On March 8, 2022, the Arizona Supreme Court found that the voter-initiated transportation tax in Pinal County was invalid because it exempts larger transactions.1 For the tax period April 2018 through March 2022, taxpayers were required to remit a higher sales tax rate of 7.20% vs. 6.70%. As a result of the ruling, starting April 1, 2022, the Pinal County’s combined tax rate will be adjusted to remove the surcharge.
On March 25, 2022, the Arizona Department of Revenue (ADOR) announced it was working with software vendors to ensure only the proper tax is collected. In addition, the ADOR is working on a plan to refund taxpayers the tax and interest that has been overpaid. The ADOR has estimated more than $80 million in potential refunds as a result of the overcollection. Because Arizona is a gross receipts state, tax is levied upon the seller of goods and services, not the customers. Taxpayers could expedite their refunds by filing a claim for the tax overpayments going back to April 2018, prior to any action by the ADOR.
Ryan is currently working with taxpayers in Pinal County and has a process in place for assisting taxpayers with filing the applicable tax refund requests. Please let us know if we can assist you in any way.
1 Harold Vangilder, et al., v. Arizona Department of Revenue, Arizona Supreme Court No. CV-20-0040-PR, Filed March 8, 2022.
TECHNICAL INFORMATION CONTACTS:
Zack Reif
Principal
Ryan
602.955.1792
zack.reif@ryan.com
Kevin Nguyen
Senior Manager
Ryan
602.955.1792
kevin.nguyen@ryan.com
Steven O’Connor
Manager
Ryan
602.955.1792
steven.oconnor@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.