Navajo Nation Sales Tax Increase

By Brian Greer on Thu, Jun 21, 2018 @ 07:47 AM

Topics: sales tax news

The Navajo Nation—mostly found in northeastern Arizona, stretching just into southern Utah and western New Mexico—is set to increase its sales tax from 5% to 6% starting July 1st, 2018.  This is the first general sales tax rate change for the Navajo Nation in five years, and is being enacted to increase funding for their Department of Fire and Rescue Services. 

Navajo weaving

Areas such as the Navajo Nation have tribal sovereignty; for tax purposes, this means their sales tax laws are separate from the states within which they reside.  The new 6% rate is higher than that of all three states where the Nation is found: Arizona (5.6%), New Mexico (5.125%), and Utah (4.7%).  The effective sales tax in certain areas of those states can be higher due to local sales taxes, such as Maricopa County in Arizona and Salt Lake City in Utah, but the sales taxes being paid near the Nation will largely be less than the Nation's come July 1st.

It should be noted that gas sales taxes remain lower in the Navajo Nation than any of those three states, at 18 cents per gallon versus 18.88 (New Mexico), 19 (Arizona), and 29.41 (Utah).

The Navajo Nation also levies a special tax on junk food.  This is a 2% tax added to the general sales tax.  This applies to the following items:

  • Most types of sweetened beverage.
  • Snacks considered low in essential nutrients and high in salt, fat, and sugar.  Both prepackaged and non-prepackaged snacks are affected.

Residents of the Navajo Nation, all surrounding states, and curious visitors can find more information on this and other Navajo tax law at the Navajo Tax Commission website.

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Brian Greer

Written by Brian Greer