The Regional Transportation Authority projects are each at least partially funded by a transaction privilege tax, or sales tax, that voters approved for this purpose. The 0.5% tax is collected throughout Pima County on items subject to the tax. These categories include:
- Mining
- Utilities
- Communications
- Restaurants and bars
- Amusements
- Commercial leases
- Personal property rental (such as car leases)
- Prime contracting activities (taxes on goods used for construction)
- Retail sales
- Transient lodging (hotels and other short-term rentals)
- MRRA: Marketplace facilitated or remote retail sales (online shopping)
In the 15 years of the RTA tax revenue collection, retail, restaurants and bars, utilities and contracting have typically provided the largest share of the funds collected. Retail sales tax collections alone consistently make up more than half of the RTA’s annual revenue.
The state collects the taxes from businesses, and then distributes it to taxing entities such as the RTA. Typically, the RTA receives its tax revenue two months after a person pays that tax at the point of purchase.
The RTA uses projected tax collection estimates to anticipate how much funding it will have available each year, and sets a budget for expenditures based on the voter-approved project schedule of projects. It sets money aside for the planned upcoming projects, but it has some leeway in when it uses the funding, depending on when the projects are ready for construction, for example.