In the News
Shawn Aiken discusses
the August 12, 2015, ruling ordering the refunding of tax proceeds. (August
Phoenix Rental Companies Challenge $34
Million in Taxes, Auto Rental News, June 7, 2016
Rental Car Firms Challenging $34 Million in Phoenix Taxes,
Washington Times, May 31, 2016
Rental Car Companies Fight Phoenix Tax,
Arizona Republic, May 31, 2016
Rental Car Agencies Want to Cut Off Arizona Stadiums' Main Funding Source,
Arizona Republic, October 12, 2015
Judge: Arizona Must Refund Millions from Rental-Car Tax
that Pays for Stadiums, Arizona Republic, August 13, 2015
Court Ruling on Stadium Financing a Big Problem
(editorial), Arizona Republic, June 18, 2014
Judge Strikes Down Rental-Car Tax for Stadiums, Arizona
Republic, June 17, 2014
Stadium Tax: State Must Refund Millions of Dollars in Rental
Car Taxes, Judge Rules
Tax to pay for
University of Phoenix Stadium was ruled unconstitutional in July 2014
June 2014 |
Updated June 2016
On August 12, 2015, a Maricopa County Superior Court judge
ordered that the
State of Arizona must refund collections of a rental-car tax
that, a year earlier, was ruled unconstitutional.
The Arizona Sports and Tourism Authority (AzSTA) uses proceeds
from the tax to retire the debt incurred from the development and construction
of the University of Phoenix Stadium, home of the NFL's Arizona Cardinals.
In November 2000, Maricopa County voters approved the AzSTA tax
on car rentals and hotel room rentals. In 2010, Aiken Schenk and Kickham Hanley filed a class action lawsuit challenging the constitutionality of the tax and seeking
a refund of taxes collected between 2005 and 2008.
On June 16, 2014, Maricopa County Superior Court Judge Dean M.
Fink granted the plaintiffs' cross-motion for summary judgment,
citing Article 9, Section 14 of the state's constitution, which provides that
"[n]o moneys derived from fees, excises, or license taxes relating to
registration, operation, or use of vehicles on the public highways or streets"
are to be used for any purpose other than specified highway-related purposes.
Judge Fink rejected the Arizona Department of Revenue's argument
that the AzSTA tax was levied "not on the sale of a good or service, but on the
privilege of conducting such a sale." Citing the Arizona Court of Appeals'
Karbal opinion, he noted that "the AzSTA tax is neither a true transaction
privilege tax nor a true sales tax [and] the general rule governing pure
transaction privilege taxes thus may not apply to it. Even if it does, the
Constitution restricts the use not only of taxes on vehicles, but of
taxes relating to vehicles.
Aiken Schenk attorney Shawn
and Michigan attorney
(Kickham Hanley PLLC)
represent the plaintiffs in the class action lawsuit. Saban Rent-A-Car, LLC is
the class representative for a plaintiff class of all rental car companies doing
business in Maricopa County.
In 1999, then-Governor Jane Hull formed a 35-member stadium task
explore funding opportunities for a new football stadium and spring training
facilities, assess the economic impact, and devise a possible funding package.
Governor Hull directed that any public financing scheme should have little
effect on the average Arizona citizen. The final task force report recommended
financing the football stadium and spring training initiatives through the
assessment of a hotel tax and a car rental surcharge. The report noted that
85-95% of the new tax would be paid by visitors to Arizona; only $22 million of
the $329 million price tag for the stadium would be financed by Arizona’s
In March 2000, the Arizona Legislature passed Senate Bill 1220,
which provided that construction of the football stadium and spring training
facilities would be funded in part by surcharges on car rentals and a one
percent tax on hotel revenue. In November 2000, a majority of Maricopa County
voters approved Proposition 302 authorizing the Stadium Tax, the Spring Training
Tax, and the Hotel Tax. The taxes were collected by the Arizona Department of
Revenue and were used to fund the construction of University of Phoenix Stadium
and various spring training initiatives.
Stadium construction began in 2003, and the stadium opened in
Class Action Complaint,
Answer (by Arizona Department of Revenue),
Answer (by Arizona Sports and Tourism Authority), 1-4-2011
Motion for Summary Judgment (by Defendants) and
Statement of Facts in Support of Motion for Summary Judgment (by Defendants),
Response to Motion for Summary Judgment and Cross Motion for Summary Judgment
(by Plaintiffs) and
Statement of Facts in Support of Response to Motion for Summary Judgment and
Cross Motion for Summary Judgment (by Plaintiffs), 3-21-2011
Response to Plaintiffs’ Motion for Summary Judgment and Reply in Support of
Motion for Summary Judgment (by Defendants) and
Responsive Statement of Facts and Evidentiary Objections to Plaintiff’s Separate
and Responsive Statement of Facts (by Defendants), 4-4-2011
Reply to Defendants’ Response to Motion for Summary Judgment (by Plaintiffs),
Notice to Class, 5-4-2012
Plaintiffs' Report Regarding Discovery Responses and Development of the Factual
Plaintiffs' Reply in Support of Report Regarding Discovery Responses and
Development of the Factual Record, 12-9-2013
Plaintiffs' Supplemental Brief Concerning Discriminatory Effect (Commerce Clause
Challenge) re: Plaintiffs' Pending Cross-Motion for Summary Judgment,