligible elderly, homeless persons or persons with disabilities made through specified SNAP-approved contracts are exempt.
  • New voter-approval and rate-limit rules (Subsection C)
    • Applies to any municipal tax on home-consumption food under A(1).
    • For jurisdictions that had approved such a municipal tax by January 1, 2025:
    • If the existing rate is less than 2% of the tax base, any increase must be approved by local voters and may not exceed 2% of the tax base.
    • If the existing rate is already 2% or more, the jurisdiction may not increase the rate.
    • No increase may occur in the 24-month period immediately preceding June 30, 2027.
    • For jurisdictions that had not approved such a tax by January 1, 2025:
    • Adoption or any future increase must be approved by local voters and may not exceed 2% of the tax base.
    • Adoption or increase may not occur in the 24-month period preceding June 30, 2027.
  • Retroactivity: the act applies retroactively to from and after December 31, 2024.

Who is affected

  • Cities, towns and other municipal taxing jurisdictions: limits their authority to tax groceries sold for home consumption, restricts increases, and requires voter approval in specified cases.
  • Local voters: required to approve new municipal grocery taxes or increases in many circumstances.
  • Consumers: could see reduced local taxation on groceries sold for home consumption (depending on future local actions).
  • Municipal budgets: potential limiting effect on sales-tax revenue from food sales; may require municipalities to seek voter approval for revenue actions.

Procedural/timeline notes

  • The resolution is a citizen-submitted/legislative-submitted measure to be placed on the ballot — it must be approved by voters at the next general election to become law.
  • Passed both chambers (House March 4, 2025; Senate June 20, 2025) and transmitted to the Secretary of State on June 23, 2025.
  • Important dates in the measure:
    • Retroactivity date: December 31, 2024.
    • Effective limitation date for home-consumption tax restrictions: from and after June 30, 2027.
    • Jan 1, 2025 is the cutoff used to distinguish jurisdictions that previously had approved municipal food taxes from those that had not.

Compiled from official sources — confirm details with the bill’s official record.

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