State offers details on refund of $80M in transportation taxes

The Arizona Department of Revenue said Wednesday it is working toward a solution to refund the tens of millions of dollars in transportation taxes paid by Pinal County residents for more than four years.

On March 8, the Arizona Supreme Court invalidated the county’s two-tiered transportation tax. About $80 million – plus interest – will be refunded to claimants.

The transportation excise tax was the linchpin for funding projects crucial to Maricopa including the widening and improvement of State Route 347 and the Sonoran Desert Parkway – two primary projects designed to improve ingress and egress from the city.

The ruling could effectively cut off a significant source of funding for those traffic improvements.

“ADOR is aware that taxpayers have questions about what actions they should take to seek a refund of monies paid since April 1, 2018,” the agency said in a news release.

ADOR, which said it seeks a process to allow taxpayers to “easily request” payments, shared a few details about its plan:

• Taxpayers will be able to submit electronic requests for monies paid toward the invalidated tax while it was in effect (i.e., April 2018 through March 2022 transaction privilege tax filing periods). The requests will allow taxpayers to indicate whether they wish to opt in or opt out of receiving these monies. For those who opt in, the state is on the hook to pay interest on the tax as well.

• ADOR will process electronic requests for the invalidated tax separately from standard transaction privilege tax refund requests. As such, to avoid delays and errors in handling, please do not attempt to submit requests for the invalidated tax using such methods.

• Taxpayers will be able to request all monies paid since the April 1, 2018 effective date of the invalidated tax. Under current law, ADOR anticipates that taxpayers will have until April 9, 2026 to submit their electronic requests.

• Taxpayers should not attempt to amend their filings for these periods to self-correct for reporting and paying the invalidated tax. Such actions will likely result in unanticipated and unwanted consequences for both ADOR and taxpayers.

The agency suggested following AZDOR.gov for the latest news and updates on this process as they become available.