Gilbert Town Council Faces Legal Action from Goldwater Institute Over Controversial Pickleball Tax

By Matthew Holloway |

The Town of Gilbert faces legal action initiated by the Goldwater Institute, representing the Home Builders Association of Central Arizona and local property owner Jonathan Barth. The lawsuit centers on claims that Gilbert’s recent tax increases breach the Arizona Constitution, which prohibits tax hikes on various services.

The Goldwater Institute argues that the tax increase affects numerous businesses that do not produce tangible goods, including sectors like advertising, photography, and construction. Specifically, the lawsuit targets two primary tax increases: one on homebuilding and another on short-term rental properties.

According to the legal complaint, the Arizona Constitution explicitly forbids counties and municipalities from implementing or increasing transaction-based taxes on services. The new ordinance introduced by Gilbert raises the existing sales tax by 0.5% and introduces a “use tax” on purchases from out-of-state vendors generating less than $100K in sales within Arizona.

The lawsuit asserts that the ordinance will result in higher tax rates for individuals like Barth, who relies on rental income from a detached bungalow. Barth expressed his concerns, stating, “This tax hike makes it all the more difficult to make ends meet in Gilbert.”

Former Mayor Brigette Peterson, along with current Town Council members, has been named as defendants in the lawsuit. The town plans to allocate an estimated $55 million from the new tax revenue towards “Critical Infrastructure Projects.” This claim has raised eyebrows, as the Goldwater Institute contends that the proposed projects include amenities such as pickleball courts and splash pads rather than essential infrastructure.

Moreover, the Home Builders Association of Central Arizona warned that these increased taxes will drive up construction costs in Gilbert. CEO Jackson Moll criticized the town’s actions, stating, “Gilbert officials are trampling on their own constituents’ rights… The Arizona Constitution is clear: increasing taxes on services, including on construction contracting, is unlawful.”

This legal challenge follows a similar complaint previously filed by the Goldwater Institute against the Town of Payson, which sought to incur $70 million in debt through a bond measure without conducting a public referendum.

Matthew Holloway is a reporter for AZ Free News. Follow him on X for the latest stories or email tips to Matthew@azfreenews.com.