Rep. Debbie Lesko [Howard Fischer/Capitol Media Services]

Howard Fischer/Capitol Media Services

The state House voted Thursday to give manufacturers and smelters a break from the sales taxes paid on electricity by everyone else. And now it also includes natural gas.

SB 1413 was originally sought by Gov. Jan Brewer. Her aides said Arizona is one of only a few states which force manufacturers to pay sales taxes on the power they purchase, putting Arizona at a competitive disadvantage.

The estimated loss of revenues to the state is about $10 million.

That tax break, which already has been approved by the Senate, got the attention of natural gas producers. So they got Rep. Debbie Lesko, R-Peoria, to exempt their sales from the state tax, too, adding about $700,000 to the price tag.

Cities can decide on their own whether to continue their own levy.

Rep. Brenda Barton, R-Payson, objected to the concept because, unlike cities, there is no similar opt-out for counties. She said small counties, which already have a small property tax base, cannot afford the loss of revenues.

“I understand economic growth,” Barton said, as well as incentives to lure firms here.

“But when they get to the state of Arizona, they come here with full knowledge of how the state is structured,” she said. “And if we're going to be able to provide services to our constituency, we still have to maintain some level of revenue.”

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