Half of the Pot Disappeared: $47M in Unlawful Road Tax Refunds Still Up for Grabs

Pinal County officials have approved 224 refund requests from businesses that paid a transportation excise tax recently ruled invalid. The tax, linked to Propositions 416 and 417, was intended to fund local transportation projects but faced legal challenges due to its structure.

As of now, the county has received a total of 274 refund applications. Among these, 23 were deemed ineligible because the applicants did not meet the established criteria or had not paid the tax, while another 23 are awaiting additional information. Four applications remain under review.

So far, approximately half of the total available funds have been refunded, leaving about $47.3 million still to be disbursed. County officials continue evaluating applications and encourage eligible taxpayers to submit the necessary documentation promptly to expedite the process.

The transportation excise tax was implemented following voter approval in 2017 and featured a two-tiered transaction privilege tax (TPT) structure. This model taxed the first $10,000 of any single item at 0.5%, exempting any amount above that threshold. However, the Arizona Supreme Court ruled in 2022 that although the county had followed state law in enacting the tax, its two-tiered structure was unconstitutional.

In March 2022, a memorandum of understanding was established among the Arizona Department of Revenue, Pinal County, and the Pinal Regional Transportation Authority to facilitate tax refunds to eligible businesses.

Businesses that paid the invalidated tax between April 2018 and March 2022 can request a refund, which includes applicable interest. The deadline for these submissions is April 9, 2026. Importantly, only businesses that filed and settled the tax are eligible for refunds, as the system operates on a transaction privilege tax basis, meaning businesses—not consumers—are responsible for tax payments.

For assistance with the refund process, Pinal County officials can be contacted at 520-509-3555 or via email.