The Arizona Chamber of Commerce filed a lawsuit this week to challenge an initiative scheduled to appear on the 2018 General Election ballot that would nearly double the income tax on small Arizona businesses. The initiative, brought forward by teachers’ unions, also rolls back a law designed to protect Arizonans from inflationary tax increases.
The lawsuit filed in Maricopa County Superior Court seeks to prevent the initiative from appearing on the ballot.
The lawsuit contends that proponents of the income tax increase failed to disclose in the description that accompanied the petition that the initiative repeals an existing law that adjusts tax brackets for inflation, which means that if the initiative were to pass it would result in a tax increase on all Arizona taxpayers in every income bracket.
The complaint also contends that the petition description wildly misstated the actual percentage of the proposed tax increase. The petition stated that income taxes would rise by 3.46 percent or 4.46 percent depending on income, when in reality the increases are 76.21 percent and 98.24 percent.
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The complaint also highlights the proponents’ failure to properly disclose whether petition circulators were paid or were acting as volunteers.
Sheets were marked “paid” or “volunteer” by a third party, not the circulators themselves as required by law.