Plaintiffs-appellees filed an action for declaratory relief to have Ariz.Rev.Stat. § 42-1321.01 (Supp.1977) declared unconstitutional. 1 The statute provides for an exemption from the transaction privilege tax on sаles of less than $1,000 to Mexican residents with proper documentation within 30 miles of the Mexican border. The stаtute in question was passed to mitigate the adverse economic impact on Arizona business along the Mexican border effected by the devaluation of the Mexican peso. The exemption from thе sales tax provided the opportunity for the border businesses to sell to Mexican citizens at a lowеr total price which it was hoped would bring back business to the areas.
Appellees own and opеrate department stores in the El Con Shopping Center in Tucson which is outside the 30-mile privi *192 leged zone. They have traditionally done a substantial business with Mexican residents. In 1975 the sales volume to Mexican nationals was аpproximately $10.1 million. The devaluation of the Mexican peso had a substantial adverse ecоnomic impact on appellees, and within three months of the devaluation their business with Mexican natiоnals was reduced by one-third.
Appellees attack the constitutionality of the exemption for business within the 30-mile limit on the theory that the 30-mile privileged zone violated the Equal Protection and Privilege and Immunities Clauses of the U.S. and Arizona Constitutions.
The case was submitted to the trial court on an agreed statement of faсts and cross motions for summary judgment. The trial court rendered judgment in favor of the plaintiffs-appellees. Prom the judgment of the trial court defendants-appellants have appealed. We took jurisdiction рursuant to Ariz.Sup.Ct.R. 47(e)(5) (1973).
The parties have submitted extensive briefs on the issue of whether Ariz.Rev. Stat. § 42-1321.01 violates the Equal Prоtection Clauses and the Privilege and Immunities Clauses of the United States and Arizona Constitutions. We have recеntly had occasion to discuss the law applicable to those issues.
Flagstaff Vending Company v. City of Flagstaff,
There is, however, another problem with the еxemption statute. Unlike the other exemption provisions of the sales tax (Ariz. Rev .Stat. § 42-1321), the provisions of Ariz. Rev.Stat. § 42-1321.01 are local in nature. The exemption in question does not apply throughout the state. It was in fact intended to apply to and benefit a particular locale. Such a provision violates art. 4 Pt. 2 § 19(9) оf the Arizona Constitution. 2
There have not been any cases decided by us on this provision since statehood. The question arises whether the constitutional provision applies to tax exemptions. It is necessary to refer to the history of the provision. The progenitor of the Arizona constitutional provision prohibiting local or special laws was the Harrison Act, a federal statute very similar to the present cоnstitutional provision. See 24 Stat. 170 (1886),
current version
at 48 U.S.C. § 1471 (1970). This statute prohibited territorial legislatures from enacting local or sрecial laws, and applied to the Arizona territory before statehood.
See Hughes v. Lazara,
There is no question but that the effect of the statutory exеmption at issue is local in nature. The agreed facts are that appellees are faced with similar problems as those faced by the border businesses. Certainly it must be acknowledged that the *193 border businesses have a more acute problem. Nevertheless, the exemption provided by the Legislature doеs not treat all in the same fashion. The exemption is based on an arbitrary line drawn 30 miles from the Mexican border. The Arizona Constitution under art. 4 Pt. 2 § 19(9) forbids the enactment of such a law.
We hold that Ariz.Rev.Stat. § 42-1321.01 is unconstitutional and thе exemption is void. The judgment of the Superior Court is affirmed.
Notes
. Ariz.Rev.Stat. § 42-1321.01 (Supp.1977) provides:
Exemptions.
In addition to the provisions of 42-1321 аnd until December 31, 1979 this article shall not apply to sales of less than one thousand dollars per transaсtion made directly to a legal resident of the Republic of Mexico who holds a valid nonresident alien border crossing card, or a valid nonimmigrant visa, and who displays such card, or visa, at the time of purchase. The provisions of this section shall apply only to those areas within thirty miles of the border between the United States and Mexico.
. Ariz.Const. art. 4 Pt. 2 § 19(9) provides:
Local or special laws.
Section 19. No local or special laws shall be enacted in any of the following cases, that is to say:
9. Assessment and collection of taxes.