On Monday, attorneys with the Goldwater Institute, on behalf of Pinal County taxpayers, called on an Arizona judge to issue an order barring the county from collecting a transportation excise tax now scheduled to go into effect in April. In November 2017, Pinal County adopted a new “transportation excise tax,” passed as Proposition 417, which has been described as a misleading ballot proposal.
The Goldwater Institute is representing local citizens and small businesses.
Related article: Goldwater Institute Sues Pinal County For Illegal Sales Tax
“This tax law was badly designed to begin with, but the county has now changed it dramatically,” said Timothy Sandefur, vice president for litigation at the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation, who is litigating the case. “Voters approved a tax on retail sales, but now the county has changed the law so that all sorts of things — everything from jet fuel to restaurants — are now subject to the tax. That’s illegal.”
The motion comes on the heels of a Thursday meeting at which county officials approved a new resolution asking the state Department of Revenue to collect the tax on a variety of different businesses, which does not track the language of Proposition 417, Sandefur explained. “The county’s changing the law after the election. They’re not allowed to do that.”
The county’s move also contradicts the legal position taken by the Department of Revenue, which told the court in its briefs that the tax applies only to retail sales. The county’s new announcement that it also applies to other kinds of businesses puts it at odds with state tax officials. And it causes considerable confusion over what businesses are subject to the tax and what are not.
“We’re asking the court to halt this tax from being applied until the judge can decide the case,” Sandefur said. “This tax law is so badly designed, and so confusing, that it’s crucial for the court to put things on hold until it figures this law out.”