Arizona Department of Revenue Statement on Pinal County Transportation Excise Tax Refunds
Phoenix, AZ—Since the Arizona Supreme Court’s invalidation of Pinal County’s transportation excise tax last year in Vangilder v. Arizona Department of Revenue, 252 Ariz. 481 (2022) and the conception of a refund claim program that the Department announced on AZDOR.gov shortly after the decision, both the Department and the Pinal Regional Transportation Authority (PRTA) have been approached with a multitude of legislative, voter-referred, and judicial proposals as a means of determining how the collected monies should be disbursed or expended. Because the success of any one of these options would have fundamentally changed the ultimate disposition of these monies, we paused our efforts in response.
With the July 31 adjournment of the Legislature without legislation that would address this matter, questions remain as to the proper disposition of these monies. The Department acknowledges that its assistance may be needed and, indeed, essential to future efforts to reconcile the Department’s tax accounts of record for taxpayers who remitted the invalidated tax. However, the Department also recognizes the need for PRTA to be allowed to freely consider the means by which it wishes to structure a solution and pay for required services by service providers (including the Department) to participate in such a solution.
For these reasons, until the PRTA makes a decision regarding the final disposition of these funds, the Department cannot process any refund claims for the invalidated Pinal County transportation tax. The monies from the invalidated tax are currently held in an interest-bearing escrow account administered by the Pinal County Treasurer under the provisions of PRTA Resolution 2018-01 (Feb. 22, 2018). To the extent that any consent from the Department is required for these monies to be released, the Department has consented to have these funds released with immediate effect into the sole control and custody of the PRTA.