Due to a recent Arizona Supreme Court decision, the Pinal County Transportation Tax has been invalidated. Beginning in April, the Pinal County combined tax rate for most businesses will decrease by .5%.
In the November 2017 special election, voters approved Proposition 417, which introduced a county transportation tax (link is external) in addition to several other excise taxes levied by Pinal County. This tax became effective on April 1, 2018.
As part of a legal challenge to the unique tiered structure of the Pinal County Transportation Tax–and subsequent appeals of lower court decisions–on March 8, 2022, the Arizona Supreme Court found that the tax is invalid, and affirmed an earlier Arizona Tax Court decision that the entire tax would be invalidated as a result.
ADOR and tax software vendors are working hard to get the necessary programming changes completed both for proper collection and reporting purposes. In the meantime, if point of sale systems continue to include the tax and cause businesses to collect the tax, under Arizona law, they will be first required to report and pay the amounts using the Excess Tax category when they file their returns before they qualify for a refund of the monies.
ADOR is working on a comprehensive plan to refund taxpayers the money they have paid in the invalidated tax, along with any applicable interest. We will be providing additional details on this process as soon as we can.
Taxpayers will continue to be liable for the other excise/privilege taxes levied by Pinal County, which are the general excise tax, excise tax for roads, and public health services district tax (link is external). Please note that ADOR shows these separate county-level taxes as a single combined rate with applicable state-level transaction privilege taxes on the tax rate tables the agency publishes on a monthly basis.
Original source can be found here.
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