Arizona court says Pinal County transportation tax invalid

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PHOENIX (AP) - A voter-approved sales tax in Pinal County that is designed to fund transportation projects is invalid because it improperly exempts larger transactions, the Arizona Supreme Court ruled Tuesday.

The tax voters approved in 2017 adopts an illegal two-tier sales tax structure that isn’t allowed under state law, Justice Kathryn King wrote in the ruling that invalidated the tax. She said the county complied with state law when it adopted the tax voters later approved.

The tax exempts sales over $10,000 from the .5% tax, which attorneys for the Goldwater Institute said means that lower-income citizens are taxed more heavily for routine purchases than people who buy new cars or jewelry.

"The Arizona Supreme Court has rightly put an end to Pinal County’s illegal tax, and we look forward to the public getting back the money they’ve been unlawfully forced to hand over for years," Goldwater attorney Timothy Sandefur said in a statement.

Sandefur said the county needs to fix roads but repeatedly wasted money and then asked the public for more cash. He said that officials refused to "easily redesign" the tax to comply with the law.

Pinal County officials had no immediate comment, said James Daniels, the county’s marketing and communications director. He said county supervisors will be briefed on the ruling on Wednesday and may comment then.

The tax was expected to raise more than $640 million over 20 years to fund new and widened highways and other transportation projects.

Sandefur wrote in a blog post that he expects business owners who actually pay the transaction privilege tax system excise tax to get refunds once a final judgment is issued.

Daniels said he did not know how much has been collected under the disputed tax structure since it went into effect.