RTA tax appealed to Arizona Supreme Court

Maricopa and Pinal County are heading to Arizona Supreme Court.

Thursday, attorneys from the Goldwater Institute filed an appeal of a Court of Appeals ruling that favored the county’s regional transportation authority. The case, Vangilder, et al. v. Pinal County, et al., challenges Prop 417, a funding mechanism for a plan to improve Pinal County roadways.

Prop 417 was approved by Pinal County voters in November 2017. State Route 347 is among roadways on the improvement plan that was approved by voters in Prop 416 on the same ballot.

During the campaign, The Goldwater Institute, a conservative thinktank, had challenged the legal validity of Prop 417’s ballot wording. After its passage, the institute filed suit to stop its implementation.

Despite the lawsuit, with the approval of the courts, the RTA has been collecting the tax since April 2018. According to Pinal County records, the account holds $33.4 million as of the end of February.

Arizona Tax Court agreed with Goldwater in ruling that Prop 417 was “an unconstitutional special law” that exceeded county authority. The appellate court, however, overturned that decision in January, finding the tax to be valid.

The Court of Appeals judges felt the Goldwater attorneys were wrong on some facts of the case. They also stated Braden v. Yuma County Board of Supervisors, which Goldwater tried to cite as precedence, did not apply to the Pinal County case.

The case involves 12 law offices, from the Arizona Attorney General’s Office to private law firms representing friends of the court.

Pinal County, the RTA and Arizona Department of Revenue are direct defendants in the case. The Pinal Partnership and the municipalities of Maricopa, Coolidge, Queen Creek and Florence are amicus curiae. Arizona Tax Research Association, which had warned Pinal County about its concerns about the ballot issue’s validity months before the 2017 vote, also remains attached as amicus curiae.

Goldwater attorneys had until March 19 to file briefs with the state Supreme Court and filed on the deadline day. The parties now wait to learn if the judges will hear the case.

On the ballot, the question read:

PROPOSITION 417 (November 2017)
(Relating to County Transportation Excise (Sales) Taxes)
Do you favor the levy of a transportation excise (sales) tax including at a rate equal to one-half percent (0.5%) of the gross income from the business activity upon every person engaging or continuing in the business of selling tangible personal property at 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 (0.5%) 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 (0.0%), in Pinal County for twenty (20) years to provide funding for the transportation elements contained in the Pinal Regional Transportation Plan? Do you favor the levy of a transaction privilege (sales) tax for regional transportation purposes, including at a variable or modified rate, in Pinal County?

YES _____
NO _____

(A “YES” vote has the effect of imposing a transaction privilege (sales) tax in Pinal County, including at a variable or modified rate, for twenty (20) years to provide funding for the transportation projects contained in the Regional Transportation Plan.)

(A “NO” vote has the effect of rejecting the transaction privilege (sales) tax for transportation purposes in Pinal County.)