VIA SBINSIDER REPORTING| September, 23, 2023
Pinal County voters barely passed a sales tax increase targeted for transportation needs in 2018. The tax was immediately challenged by the Goldwater Institute as being illegal in that it was not charged on sales over 10K-effectively shielding car purchases above that amount from the extra tax. That provision was included in the proposition put to the voters and then car dealers wrote big checks to help promote its passage. The car dealers wanted better roads (we all do) but did not want their customers to get dinged as part of a car sale.
Goldwater Institute is famous (or infamous, depending on your politics) for litigating many issues and most notedly the expansion of school choice vouchers in Arizona and across the country.
After 5 years of litigation, the Arizona Supreme Court agreed that the tax was illegal. In the meantime, Pinal County retailers had been collecting the tax via retail sales and due to the on-going legal battle, the money was placed in an escrow account controlled by the Arizona Department of Revenue.
How to give the money back?
The devil is in the details! Goldwater has recently filed another suit with the Supreme Court to force Pinal County or the DOR to begin refunding the money. One problem; The money was collected from thousands of taxpayers at point of sale retail and the aggregates were sent to the Depart of Revenue. One option is to cut checks to each of the retail outlets which originally collected the money-but then what? Is Walmart or San Tan Flat supposed to pass through that money to the new customers who transact at their respective place of business? Another option is for the DOR to give the funds to Pinal County and then the county could pass along the saving via property taxes-but not all residents directly pay property taxes as they are renters.
Goldwater Institute and other tax activist groups could step up and offer their own solution to the refunds. SBINSIDER has contacted Goldwater and will publish their solution when and if offered.