IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

HAROLD VANGILDER, et al., Plaintiffs/Appellees/Cross-Appellants,

v.

ARIZONA DEPARTMENT OF REVENUE, Defendant/Appellee/CrossAppellee,

PINAL COUNTY, et al., Defendants/Appellants/Cross-Appellees.

No. 1 CA-TX 19-0001 

Appeal from the Arizona Tax Court

No. TX2017-000663

The Honorable Christopher T. Whitten, Judge

REVERSED IN PART; AFFIRMED IN PART

COUNSEL

Goldwater Institute, Phoenix

By Timothy Sandefur, Matthew Robert Miller

Co-Counsel for Plaintiffs/Appellees/Cross-Appellants 

Mooney Wright & Moore, P.L.L.C, Mesa

By Paul J. Mooney

Co-Counsel for Plaintiffs/Appellees/Cross-Appellants

Arizona Attorney General’s Office, Phoenix

By Scot G. Teasdale, Jerry A. Fries, Lisa A. Neuville

Counsel for Defendant/Appellee/Cross-Appellee

FILED 1-16-2020
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

2

Pinal County Attorney’s Office, Florence

By Christopher C. Keller

Co-Counsel for Defendant/Appellant/Cross-Appellee Pinal County

Ballard Spahr L.L.P., Phoenix

By Joseph A. Kanefield, Brian Schulman, Chase Bales

Co-Counsel for Defendants/Appellants/Cross-Appellees Pinal County and Pinal 

Regional Transportation Authority

Fennemore Craig, P.C., Phoenix

By Patrick Irvine, Taylor Burgoon

Co-Counsel for Defendants/Appellants/Cross-Appellees Pinal County and Pinal 

Regional Transportation Authority

Sims Mackin, Ltd., Phoenix

By William J. Sims

Co-Counsel for Defendant/Appellant/Cross-Appellee Pinal Regional 

Transportation Authority 

Rose Law Group, P.C., Scottsdale

By Evan Bolick, Johathan Udell

Amicus Curiae for Pinal Partnership Inc.

Dickson Wright P.L.L.C., Phoenix

By Scott A. Holcomb, Vail C. Cloar

Amicus Curiae for Town of Queen Creek

Fitzgibbons Law Office, P.L.C., Casa Grande

By Denis M. Fitzgibbons

Amicus Curiae for City of Maricopa and City of Coolidge

Florence Town Attorney’s Office, Florence

By Clifford L. Mattice

Amicus Curiae for Town of Florence

The Cavanagh Law Firm, P.A., Phoenix

By James G. Busby, Jr., Karen C. Stafford

Amicus Curiae for Arizona Tax Research Association and The Arizona Free 

Enterprise Club
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

3

OPINION

Presiding Judge Kenton D. Jones delivered the Opinion of the Court, in 

which Judge James B. Morse Jr. and Judge Diane M. Johnsen joined.

J O N E S, Judge:

¶1 In 2017, Pinal County voters simultaneously approved

Proposition 416 (Prop 416) to adopt a regional transportation plan and 

Proposition 417 (Prop 417) to enact an excise tax to fund the plan. In this 

appeal, Appellants, Pinal County (the County) and the Pinal Regional 

Transportation Authority (the RTA), appeal from the tax court’s order 

invalidating the excise tax, and Cross-Appellants (collectively, Vangilder) 

challenge the court’s order denying their request for an award of attorneys’ 

fees. The Arizona Department of Revenue (ADOR) joins Vangilder in 

asserting the tax is invalid but joins Appellants in defending Prop 417’s 

constitutionality and opposing Vangilder’s claim for fees. 

¶2 We find the Prop 417 tax to be valid. The RTA’s authorizing 

resolution does not change the substance of the question posed to and 

approved by the voters; the tax, by its terms, applies across all transaction 

privilege tax (TPT) classifications; and the tax includes a valid, 

constitutional modified rate as applied to the retail sales classification. 

Accordingly, we reverse the order invalidating the tax. Because Vangilder 

is no longer the successful party in the tax court, we affirm the denial of his 

request for attorneys’ fees.

FACTS AND PROCEDURAL HISTORY

¶3 The RTA is a public improvement and taxing subdivision of 

the State of Arizona established by the Pinal County Board of Supervisors 

(the Board) in 2015 to coordinate multi-jurisdictional transportation 

planning, improvements, and funding. See Ariz. Rev. Stat. (A.R.S.) § 48-

53021 (governing the establishment of a regional transportation authority). 

Arizona law authorizes the RTA to formulate a plan for transportation 

projects and propose an excise tax to pay for them. See generally A.R.S. 

§§ 48-5309, -5314. By statute, a county transportation excise tax must be 

1 Absent material changes from the relevant date, we cite a statute’s 

current version.
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

4

“approved by the qualified electors voting at a countywide election.” 

A.R.S. § 42-6106(A); see also A.R.S. § 48-5314(F).

¶4 In June 2017, the RTA adopted the Pinal County Regional 

Transportation Plan (the Plan), which identifies key roadway and 

transportation projects to be developed over the next twenty years. In the 

same resolution (the June Resolution), the RTA asked the County to 

schedule a special election on the Plan and on “the issue of levying a 

transportation excise tax at a rate equal to one-half percent (0.005%) [sic] of 

the gross income from the business activity upon every person engaging or 

continuing in the business of selling tangible personal property at retail . . . 

needed to fund the Plan.” The June Resolution further stated that the tax 

rate upon retail sales would be a “variable or modified rate,” in that the tax 

would apply only to the first $10,000 in gross income from the sale of any 

single item of tangible personal property, effectively capping the tax at $50 

per item.

¶5 Before the election, and as directed by A.R.S. § 48-5314(C), the 

Board printed a publicity pamphlet describing Prop 416 and Prop 417 (the 

Pamphlet). The RTA “ratified, confirmed, approved and adopted [the 

Pamphlet] in the form presented” in October 2017 (the October Resolution). 

The Pamphlet detailed the planned transportation projects and explained 

that they could be completed only if voters approved the excise tax in Prop 

417. As relevant here, the Pamphlet further explained:

If Proposition 417 is approved by the voters, the 

Transportation Excise Tax would . . . be assessed on the same 

business transactions that are subject to the State of Arizona 

transaction privilege (sales) tax [(TPT)], but at a rate equal to 

10% of the State tax . . . . [T]he Transportation Excise Tax rate 

will generally be 0.5% or 1 cent on each $2 o[f] State taxable 

items.

The Pamphlet identified each of the sixteen business classifications subject 

to the TPT and detailed the rates at which the transportation excise tax 

would apply to each class.2 See A.R.S. §§ 42-5061 to -5076. With respect to 

2 The TPT is a tax “on the privilege or right to engage in an occupation 

or business in the State of Arizona” and applies at varying rates to “the 

gross receipts of the seller’s business activities.” CCI Europe, Inc. v. ADOR, 

237 Ariz. 50, 52, ¶ 9 (App. 2015) (citations omitted); see also A.R.S. § 42-

5008(A) (levying a privilege tax “for the purpose of raising public money” 

that is “measured by the amount or volume of business transacted by 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

5

the retail sales classification, the Pamphlet described the same two-tiered 

structure outlined in the June Resolution. The Pamphlet estimated that 

revenues from the tax across all business classifications would total 

approximately $640 million over twenty years — the precise amount 

needed to fund the projects detailed within the Plan.

¶6 The question ultimately posed to the voters was stated in both 

the Pamphlet and official ballot:

PROPOSITION 417 

(Relating to County Transportation Excise (Sales) Taxes)

Do you favor the levy of a transportation excise (sales) tax 

including at a rate equal to one-half percent (0.5%) of the gross 

income from the business activity upon every person 

engaging or continuing in the business of selling tangible 

personal property at retail; provided that such rate shall 

become a variable or modified rate such that when applied in 

any case when the gross income from the sale of a single item 

of tangible personal property exceeds ten thousand dollars 

($10,000), the one-half percent (0.5%) tax rate shall apply to 

the first ten thousand dollars ($10,000), and above ten 

thousand dollars ($10,000), the measure of tax shall be a rate 

of zero percent (0.0%), in Pinal County for twenty (20) years 

to provide funding for the transportation elements contained 

in the Pinal Regional Transportation Plan?

Do you favor the levy of a transaction privilege (sales) tax for 

regional transportation purposes, including at a variable or 

modified rate, in Pinal County?

YES _____

NO _____

(A “YES” vote has the effect of imposing a transaction 

privilege (sales) tax in Pinal County, including at a variable or 

modified rate, for twenty (20) years to provide funding for the 

persons on account of their business activities, and in the amounts to be 

determined by the application of rates against values, gross proceeds of 

sales or gross income, as the case may be, as prescribed by [Arizona 

statutes]”).
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

6

transportation projects contained in the Regional 

Transportation Plan.)

(A “NO” vote has the effect of rejecting the transaction 

privilege (sales) tax for transportation purposes in Pinal 

County.) 

In November 2017, Pinal County voters approved both the regional

transportation plan set out in Prop 416 and the transportation excise tax set 

out in Prop 417. 

¶7 The following month Vangilder filed a complaint to enjoin 

ADOR, the County, and the RTA from collecting and/or enforcing the tax, 

alleging it was invalid and unconstitutional.3 The tax court resolved 

competing motions for summary judgment in Vangilder’s favor but denied 

his request for an award of attorneys’ fees under the private attorney 

general doctrine. The parties timely appealed, and we have jurisdiction 

pursuant to A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).

DISCUSSION

I. The Prop 417 Tax is Valid.

¶8 Resolution of this appeal requires us to determine the scope 

and legality of the tax enacted by the voters via Prop 417. The interpretation 

and application of a voter-approved measure present questions of law we 

review de novo. See Ariz. Citizens Clean Elections Comm’n v. Brain, 234 Ariz. 

322, 325, ¶ 11 (2014).

A. The Authorizing Resolution Does Not Invalidate the Tax.

¶9 Vangilder first contends the tax is invalid because the June 

Resolution described a tax on “the gross income from the business activity 

upon every person engaging or continuing in the business of selling

tangible personal property at retail.” See supra ¶ 4. Thus, Vangilder 

3 Like the tax court, we decline to consider whether Harold Vangilder, 

as a consumer of goods and services, has standing to challenge the validity 

of the tax, because the other plaintiffs who joined him in filing the complaint 

operate businesses clearly subject to the TPT. See Karbal v. ADOR, 215 Ariz. 

114, 116-18, ¶¶ 11, 16-17 (App. 2007) (holding a customer lacked standing 

to challenge an excise tax because “[t]he legal incidence of the transaction 

privilege tax is on the seller”) (citing J. C. Penney Co. v. ADOR, 125 Ariz. 469, 

472 (App. 1980)).
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

7

contends “voters were asked to approve a tax that applied solely to retail 

sales” in violation of A.R.S. § 42-6106(B), which requires the county

transportation excise tax be imposed upon all TPT classifications. We 

disagree with both the factual premise and the legal import of Vangilder’s 

argument.

¶10 First, A.R.S. § 48-5314(A) required the RTA to adopt a twentyyear regional transportation plan and then “[r]equest by resolution certified 

to the county board of supervisors that the issue of levying a transportation 

excise tax . . . be submitted to the qualified electors at a countywide special 

election or placed on the ballot at a countywide general election.” The RTA 

is not authorized to enact a tax and the June Resolution did not purport to 

do so. Nor did the June Resolution ask the voters to enact the tax. It simply 

asked the Board to put a transportation excise tax on the County ballot. 

Thus, “[t]he most that can be said for” the June Resolution is that it 

“demand[ed] an election . . . at which the electorate would be asked to 

decide whether [the tax should be enacted].” See Saggio v. Connelly, 147 

Ariz. 240, 241 (1985).

¶11 Second, although Vangilder relies on Braden v. Yuma County 

Board of Supervisors, 161 Ariz. 199 (App. 1989), to argue the RTA’s failure to 

properly describe the tax in the June Resolution invalidates the tax, Braden

does not apply. There, a county board of supervisors attempted to levy an 

assessment to build a bridge within a flood control improvement district. 

Id. at 200. The relevant statute “required as a prerequisite” that the board

first adopt a resolution specifying its intention to undertake a flood control 

project before imposing an assessment for the project. Id. at 203-04. The

board had not enacted such a resolution before it approved the bridge and 

the related assessment, and thus, had not given the required notice of its

intentions. Id. at 204. Accordingly, the Braden court invalidated the 

assessment because the board’s failure to comply with the statute did not 

“afford[] the landowner an opportunity to be heard on the necessity and 

wisdom of the proposed improvement.” Id.; see also Henningson, Durham & 

Richardson v. Prochnow, 13 Ariz. App. 411, 416 (1970). By contrast, nothing 

in the statutory scheme at issue here, governing passage of a county 

transportation excise tax, suggests the RTA’s resolution was required to or 

intended to provide the public with notice of the details of the proposed 

tax. See generally A.R.S. § 48-5314(A)(2) (describing the process for referring 

a transportation excise tax to the voters).

¶12 In fact, A.R.S. § 48-5314(A)(2) only required the authorizing 

resolution to be sent to the Board — not that it be posted, distributed to the 

voters, or otherwise publicized. Unlike the statute in Braden, the statute
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

8

applicable to the county transportation excise tax contemplates that the full 

and final details of a proposed tax — including “the rate of the 

transportation excise tax” — will be contained within a publicity pamphlet 

that is mailed to voters before the election. A.R.S. § 48-5314(C). The Board 

did just that here; the Pamphlet containing the details of the tax, along with 

the form of the proposal to be stated on the ballot, gave the public proper 

notice of the particulars of the Prop 417 tax, and governs the scope and 

content of the tax.

B. The Prop 417 Tax Applies to All TPT Classifications.

¶13 Vangilder and ADOR argue that the tax is invalid because 

they read Prop 417 to describe a tax that applies only to retail sales in 

violation of A.R.S. § 42-6106(B)(1). We again disagree.

¶14 When construing a voter-approved measure, “[o]ur primary 

objective . . . is to place a reasonable interpretation on ‘the intent of the 

electorate that adopted it.’” State v. Estrada, 201 Ariz. 247, 250, ¶ 15 (2001) 

(quoting Foster v. Irwin, 196 Ariz. 230, 231, ¶ 3 (2000)). We begin by 

examining the plain language of the measure, see Am. Bus Lines, Inc. v. Ariz. 

Corp. Comm’n, 129 Ariz. 595, 598 (1981), “giv[ing] the words used ‘their 

natural, obvious and ordinary meaning’ unless the context suggests 

otherwise,” Ariz. Chamber of Commerce & Indus. v. Kiley, 242 Ariz. 533, 537, 

¶ 9 (2017) (quoting Brewer v. Burns, 222 Ariz. 234, 239, ¶ 26 (2009)); see also

A.R.S. § 1-213 (“Words and phrases shall be construed according to the 

common and approved use of the language.”). If the measure is subject to 

only one reasonable meaning, “[w]e apply the provision as written.” Kiley, 

242 Ariz. at 537, ¶ 9 (citing Ariz. Early Childhood Dev. & Health Bd. v. Brewer, 

221 Ariz. 467, 470, ¶ 10 (2009)).

¶15 The Prop 417 Pamphlet and ballot asked Pinal County voters:

Do you favor the levy of a transportation excise (sales) tax 

including at a rate equal to one-half percent (0.5%) of the 

gross income from the business activity upon every person 

engaging or continuing in the business of selling tangible 

personal property at retail; provided that such rate shall 

become a variable or modified rate such that when applied in 

any case when the gross income from the sale of a single item 

of tangible personal property exceeds ten thousand dollars 

($10,000), the one-half percent (0.5%) tax rate shall apply to 

the first ten thousand dollars ($10,000), and above ten 

thousand dollars ($10,000), the measure of tax shall be a rate 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

9

of zero percent (0.0%), in Pinal County for twenty (20) years 

to provide funding for the transportation elements contained 

in the Pinal Regional Transportation Plan?

Do you favor the levy of a transaction privilege (sales) tax for 

regional transportation purposes, including at a variable or 

modified rate, in Pinal County?

(Emphasis added.). Voters were then advised: “A ‘YES’ vote has the effect 

of imposing a transaction privilege (sales) tax in Pinal County, including at 

a variable or modified rate, for twenty (20) years to provide funding for the 

transportation projects contained in the Regional Transportation Plan.” 

¶16 Vangilder argues the phrase “including at a rate,” 

emphasized in the quoted language above, established and limited the 

scope of the tax to “person[s] engaging or continuing in the business of 

selling tangible personal property at retail” only. Under this interpretation, 

however, the descriptive phrase “including at a rate” could be deleted 

entirely from the proposal, such that the voters were said to be asked: “Do 

you favor the levy of a transportation excise (sales) tax [] equal to one-half 

percent (0.5%) of the gross income from the business activity upon every 

person engaging or continuing in the business of selling tangible personal 

property at retail?” While Vangilder’s interpretation is not entirely 

untenable, it renders the phrase “including at a rate” meaningless, in 

contravention to the general rule of construction that “each word, phrase, 

clause and sentence must be given meaning so that no part will be void, 

inert, redundant or trivial.” Adams v. Bolin, 74 Ariz. 269, 276 (1952) (citing

City of Phx. v. Yates, 69 Ariz. 68, 72 (1949)).

¶17 The entire sentence can be given meaning if we read the 

question as: “Do you favor the levy of a transportation privilege (sales) tax 

. . . in Pinal County?” Under this interpretation, the phrase that begins with 

the word “including” and continues through the explanation of the tieredrate structure for the retail sales classification provides one example of what 

the proposed tax would include. This interpretation aligns with the

phrasing of the ballot question and the Pamphlet’s explanation of the effect 

of a “YES” vote — both of which use commas to set off the phrase 

“including at a variable or modified rate [as applied to retail sales].” See 

supra ¶ 15. Adding a comma before the word “including” in the body of 

the initial long paragraph on the ballot would more clearly demonstrate an 

intent to set that phrase apart, but we have long held “that strict rules of 

technical grammar will not be resorted to to defeat the plain purpose of the 

statute.” Adams, 74 Ariz. at 276 (citing Mahoney v. Maricopa Cty., 49 Ariz. 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

10

479, 492 (1937)); cf. City of Phx. v. Butler, 110 Ariz. 160, 162 (1973) (explaining 

that the average voter may still be able to understand the intended meaning 

of words even if “[t]he choice of words to be used on a ballot might be 

clearer”).

¶18 Reading all portions of the initiative together, cf. Indus.

Comm’n v. C & D Pipeline, Inc., 125 Ariz. 64, 67-68 (App. 1979) (“[I]t is a 

fundamental principle of statutory construction that a statute should be 

considered as a whole.”) (citations omitted), there is but one reasonable 

interpretation of Prop 417 as it appeared on the ballot. We thus conclude 

that “including” modifies “transportation excise (sales) tax,” and the 

remainder of the phrase describes the retail-sales component of a broader

tax.

¶19 Vangilder correctly observes the ballot did not identify any of 

the other fifteen business classifications to which the tax would apply. But 

generally applicable tax rates — that is, those not variable or modified —

are not required to be specified on the ballot itself. See A.R.S. § 48-5314 

(detailing ballot requirements for a regional transportation excise tax).

And, pursuant to statute, a “transportation excise (sales) tax” is a tax that 

applies across all TPT classifications. See A.R.S. § 42-6106(B) (describing the 

conditions under which the transportation excise tax “shall be levied and 

collected”).

¶20 Additionally, the Pamphlet the Board sent to voters before the 

election clearly advised that the “transportation excise tax” would “be 

assessed on the same business transactions that are subject to the State of 

Arizona transaction privilege (sales) tax.” The Pamphlet specifically 

identified each of the business classifications subject to the TPT and then 

specified the rate that would apply to each classification, including the 

tiered-rate structure proposed for retail sales. Thus, even if the scope of the 

tax was not clear from the ballot alone, secondary principles of construction 

support the conclusion that the tax was to apply to all business 

classifications. See Jett v. City of Tucson, 180 Ariz. 115, 119-20 (1994) 

(recognizing the value of “a publicity pamphlet to apprise the voters of the 

purpose and intent behind the [ballot proposition]” in ascertaining its 

intended effect); accord Calik v. Kongable, 195 Ariz. 496, 500, ¶ 16 (1999); Laos 

v. Arnold, 141 Ariz. 46, 48 (1984).

¶21 For these reasons, we reject Vangilder’s suggestion that 

construing the proposition to apply to TPT classifications other than retail

sales would extend the tax to “something not specifically covered by the 

language” of the proposition, Corp. Comm’n v. Equitable Life Assurance Soc’y 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

11

of U.S., 73 Ariz. 171, 178 (1951), and “gather new objects of taxation by 

strained construction or implication,” Ariz. State Tax. Comm’n v. Staggs 

Realty Corp., 85 Ariz. 294, 297 (1959). There is nothing strained in the 

application of the ordinary meaning of the word “including” to signal that 

the description of the retail-sales component that followed was merely part 

of a non-exhaustive list of business classifications to which the proposed 

tax would apply. See A.R.S. § 1-215(14) (“‘Includes’ or ‘including’ means 

not limited to and is not a term of exclusion.”); Fed. Land Bank of St. Paul v. 

Bismarck Lumber Co., 314 U.S. 95, 100 (1941) (“[T]he term ‘including’ is not 

one of all-embracing definition, but connotes simply an illustrative 

application of the general principle.”); accord United States v. Wyatt, 408 F.3d 

1257, 1261 (9th Cir. 2005); and P.R. Maritime Shipping Auth. v. Interstate 

Commerce Comm’n, 645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981).

¶22 “[T]he courts will not strain, stretch and struggle to uncover 

hidden taxable items,” State Tax Comm’n v. Miami Copper Co., 74 Ariz. 234, 

243 (1952) (citing Alvord v. State Tax Comm’n, 69 Ariz. 287, 292 (1950)), but

such efforts are not required here. When considered as a whole, Prop 417 

can only be reasonably read to have proposed a transportation excise tax 

across all TPT classifications, in accordance with A.R.S. § 42-6106(B).

C. The Tiered-Rate Structure for Retail Sales is a Permissible 

“Modified Rate” Within the Meaning of A.R.S. § 42-6106(C).

¶23 Vangilder and ADOR argue the Prop 417 tax’s tiered-rate 

structure for retail sales is not a permissible “variable or modified rate” 

within the meaning of A.R.S. § 42-6106(C). That section directs ADOR to 

“collect the tax at a variable rate if the variable rate is specified in the ballot 

proposition [and] at a modified rate if approved by a majority of the 

qualified electors voting.” Id.

¶24 Vangilder contends that a modified rate is one that changes

an existing rate, but he cites no authority supporting this contention. 

Because the term “modified rate” appears nowhere else in Arizona’s tax 

code, we will apply the “natural, obvious, and ordinary meaning as 

understood and used by the people.” Circle K Stores, Inc. v. Apache Cty., 199 

Ariz. 402, 406, ¶ 11 (App. 2001) (citing Airport Props. v. Maricopa Cty., 195 

Ariz. 89, 99, ¶ 35 (App. 1999)). “[R]eference to established, respected 

dictionaries is appropriate in determining the commonly accepted meaning 

of words.” Sierra Tucson, Inc. v. Pima Cty., 178 Ariz. 215, 220 (App. 1994) 

(citing State v. Wise, 137 Ariz. 468, 470 (1983)).
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

12

¶25 The New Oxford American Dictionary 1124 (3d ed. 2010) defines 

“modified” as the adjective form of the verb “modify,” to “make partial or 

minor changes to (something), typically so as to improve it or to make it 

less extreme.” Black’s Law Dictionary (11th ed. 2019) likewise defines modify 

as “[t]o make somewhat different; to make small changes to (something) by 

way of improvement, suitability, or effectiveness[;] . . . [t]o make more 

moderate or less sweeping; to reduce in degree or extent; to limit, qualify, 

or moderate.” These definitions are broad in scope and, as applied to 

“rate,” would include almost any type of change to the rate but particularly 

one that, as here, lessens its burden upon the taxpayer.

¶26 Further support for a broad construction of the term 

“modified” can be found in the legislative history of the transportation 

excise tax scheme. When the legislature chose to allow the creation of 

regional transportation authorities, it acknowledged that counties the size 

of Pinal County “possess unique characteristics,” including “[u]nique 

transportation related funding needs generated by the area’s land use, 

topography and environmental quality . . . unmet by any existing 

transportation-specific funding mechanisms.” 1990 Ariz. Sess. Laws, ch. 

380, § 1 (2nd Reg. Sess.). The legislature then determined these needs could 

be met only through “certain unique strategies,” id., including imposition 

of an excise tax at a variable or modified rate, see A.R.S. § 42-6106(C) — an 

option not specified for any other type of county excise tax, see A.R.S. §§ 42-

6103 (general excise tax), -6105 (transportation excise tax in counties with a 

population of 1.2 million persons or more), -6107 (transportation excise tax 

for roads), -6108 (hotel tax), -6109 (jail facilities excise tax), -6110 (electricity 

tax), -6111 (capital projects tax), -6112 (judgment bonds tax).

¶27 Vangilder and ADOR nonetheless suggest that the Prop 417

tax’s tiered-rate structure is invalid because the County lacks the power “to 

modify the legislatively defined tax base in any particular classification.” 

See Maricopa Cty. v. S. Pac. Co., 63 Ariz. 342, 347 (1945) (“The authority to 

levy a tax must be derived from a statutory grant of power.”). They argue 

a county that chooses to enact an excise tax must impose the same tax rate 

on all income earned within any particular business classification, and the 

decision to impose a zero percent rate upon retail sales of a single item of

personal property over $10,000 effectively created an impermissible tax 

classification. They cite no authority to support their assertion, and nothing 

in the plain language of A.R.S. § 42-6106 or the legislative history supports 

such a limitation.4 In fact, as ADOR acknowledges, the law governing 

4 We are aware the legislature considered but did not pass a bill that 

would have expressly approved the tiered-rate structure Pinal County 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

13

Arizona’s TPT contains countless deductions, exemptions, and exclusions, 

and none of them are treated as creating a new TPT classification. Nor is 

the use of the singular term “rate” within A.R.S. § 42-6106 (directing the 

transportation excise tax be collected “[a]t a rate”) determinative; when 

interpreting statutes, “[w]ords in the singular number include the plural” 

and vice versa. A.R.S. § 1-214(B).

¶28 ADOR next argues that the tax rate on income above $10,000 

from the retail sale of any one item is effectively zero, and “is not a tax at 

all, because zero is not a rate.” Thus, ADOR contends the Prop 417 tax 

violates the statutory mandate that a transportation excise tax “shall be

levied and collected” across all business classifications. A.R.S. § 42-6106(B)

(emphasis added). ADOR again cites no authority to support this assertion. 

Moreover, its position is inconsistent with the legislature’s decision to 

impose a zero percent tax rate upon the commercial lease classification — a 

tax that has been in effect for more than twenty years. See 1997 Ariz. Sess. 

Laws, ch. 150, § 75 (1st Reg. Sess.) (adopting a zero percent rate for 

commercial lease classification, now codified at A.R.S. § 42-5010(A)(4)). If 

the legislature sought to prohibit the voters from approving certain types 

or levels of modification to the county transportation excise tax rate, the 

legislature could and should have done so.

¶29 Finally, ADOR, which collects all TPTs imposed by the cities, 

towns and counties in Arizona, argues the tiered-rate structure is confusing 

and will create “administrative chaos” in implementation. ADOR’s fear of 

imminent havoc is unpersuasive. More than twenty Arizona cities and 

towns, including Phoenix and Glendale, have adopted the Model City Tax 

Code, which allows for an identical tiered-rate structure for retail sales.5 See 

voters passed. “[L]egislative history and historical background of an 

enacted statute provides guidance in ascertaining the intent of the 

legislature[, but] this principal has no application to proposed, but 

unenacted, legislation.” City of Flagstaff v. Mangum, 164 Ariz. 395, 401 (1990)

(citing Dupnik v. MacDougall, 136 Ariz. 39, 42 (1983), and State v. Barnard, 

126 Ariz. 110, 112 (App. 1980)) (emphasis in original). Therefore, “[w]e will 

not speculate on the intent of the legislature in failing or refusing to adopt 

clarifying amendments.” Id.

5 The Arizona cities that have adopted a tiered-rate structure for retail 

sales include: Apache Junction, Avondale, Benson, Casa Grande, Coolidge, 

Douglas, Eagar, Eloy, Glendale, Globe, Goodyear, Page, Phoenix, PinetopLakeside, Quartzsite, Safford, San Luis, Superior, Thatcher, Tolleson, 

Wickenburg, Willcox, and Yuma. See City Profile, Model City Tax Code, 
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

14

Ariz. Model City Tax Code § 460(d), 

http://www.modelcitytaxcode.az.gov/articles/S4_460.htm. Moreover, a 

constitutional tax must be applied as written regardless of the difficulties 

ADOR may encounter in its administration. See ADOR v. Ormond Builders, 

Inc., 216 Ariz. 379, 389, ¶¶ 44-45 (App. 2007).

¶30 Accordingly, we conclude that the tiered rate within the 

transportation excise tax approved via Prop 417 does not violate A.R.S. § 42-

6106(C) and does not render the tax invalid.

6

D. The Modified Rate Does Not Violate the U.S. or Arizona 

Constitutions.

¶31 Vangilder argues the tiered-rate structure for retail sales in 

the Prop 417 tax violates constitutional equal protection guarantees and 

constitutes an illegal special law. We review constitutional challenges de 

novo. See Gallardo v. State, 236 Ariz. 84, 87, ¶ 8 (2014). In doing so, we 

presume a measure is constitutional unless proven otherwise beyond a 

reasonable doubt. See J. C. Penney, 125 Ariz. at 472 (citing Shaw v. State, 8 

Ariz. App. 447, 452 (1968)).

¶32 The U.S. and Arizona Constitutions guarantee equal 

protection of the law. See U.S. Const. amend. XIV, § 1 (“No state shall . . . 

deny to any person within its jurisdiction the equal protection of the 

laws.”); Ariz. Const. art. 2, § 13 (“No law shall be enacted granting to any 

citizen, class of citizens, or corporation other than municipal, privileges or 

immunities which, upon the same terms, shall not equally belong to all 

citizens or corporations.”). “[F]or all practical purposes,” the equal 

protection analysis is the same under the Arizona and U.S. Constitutions. 

Valley Nat’l Bank of Phx. v. Glover, 62 Ariz. 538, 554 (1945). 

¶33 A tax statute is not unconstitutional simply because it does 

not impose an identical burden on all taxpayers; “if there is a rational basis 

for the classification, there is no constitutional infirmity.” State v. Levy’s, 

119 Ariz. 191, 192 (1978). “In determining whether a statute meets the 

(Nov. 18, 2019), https://www.modelcitytaxcode.az.gov/City_profiles/ 

City_profiles.htm.

6 Because we conclude the tiered-rate structure for retail sales is a 

modified rate authorized within A.R.S. § 42-6106(C), we need not and do 

not address the parties’ arguments regarding the meaning of “variable 

rate.”
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

15

rational basis standard, [courts] must first ascertain whether the challenged 

legislation has a legitimate purpose and then determine if it is reasonable 

to believe that the classification will promote that purpose.” Big D Constr. 

Corp. v. Court of Appeals, 163 Ariz. 560, 566 (1990) (citations omitted).

Rational basis review “is especially deferential in the context of 

classifications made by complex tax laws.” Nordlinger v. Hahn, 505 U.S. 1, 

11 (1992); accord City of New Orleans v. Dukes, 427 U.S. 297, 303 (1976).

¶34 Vangilder asserts the County proposed the tiered-rate 

structure for retail sales at the urging of businesses that sell high-priced 

retail items, such as cars, farming equipment, and recreational vehicles, 

who feared the transportation excise tax would drive buyers to neighboring 

counties to make their high-dollar purchases.7 The County, however, has a 

legitimate interest in encouraging sales and other economic activity within 

its jurisdiction. See State ex rel. ADOR v. Dillon, 170 Ariz. 560, 569 (App. 

1991) (recognizing a “legitimate governmental interest in raising 

revenues”); cf. Flagstaff Vending Co. v. City of Flagstaff, 118 Ariz. 556, 560 

(1978) (“[A] government may validly ‘foster what it conceives to be a 

beneficent enterprise.’”) (quoting Carmichael v. S. Coal & Coke Co., 301 U.S. 

495, 512 (1937)). A partial reduction in the tax rate upon certain business 

transactions is a rational way to encourage sales and promote economic 

activity. See Levy’s, 119 Ariz. at 191-92 (finding no equal protection violation 

in a statute exempting TPT upon sales under $1,000 to Mexican residents 

with proper documentation within thirty miles of the Mexican border 

where its purpose was to “bring back business to the areas”); see also

Minneapolis Star & Tribune Co. v. Minn. Comm’r of Revenue, 460 U.S. 575, 581-

82 (1977) (noting a use tax “eliminat[es] the incentive to make major 

purchases in [s]tates with lower sales taxes”).

¶35 For example, without the tiered-rate structure, an Apache 

Junction resident in the market for a $500,000 motor home could avoid 

paying $2,500 in Pinal County TPT by driving a short distance to buy the 

same motor home in the Phoenix metropolitan area. The County could 

reasonably believe that this resident is unlikely to spend the time, gas, and 

7 Vangilder asserts that the Prop 417 tax grants consumers purchasing 

single high-dollar items a benefit not available to those buying lower-cost 

items. But “[t]he legal incidence of the transaction privilege tax is on the 

seller.” J. C. Penney, 125 Ariz. at 472. The retailer may choose to pass the 

cost on to consumers, see Ariz. State Tax Comm’n v. Garrett Corp., 79 Ariz. 

389, 393 (1955), but that choice confers no legal rights on the consumer, 

Karbal, 215 Ariz. at 118, ¶ 18. Therefore, we only consider the application 

of the Prop 417 tax on retailers.
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

16

energy to travel out-of-county, however, if the tax applies only to the first 

$10,000 of the sale and totals only $50. In addition, retailers who lose highdollar sales to neighboring counties might decide to relocate outside the 

County, causing a further decrease in revenue. Moreover, the tiered-rate 

tax does not differentiate between the locations of business or types of 

tangible property offered for sale; it applies equally to all retailers. See Gila 

Meat Co. v. State, 35 Ariz. 194, 202 (1929) (invalidating tax upon 

slaughterhouses that varied by location because the tax was not equal and 

uniform). Accordingly, we conclude the tiered-rate structure for retail sales 

adopted within Prop 417 is rationally related to a legitimate government 

purpose and does not violate equal protection.8

¶36 The Arizona Constitution also prohibits enactment of any 

“local or special laws [regarding the] . . . [a]ssessment and collection of 

taxes.” Ariz. Const. art. 4, pt. 2, § 9. A statute is a not a special law if: 

“(1) there is a rational basis for the classification; (2) the classification is 

legitimate, encompassing all members of the relevant class; and (3) the class 

is flexible, allowing members to move into and out of the class.” State Comp.

Fund v. Symington, 174 Ariz. 188, 193 (1993) (citing Republic Inv. Fund I v. 

Town of Surprise, 166 Ariz. 143, 148-49 (1990), and Ariz. Downs v. Ariz. 

Horsemen’s Found., 130 Ariz. 550, 557-58 (1981)). “If one of these three 

requirements is not met, the legislation is invalid.” Id. (citing Republic Inv., 

166 Ariz. at 149).

¶37 The first prong of the special-law test “is identical to that 

required for equal protection analysis.” Gallardo, 236 Ariz. at 88, ¶ 12. We 

have already determined that the County had a rational basis to treat sales 

of high-priced retail items differently. See supra ¶ 34. The Arizona 

Constitution also requires the classification be legitimate and flexible. 

Republic Inv., 166 Ariz. at 148, 150. Vangilder concedes these points through 

his silence. Moreover, the tiered-rate structure applies equally to all 

retailers selling single items of tangible personal property over $10,000, and 

8 Although Vangilder contends the tiered-rate structure was in fact 

proposed “to avoid political opposition from powerful businesses,” he fails 

to meet his burden, as “the one attacking tax legislation[,] to negate every 

conceivable basis which supports it.” Tucson Newspapers, Inc. v. City of 

Tucson, 172 Ariz. 378, 384 (App. 1992) (quotation omitted).
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

17

there is no restriction on who can join or leave the class.9 Therefore, Prop 

417 is not an unconstitutional special law.

II. Vangilder is Not Entitled to an Award of Attorneys’ Fees.

¶38 In his cross-appeal, Vangilder argues the tax court abused its 

discretion in denying his request for an award of attorneys’ fees under the 

private attorney general doctrine. See Cave Creek Unified Sch. Dist. v. Ducey, 

231 Ariz. 342, 353, ¶ 34 (App. 2013) (explaining the private attorney general 

doctrine permits a discretionary award of fees to a party that has vindicated 

an important public right) (citing Arnold v. Ariz. Dep’t of Health Servs., 160 

Ariz. 593, 609 (1989)). Because we reverse the court’s order granting relief

to Vangilder, he is not eligible for an award of fees. Therefore, the order 

denying fees is affirmed.

9 Vangilder raises several arguments for the first time in his reply brief 

that need not be considered. See Deutsche Bank Nat’l Tr. Co. v. Pheasant Grove 

L.L.C., 245 Ariz. 325, 330, ¶ 17 n.5 (App. 2018) (citing Tucson Estates Prop. 

Owners Ass’n v. McGovern, 239 Ariz. 52, 55, ¶ 11 n.4 (App. 2016)). 

Nonetheless, he cites no authority to support his suggestion that we should 

compare the effects of the tax on retailers to its effects on businesses that are 

not similarly situated — i.e., those subject to tax under a different 

classification. Nor are we persuaded that the $10,000 single-item cap is 

arbitrary. As detailed in ¶ 35, the $10,000 limit is designed to result in a $50 

maximum tax — an amount deemed de minimis enough to discourage 

purchasers of high-dollar items from leaving the County to avoid the tax. 

Finally, that the County could have crafted the excise tax to encompass 

other high-dollar transactions, such as those involving multiple items 

totaling $10,000, to a similar end, is immaterial; the County is not required 

to choose the most effective means of achieving its goals so long as the 

means it chooses has some conceivable rational basis. See State v. 

Hammonds, 192 Ariz. 528, 532, ¶ 15 (App. 1998) (citing Ohio Bureau of Emp’t 

Servs. v. Hodory, 431 U.S. 471, 491 (1977)).
VANGILDER, et al. v. PINAL COUNTY, et al.

Opinion of the Court

18

CONCLUSION

¶39 The tax court’s order invalidating the Prop 417 tax is reversed, 

and its order denying Vangilder’s request for attorneys’ fees and costs is 

affirmed.