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Class action cases challenge the
hotel tax and car rental taxes that are the funding sources for the University
of Phoenix Stadium and various Cactus League facilities
In the late 1990s, the owners of
the Arizona Cardinals had become dissatisfied with Sun Devil Stadium, where the
team had played its home games since moving to the Valley from St. Louis in
1988. The facility fell short of the standards for NFL stadiums, and the
Cardinals sought a competitive, publicly funded facility.
In May 1999, the City of Mesa held
a special election on a development proposal that would have increased the city
sales tax to finance the construction of a football stadium. Mesa voters rejected the
proposal, and the Cardinals weighed options for other locations, in Arizona and
elsewhere.
The National Football League’s
presence in Arizona was not the only professional sports enterprise that was in
jeopardy. In the mid-1990s, the eight members of Major League Baseball’s Cactus
League were the focus of overtures from Florida and Nevada seeking to lure
those teams with promises of new and more desirable spring
training ballparks and practice facilities.
task force
In the aftermath of the Mesa
election, and facing the prospect of the state losing the Cardinals and major league
spring training, Arizona Governor Jane Hull formed a 35-member Stadium Plan ‘B’
Advisory Task Force to 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 taxpayers.
Legislation
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.[1] 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.
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class action
lawsuit
Key filings from this case
are available below.
On November 16, 2010, Aiken Schenk,
on behalf of Saban Rent-a-Car, LLC and all similarly situated taxpayers, filed a
class action lawsuit in Arizona Tax Court challenging the constitutionality of
the Stadium Tax and requesting a refund for taxes paid between 2005 and 2008.
The case is pending in the Arizona Tax Court in Maricopa County, Case
No. TX2010-001089 (“Stadium Tax Case I”). The Stadium Tax Case I has been
certified as a class action, and notice has been distributed to members of the
class.
Aiken Schenk has filed three
additional claims with the Arizona Department of Revenue and the Office of
Administrative Hearings on behalf of Arizona taxpayers challenging the
constitutionality of the Stadium Tax, the Spring Training Tax, and the Hotel
Tax:
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an administrative claim
challenging the constitutionality of the Stadium Tax and requesting
a refund of taxes paid April 2008 - April 2012 (the “Stadium Tax
Case II”);
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an administrative claim
challenging the constitutionality of the Spring Training Tax and
requesting a refund of taxes paid April 2008 - April 2012 (the
“Spring Training Tax Case”); and
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an administrative claim
challenging the constitutionality of the Hotel Tax and requesting a
refund of taxes paid April 2008 - April 2012 (the “Hotel Tax Case”).
These three matters are pending
before the Office of Administrative Hearings. When the administrative process is
exhausted, Aiken Schenk intends to file class action lawsuits on each of these
issues in the Arizona Tax Court. If you have any questions about these matters,
please contact Stephanie McCoy Loquvam
by phone (602-248-8203) or
email.
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Class Action Complaint
Answer (by Arizona Department of Revenue)
Answer (by Arizona Sports and Tourism Authority)
Motion for Summary Judgment (by Defendants)
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)
Statement of Facts in Support of Response to Motion for Summary Judgment
and Cross Motion for Summary Judgment (by Plaintiffs)
Response to Plaintiffs’ Motion for Summary Judgment and Reply in Support
of Motion for Summary Judgment (by Defendants)
Responsive Statement of Facts and Evidentiary Objections to Plaintiff’s
Separate and Responsive Statement of Facts (by Defendants)
Reply to Defendants’ Response to Motion for Summary Judgment (by
Plaintiffs)
Notice to Class |
