HB 2509 Summary

• Creates two new tax classifications: "Retail Food Classification" taxed at 1% on grocery stores and food retailers, and "Business and Personal Services Classification" taxed at 1% on services not otherwise classified.

• Eliminates the existing "Restaurant Classification" and repeals Article 3 of Chapter 5, consolidating food-related taxes into the new retail food classification with specific exemptions for prepared foods and on-premises consumption.

• Reduces the prime contracting classification tax base from 100% to 65% of gross proceeds of sales or gross income.

• Restructures numerous tax deductions and exemptions across retail, telecommunications, personal property rental, mining, and prime contracting classifications by renumbering and reorganizing existing provisions.

• Requires two-thirds affirmative vote in both legislative houses for enactment per Arizona Constitution Article IX, Section 22.