Grand Canyon Times

Gov. Doug Ducey (R-Ariz.) released a statement calling the blocking of Prop 208 “a win for Arizona taxpayers" after a superior court judge blocked its implementation.

Maricopa Superior Court Judge John R. Hannah Jr. on March 11 issued the ruling, which “permanently enjoins the Arizona Department of Revenue from administering or collecting the income tax surcharge levied by 2020’s Arizona Proposition 208," according to the state Department of Revenue's (DOR) website. Proposition 208 mandated an additional tax on high-income Arizonans and was used to fund public education.

"This ruling is a win for Arizona taxpayers," Ducey said. "It’s another step in undoing the damage of Prop 208 and making sure we continue to benefit from having the lowest flat income tax rate in the nation."

The state Supreme Court previously ruled that the tax surcharge of 3.5% for people who earn $250,000 annually and couples who earn $500,000 was unconstitutional, and sent it back to Hannah.

"While we expect the ruling may be appealed, we are confident the Arizona Supreme Court will find 208 unconstitutional, as they did last year,” Ducey said. “Arizona is – and will remain – a state that knows how to prioritize education while keeping taxes low and attracting jobs."

The surcharge would have added 3.5% on top of the regular income tax rate of 4.5%, giving higher-income people and families a rate of 8%, which would be used to fund schools.

Arizona taxpayers won’t owe more taxes due to the blocking of the Prop 208 surcharge, nor will they get more money back, according to the state DOR. Instead, anything that taxpayers paid toward the surcharge will be applied to satisfy taxpayers’ normal Arizona individual income tax rate of 4.5% for the tax year. Those who have already filed do not have to amend their returns, the DOR said.