Since 1987, Arizona has had the Model City Tax Code (MCTC). The code's twin goals are to encourage uniformity of local taxes, which benefits businesses, while still respecting each city and town's right to determine its tax code.  

Crafting the MCTC involved politicians and government employees, as well as tax professionals and business leaders. Each of these groups has a vested interest in local taxes, and Arizona wanted to ensure all of them had a voice in crafting the MCTC.  

As of 2024, the Arizona Department of Revenue maintains the official MCTC. The code isn't static, and revisions have been ongoing. Municipal Tax Code Commission (MTCC) approves changes to the MCTC and handles all disputes related to the code. 

Uniformity and Local Control 

Prior to the MCTC's passage in the 1980s, businesses complained about the difficulty in complying with each city or town's local taxes. The MCTC was intended to help businesses know what items each city and town taxes as well as what items are tax-exempt. 

Balanced against business concerns was local autonomy. Local governments are responsible for setting their taxes. This is why participation in the MCTC isn't mandatory, but it does provide cities and towns in Arizona with a uniform base for sales and use taxes.  

Cities and towns choose which parts of the MCTC to use. They can add additional taxes or requirements. They decide what items are tax-exempt. 

Each town or city has its own challenges and conditions. A tax code that works in Scottsdale, for example, may not work in Prescott. Ideally, the MCTC encourages uniformity in local taxes while also recognizing the individual and unique nature of each locality. 

As of 2024, the official MCTC is available online. Information publicly available includes: 

These charts and tables make it easier for businesses and consumers to learn about each locality's tax rates. Flagstaff, for example, has a hospitality tax of 4.281 percent compared to Kingman's 2.5 percent rate. 

If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.