Is Tombstone getting all it needs from the state tax dough?

Maybe not.

In the state of Arizona, taxes must be paid by businesses in order to make transactions. Any company that sells a product within the state must file for a permit to do so and pay a percentage of the sales to the state for the privilege of doing business.

This tax, known as the state transaction privilege and severance tax, generates a substantial amount of money for Arizona. Much like the income tax familiar to the entire working force of the country, a portion of the funds is given back to the payer—25 percent of the shared portion going right back to the cities, according to the Arizona Department of Revenue.

Other cities in Arizona, however, get a completely different amount of their transaction privilege tax back from the state. Cities with comparable populations and economic structures, namely tourist towns, get more funding than Tombstone.

Miami, Ariz., an old copper mining boomtown turned tourist destination with 1,955 residents in Gila County, has numbers that tell a different story. The city’s businesses generated $326,834 for the state and received $143,468 back, showing a 43.9 percent return on the taxes paid. Though Miami has a similar economic makeup as Tombstone, with its majority based on tourism, retail sales and accommodation, the state gives back almost half of the funds generated by the tax.

An even more extreme example can be seen in Mammoth, Arizona, a town with a population of 1,762 and has an economy based on both mining and tourism. The businesses generated a significantly smaller amount of revenue for the state than Tombstone—only $81,639—but received a greater amount—$129,305. This equates to 152.39 percent returned to the city’s businesses.

“We do not determine the amount the state gives back,” said Thanh Nguyen with the Arizona Department of Revenue. “That’s up to the cities.”

Other cities in Arizona are in a similar situation as Tombstone. Gila Bend, an agriculture and tourist town of 1,980 citizens in Maricopa County, for instance, receives a little less than Tombstone does from the return of the transaction privilege tax. The town generates $1,070,459 and gets $145,303 back from the state, meaning it only receives 13.57 percent from Arizona.

Steve Troncale, a Tombstone councilmember, said that didn’t sound correct. “State statute determines how much, and I know a big portion of it is based on population.”

The average for cities in Arizona with a similar population as Tombstone, within more or less than 500 citizens, is a 68.64 percent return from the state for the funds generated by the transaction privilege tax. While Tombstone gets $17 back for every $100 it gives, Arizona gives almost $69 for every $100 it takes on average from cities with a population between 1,100 and 2,100.

According to Tronacle, he does not know the details of how it is determined and that would best be left up to City Clerk/Manager George Barnes. Barnes, however, was unavailable for comment.