The Town Council has asked staff to send a letter to the State Legislature expressing opposition to House Bill 2026, which proposes a sales tax exemption on residential rental properties.

Such a law would cost the Town of Fountain Hills about $158,000 in annual revenue. The bill in its current form, however, would not impact Fountain Hills; it applies only to municipalities with a population greater than 100,000.

Mayor Linda Kavanagh noted that the same law that would have applied to all cities was defeated last legislative session. She said she believes the change applying only to larger cities is an effort to split the support of cities and towns. Kavanagh also believes that once in place the bill would be easier to expand and apply to all.

Town Manager Grady Miller said staff would prepare a letter expressing the concerns of the council.

The council also asked staff to keep an eye on several other bills that have been introduced and monitor other activity.

HB2024 is a bill that would make it illegal for municipal elected officials or employees to enforce federal regulations deemed illegal or unconstitutional by the sovereign state.

Vice Mayor Henry Leger asked Town Attorney Andrew McGuire to clarify this bill. McGuire said that in legal circles the bill is generally viewed as unconstitutional, directly at odds with the principal of checks and balances outlined by the Constitution.

“I really hope there is not a lot of time spent on this,” McGuire said.

Kavanagh also said there is a bill being proposed, but had not been introduced as of the end of last week, in which the fine art industry is asking for privilege tax consideration.

The bill would exempt from sales tax any art purchased locally and then shipped out of state.

Kavanagh said one of the key problems with the bill is its broad and vague definition of “fine art.”

“If this is introduced, we should watch it carefully,” Kavanagh said.