Arizona Court Strikes Down Scottsdale Sales Tax Proposal for November Vote

By Staff Reporter |

An Arizona appellate court has decisively removed a sales tax proposal from the November ballot in Scottsdale. This decision follows a challenge from three residents, represented by the Goldwater Institute, who argued that the ballot’s language misrepresented the tax as a reduction.

The Arizona Court of Appeals emphasized that the city’s description failed to clearly indicate that the proposal would introduce 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,” the court stated.

Initially, Scottsdale promoted the sales tax proposal as a reduction from the current .20 percent to .15 percent over the next 30 years, set to replace the existing tax expiring in June 2025. The ballot question read: “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?”

Previously, the Arizona Superior Court dismissed the residents’ claims, supporting the city’s position on the ballot language. However, the appeals court expressed concern that the city’s framing of the tax proposal misled voters about its nature. “This new tax would neither reduce the current tax rate… nor reduce the current tax rate after its expiration,” the court explained.

The court pointed out that the proposition’s language regarding a “YES” vote was misleading, indicating it would lower the overall tax rate, which is 1.75%. In reality, a “YES” vote would establish a new tax rather than reduce the existing one.

Additionally, the court addressed the misleading implications surrounding a “NO” vote, clarifying that it would result in the current tax terminating as scheduled rather than causing a reduction. “A ‘NO’ vote… results in the current tax terminating on June 30, 2025, as currently scheduled,” the court noted.

Consequently, the Arizona Court of Appeals overturned the superior court’s order and temporarily barred the city and Maricopa County from including the measure on the upcoming ballot. A more comprehensive opinion from the appeals court is expected to follow.

In a statement following the ruling, the Goldwater Institute highlighted the implications for future tax proposals, urging local leaders to avoid misleading voters. “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,” the think tank stated.