Arizona Court Kicks Scottsdale Sales Tax Off November Ballot
By Staff Reporter |
An Arizona appellate court has kicked a sales tax proposal for the city of Scottsdale off the November ballot.
The Arizona Court of Appeals sided with a challenge by three city residents (represented by the Goldwater Institute) that the city’s ballot descriptions inaccurately characterized the sales tax as a decrease rather than a pitch for a new tax.
“The City’s description of the measure fails to properly disclose the proposition’s principal provision — that it creates a new tax,” said the court.
The city of Scottsdale characterized the sales tax proposal as a decrease of the current sales tax expiring next June from .20 percent to .15 percent over 30 years.
“Shall Scottsdale’s current 0.20% transaction privilege and use tax rate, expiring June 30, 2025, be replaced and reduced to 0.15% for 30 years to fund improvements, maintenance, and increased police and fire protection of citywide parks, recreational facilities, and the preserve as determined by city ordinance?”
The Arizona Superior Court had previously disagreed the ballot proposal language was false or misleading, and had granted the city’s motion to dismiss the residents’ complaint. However, in their Monday ruling, the Arizona Court of Appeals took issue with the city’s promise that the new sales tax was a replacement and reduction to the current one.
“This new tax would neither reduce the current tax rate (because the tax will remain at .2 percent until it expires), nor reduce the current tax rate after its expiration (because it would create a new tax),” stated the court. “The proposition’s description that a ‘YES’ vote would reduce the “transaction privilege and use tax rate” — which in total is 1.75% and made up of multiple different taxes including the 0.20% at issue here — to 0.15% is misleading because a ‘YES’ vote, in fact, would implement a brand-new tax.”
The court went on to say that the city’s explanation of the implication of a “no” vote was misleading because it could prompt voters to believe that their voting had an effect on the inevitable end of the current tax.
“[T]he ‘NO’ language in both the full text and Tagline text fails to communicate the essential change that a ‘NO’ vote would effectuate,” said the court. “Namely, that the current tax would terminate as scheduled and no longer exist. A ‘NO’ vote does not, somehow, result in a reduction as the language states; a ‘NO’ vote results in the current tax terminating on June 30, 2025, as currently scheduled.”
In its order, the Arizona Court of Appeals reversed the superior court order and enjoined the city and Maricopa County from including the measure on the November ballot.
Although the court offered some explanation for its ruling, the appeals court promised a full opinion would come out as well.
The Goldwater Institute said in a press release announcing the court win that the ruling would ensure more honest representation for taxpayers in the future.
“Local leaders in Scottsdale and across Arizona should consider themselves warned: public officials should not be in the business of deceiving taxpayers so they’ll vote to raise taxes on themselves,” said the think tank.
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