The Arizona Supreme Court may look further at a lawsuit that could impact State Route 347.
This week, the court opted to continue the case of Vangilder et al. v. ADOR/Pinal County et al., which has put funding of road-improvement projects in limbo. Goldwater Institute attorneys filed suit against Pinal County Regional Transportation Authority soon after voters approved Prop 417 three years ago.
Arizona Tax Court ruled against the county RTA and the Department of Revenue, but the Division I Court of Appeals overturned that decision. Goldwater attorney Timothy Sandefur filed his intent to appeal to the Supreme Court in February.
In 2017, Pinal County voters approved Prop 416 and Prop 417 as part of the RTA. Prop 416 approved transportation projects around the county. Prop 417 created a sales tax as the funding mechanism.
As approved, Prop 417 adopted a sales tax rate of 0.5% on retail “provided that such rate shall become a variable or modified rate such that when applied in any case when the gross income from the sale of a single item of tangible personal property exceeds ten thousand dollars ($10,000), the one-half percent (0.005%) tax rate shall apply to the first ten thousand dollars ($10,000), and above ten thousand dollars ($10,000), the measure of tax shall be a rate of zero percent (0%), pursuant to 42-6106, needed to fund the Plan.”
Sandefur argues that applying a zero-percent rate after the first $10,000 is an illegal “carve-out.” The Court of Appeals ruled it was a valid modified rate and not unconstitutional.
Both the tax court and the appellate court have denied Goldwater’s request for attorney fees, which the Supreme Court may review along with the petitions.
Though Harold Vangilder’s name is still attached to the suit, he was removed from the case in 2018 as having no standing. Official plaintiffs are Casa Grande businessman Dan Neidig and the Arizona Restaurant Association.
Defendants are the Arizona Department of Revenue, Pinal County and Pinal County RTA.
The amicus curiae list includes the City of Maricopa, Pinal Partnership, City of Coolidge, Town of Queen Creek, Town of Florence and, siding with Goldwater, the Arizona Tax Research Association and Arizona Free Enterprise Club.