Harold Vangilder v. ador/pinal County
CV-20-0040-PR
| Ariz. | Mar 8, 2022Background
- Pinal County created a Regional Transportation Authority (RTA) and adopted a 20‑year Regional Transportation Plan in 2017 to be funded by a county transportation excise (TPT) tax.
- The RTA resolution and ballot proposition (Proposition 417) described a “variable or modified” transportation excise tax that applied to TPT classifications and specified a two‑tier retail rule: 0.5% on the first $10,000 of any single retail item and 0% on amounts above $10,000.
- The county prepared and distributed a publicity pamphlet listing each TPT classification and the applicable rates; voters approved both the plan (Prop 416) and the tax (Prop 417).
- Plaintiffs (Vangilder et al.) sued to enjoin collection, arguing the resolution/ballot were deficient and that Arizona law does not permit the two‑tiered retail TPT structure; the trial court invalidated the tax; the court of appeals partially reversed.
- The Arizona Supreme Court held the RTA/Board complied with statutory election and publicity requirements, but that Arizona law does not authorize a two‑tiered retail TPT (first $10,000 taxed, remainder taxed at 0%), so that portion of Prop 417 is invalid; attorney‑fee request denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of resolution/ballot/publicity pamphlet and whether tax applied only to retail sales | Resolution and ballot described a tax only on retail sales, so tax invalid | Resolution met statutory requirement; publicity pamphlet and ballot together showed tax applied to all TPT classifications and included a retail component | Election challenges to resolution waived post‑election; publicity pamphlet + ballot sufficiently informed voters; tax as a countywide transportation excise applies to all TPT classifications (except the two‑tier retail feature) |
| Lawfulness of two‑tiered retail TPT (0.5% on first $10,000 of an item; 0% above) under § 42‑6106(C) ("variable" or "modified" rate) | Two‑tiered structure not authorized by statute and improperly exempts part of the TPT tax base | Structure is a permissible "variable/modified" rate delegated to counties; voters approved it | Two‑tiered retail structure is neither a "modified" nor the kind of "variable" rate authorized; counties lack an express delegation to impose a within‑classification tiered rate — that retail feature is invalid |
| Attorney fees claim under private‑attorney‑general doctrine and A.R.S. § 12‑348(B) | Plaintiffs sought fees | State and county opposed | Court exercised discretion and denied attorney fees |
Key Cases Cited
- Karbal v. Ariz. Dep’t of Revenue, 215 Ariz. 114 (App. 2007) (transaction privilege tax is an excise on the privilege of doing business)
- Tilson v. Mofford, 153 Ariz. 468 (1987) (procedural challenges to pre‑election matters are waived if not raised before the election)
- State v. Burbey, 243 Ariz. 145 (2017) (statutory text governs when unambiguous)
- Ariz. Sash, Door & Glass Co. v. County of Maricopa, 80 Ariz. 100 (1956) (counties possess only expressly or necessarily implied legislative powers; tax authority must be expressly delegated)
- Home Builders Ass’n of Cent. Ariz., Inc. v. Riddel, 109 Ariz. 404 (1973) (taxing power inheres in the legislature)
- Jett v. City of Tucson, 180 Ariz. 115 (1994) (publicity pamphlet requirement is intended to apprise voters of ballot measure purpose and effect)
- Ariz. Dep’t of Revenue v. Action Marine, Inc., 218 Ariz. 141 (2008) (avoid interpretations that render statutory provisions meaningless)