A conservative group is suing the town of Gilbert over what they argue is an illegal tax on services.
New Gilbert tax rates went into effect on Jan. 1, despite warnings from the Goldwater Institute that the tax hikes violate state law.
The fundamental issue is a debate over whether the tax is on goods or services.
In 2018, Arizona voters approved a ballot measure called Proposition 126. It bans municipalities like Gilbert from raising or creating service taxes.
But “services” isn’t a clearly defined term. And Gilbert officials told the Goldwater Institute months ago that the conservative think tank is misreading state law.
The dispute is now for the Maricopa County Superior Court to decide. The case is officially being brought on behalf of a Gilbert resident and the Home Builders Association of Central Arizona.
The plaintiffs, represented by the Goldwater Institute, are asking the court to enjoin Gilbert from levying the new taxes.
The tax hikes are meant to pay for a variety of things, including public safety, parks and infrastructure. Goldwater officials have seized on those intended uses by labeling the tax hike as the “pickleball tax.”
