NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE

.

IN THE 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

STATE OF ARIZONA, e x rel., ARIZONA DEPARTMENT OF REVENUE
, Plaintiff/Appell ee ,

v.

PETER A. TUNKEY, et al.
, Defendant s /Appell ants

.
No. 1 CA

- TX 21

- 0006

Appeal from the Arizona Tax Court No. TX2019

- 000451 The Honorable Danielle J. Viola
, Judge

AFFIRMED

COUNSEL
Arizona Attorney General’s Office , Phoenix By Penny Taylor Moore Counsel for Plaintiff/Appell ee
Quarles & Brady LLP , Phoenix By Paul Valentine, Jared W

. Miller C ounsel for Defendant s

/Appell ants FILED 4-19-2022STATE v. TUNKEY, et al. Decision of the Court

2 MEMORANDUM DECISION
Presiding Judge Cynthia J. Bailey delivered the decision of the Court, in which Judge Peter B. Swann and Judge D. Steven Williams joined.

B A I L E Y , Judge:

¶1 Appellants Peter A. Tunkey and Carrie A. Carn ey ( collectively, “the Tunkeys”) appeal the tax court’s denial of their motion for summary judgment and grant of summary judgment to the Arizona Department of Revenue (“ADOR”) on ADOR’s claim that the Tunkeys we re personal ly liabl e for the unpaid transaction privilege taxes (“TPT”) of KT McClintock, LLC (“KT”)

. For the following reasons , we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Fro m 2005 through 201 5 , Peter Tunkey was a manager of KT
, which did business as Silver Mine Subs in Arizona . KT charged customers to cover its TPT as permitted by statute

. See State ex rel. Ariz. Dep’t of Revenue v. Tunberg , 249 Ariz. 5, 7, ¶¶ 5

- 6 (App. 2020) ( stating that entities may bill and collect TPT from customer s and remit any additional charge collected to ADOR)

. As relevant here, KT filed TPT returns for March through June and August 2010; and February, May, and June 2012. KT self

- assessed the owed TPT for those returns but did not pay ADOR the amounts it agre ed

were due.

¶3 In 2019, ADOR filed a complaint against KT
, the Tunkeys
, and the marital community of another KT manager in tax court, alleging KT’s tax liability and the Tunkeys’ personal liability for the same pursuant to Arizona Revised Statutes (“ A.R.S. ”) section 42

- 5028. The tax court entered default judgment s against KT and the other manager.
¶4 ADOR and the Tunkeys filed separate motions for summary judgment
, each asking the court to determine whether the Tunkeys were jointly and severally liable for the unpaid TPT

. The parties agreed on the material facts, including: 1 ) KT filed the returns in question
, 2) these returns showed TPT amounts due to ADOR , 3) KT did not pay these amounts
, 4) Peter Tunkey was a KT officer when the tax returns were filed
, 5) he communicat ed with ADOR about KT’s TPT , set up payment arrangements , and made payments to ADOR on behalf of KT , 6) the Tunkeys were marriedSTATE v. TUNKEY, et al. Decision of the Court

3 when the returns were filed , and 7) ADOR had never issued an assessment against them personally.

¶5 In deny ing the Tunkeys ’ motion , t he tax c ourt ruled that under A.R.S. § 42

- 1114(A), ADOR may bring an action to recover unpaid TPT without making a formal deficiency assessment when a taxpayer admits that additional tax is due

. The court agreed th at ADOR had ten years from the date the amount owed becomes final to bring an action and

was no t li m ited to the four

- year statute of limi t ations for a notice of additional tax due
, as the Tunkeys argued. Compare A.R.S. § 42

- 1114(C) (allowing ADOR to pursue collectio n within ten years of the date the amount due becomes final)
, with § 42

- 1104(A) (requiring that ADOR mail a notice of additional tax due within four years of a tax return deadline)

. T he

c ourt found no notice of additional tax due was required because ADOR brought the action based on responsible

- party liability arising from Peter Tunkey’s status as a KT officer at the relevant time, not on the Tunkeys ’ personal tax return deficiency

. Because KT had filed tax returns that admitted TPT was d ue, no assessment for any party was required.

¶6 The tax court granted ADOR’s motion and concluded that ADOR was not required to separately obtain a formal deficiency assessment against the Tunkeys “or for that matter KT
, ” and the Tu n keys were jointly and severally liable as responsible parties for KT’s unpaid TPT

. ¶7 The t ax court entered judgment against the Tunkeys for $25,941.08. The Tunkeys appeal the denial of their summary judgment motion and the court’s grant of ADOR’s motion. W e have jurisdiction over the Tunkey s ’ timely appeal under Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12

- 120.21(A)(1) and

- 2101(A)(1)

.
DISCUSSION

I. Standard of Review

¶8 We review the grant of a motion for summary judgment de

novo

. Strojnik v. Gen

. Ins. Co. of Am.
, 201 Ariz. 430, 433, ¶ 10 (App. 2001)

. Generally, a denial of a motion for summary judgment is not reviewable even after judgment, id. at ¶ 11 (citing Bothell v. Two Point Acres, Inc. , 192 Ariz. 313, 316, ¶ 7 (App. 1998) ), but we may review the denial if the tax court denied it on a point of l aw , id. (citing Hauskins v. McGillicuddy , 175 Ariz. 42, 49 (App. 1992) ). We are persuaded to review this denial “because the issue presented in [ the Tunkeys’] motion is identical to th e one tendered in [ADOR’s] successful motion. ” Id. We will affirm a grant of summary judgment only if there is no genuine issue as to any material fact and theSTATE v. TUNKEY, et al. Decision of the Court

4 party seeking judgment is entitled to prevail as a matter of law. Williamson v. PVOrbit, Inc. , 228 Ariz. 69, 71, ¶ 11 (App. 2011)

.
II. S ummary J udgment

¶9 The Tunkeys argue that ADOR had to assess the m personally before it could bring a collection action against them. We disagree

. ¶10 Section 42

- 1114(A) allows ADOR to bring an action “ to recover the amount of any taxes, penalties, interest or other amounts owed by the taxpayer to [ADOR] that are due and unpaid. ” An “additional charge” for which a “person” is accountable is the total charged t o a customer to cover the TPT. Ariz. Dep’t of Revenue v. Action Marine, Inc. , 218 Ariz. 141, 145

- 46, ¶¶ 22

- 23 (2008) (citation omitted). Under A.R.S. § 42

- 5028
,

“ [a] person who fails to remit any additional charge made to cover the [TPT]

or truthfully ac count for and pay over any such amount is

. . . personally liable for the total amount of the additional charge so made and not accounted for or paid over. ” And t he “person” in § 42

- 5028 includes corporate officers and directors, in addition t o the taxpay ing entity. Action Marine , 218 Ariz. at 14 4

- 4 5, ¶ 18

. ¶11 T he Tunkeys assert that the deficiency assessment under A.R.S. § 42

- 1108 is required before ADOR initiates a collection action

. But the statute authorizing a suit for due and unpaid taxes imposes no such requirement. See A.R.S. § 42

- 1114(A). Contrary to the Tunkeys’ argument, § 42

- 1104(A) is not superfluous if not applied here ; instead, it applies to deficiency assessments or audits performed b efore ADOR determines whether to assess an additional tax liability

. See A.R.S. § 42

- 1108

. Here , an audit was un necessary: KT self

- assessed its tax liability, and ADOR accepted that assessment

. KT simply did not pay the amount it admitted had been collected and therefore was owed. Th e tax court properly denied the Tunkeys’ motion.

¶12 The Tunkeys also argue that because the Arizona Supreme Court in Action Marine described liability under A.R.S. § 42

- 5028 as “non

derivative personal liability
, ” an action to recover TPT from them constitutes a separate tax requiring an assessment. We disagree. We read Action Marine to say that § 42

- 5028 creates TPT liability for “persons” concurrent with the business entity’s liability, rather than creating a separate tax. Our s upreme c ourt in Action Marine sought to distinguish between liability that would be subject to additional penalties ( the business entity’s underlying TPT liability ) from the responsible party ’ s liability that would remain static even if the business entity ’s penalties increase d

. SeeSTATE v. TUNKEY, et al. Decision of the Court

5 218 Ariz. at 146

- 47, ¶ 28. Liability under § 42

- 5028 is not a separate tax and therefore no separate assessment was required.

¶13 Notwithstanding their arguments base d o n statutory interpretation, the Tunkeys did not dispute the material facts that the tax
court relied on to enter judgment on their joint and several liability for KT’s unpaid TPT. With no genuine issues of material fact, t he court properly granted summary judgment for ADOR

. See Orme Sch. v. Reeves , 166 Ariz. 301, 305 (1990).

CONCLUSION

¶14 We affirm.