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Taxes Analysis in the State of Arizona

Taxes

Table 1: Displays Various Taxes, Where Funds Are Used And Government Body Responsible For Rates.

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Tax Funds Governmental Body Responsible for Rate of Taxation
Arizona State Sales Tax The funds add to the revenue collected by the state, which is then used to run government projects and public services. State of Arizona
Phoenix City Sales Tax The funds contribute to the overall revenue collected by the city, which assists Public services around the city. State of Arizona
Maricopa County Sales Tax The sales fund is used to finance county projects such as construction and maintenance of highways and streets, health, welfare, sanitation, and education. State of Arizona
School District Property Tax The amount collected is used to fund local expenditures such as education in public schools. Arizona State and Federal government
School District Property Tax (Bonds/Overrides): The tax collected is used to fund education in schools within the District. Arizona State and Federal government
County Property Tax Public schools and government State of Arizona
Arizona State Income Tax It is used to fund major operations in the state like healthcare, labor, agriculture, veteran benefits, and many more. State of Arizona

Sales Tax

Total sales tax paid: $0.77

A sales tax is charged at the time of buying specific goods and services. Based on the provided sales tax receipt for a purchase in Phoenix, Maricopa County, the total sales tax that has been paid for the purchase of the two pieces of jewelry is $0.77.

Amount of sales tax assessed by the State of Arizona: $0.5

The state of Arizona’s sales tax rate is currently at 5.60%. This means that the state gets 5.60% of the total sales tax paid (Arizona Department of Revenue, 2021). Based on this, the amount of sales tax accessed by the state is (5.6% x 0.77) / 8.6% = $0.5

Amount of sales tax assessed by the City of Phoenix: $0.21

The City of Phoenix’s sales tax rate is currently at 2.30%. This means that Phoenix gets 2.30% of the total sales tax paid (Arizona Department of Revenue, 2021). In regards to this, the amount of sales tax accessed by the city is (2.3% x 0.77) / 8.6% = $0.21

Amount of sales tax assessed by Maricopa County: $0.06

Maricopa County’s sales tax rate is currently at 0.70%. It means that the county gets 0.70% of the total sales tax paid (Arizona Department of Revenue, 2021). In this case, the amount of tax accessed by the country is (0.70% x 0.77) / 8.6% = $0.06.

Payroll Statement Review

A payroll statement, also known as earning statement, contains details of the salaries and wages paid out to employees of an organization for a given period of time (Jones, 2016). Based on the payment statement provided, the employee gets a basic income of $1200.00 and net pay of $934.10 after a deduction of $265.90. From the statement, the current amount of tax collected by the state of Arizona is $24.00. On the other hand, the year-to-date amount of tax collected by the state of Arizona is $72. The state income tax is levied on an individual’s income, while a state sales tax is levied on the goods purchased by an individual.

In addition, Arizona’s state income tax is 2% of an individual income based on the payroll statement, while Arizona’s sales tax is 8.6% of the total amount of goods purchased (Arizona Department of Revenue, 2021). This indicates that both taxes increases with an increase in the amount involved. In my view, I do not like the fact that Arizona’s income tax is increasing with an increase in an individual’s level of income. An individual who earns more is likely to pay more income tax. This might discourage people from working hard to earn more income in an organization. For Arizona’s sales tax, I think a rate of 8.6% is reasonable on some products like jewelry. Essential products such as foodstuffs should not be taxed to ensure that everyone can purchase them when needed.

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Utility Bill Review

Based on the sample utility bill provided “water usage bill,” the total amount of tax paid by the customer is $4.27. As shown in the utility bill, the taxes included in the bill are City Services Tax charged at $1.50, City Sales Tax is charged at $0.97, and state and other taxes levied at $1.80. On the other hand, the total amount of fees paid by the customer is $68.09. A tax is a compulsory payment made to the government without getting any direct benefits, while a fee is a voluntary payment made by an individual to get a particular service (Jones, 2016). Therefore, a tax is mandatory while a fee is voluntary to an individual or organization.

The sample utility company is responsible for determining if the utility fees may be increased or not. This is because the company deals with important operations like repairs and maintenance to ensure that customers effectively get the services they require. The company must also remain up to date with the increasing cost of living experienced when the prices of equipment used to make sure that customers get the services increases. The additional cost is transferred to the customers who end up paying more fees to get the services.

References

Arizona Department of Revenue. (2021). Understanding Use Tax. Arizona Government. Web.

Jones, A. T. (2016). Mileage tax, property tax, sales tax, or fee: the best way to pay for commercial infrastructure that is not free. Review of Regional Research, 36(1), 81-98.

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StudyCorgi. (2022) 'Taxes Analysis in the State of Arizona'. 15 July.

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