Phoenix Rental Companies Challenge $34M in Taxes

The rental car taxes were helping to make debt payments on the University of Phoenix football stadium. Photo via Wikimedia.
The rental car taxes were helping to make debt payments on the University of Phoenix football stadium. Photo via Wikimedia.

Rental car companies are looking to get a refund of a tax collected by the city of Phoenix, according to a report by the Associated Press. These rental companies won a court order for the return of about $150 million in taxes from a fund that pays for the University of Phoenix stadium.

The Arizona Sports and Tourism Authority depends on revenue from the 3.25% rental car tax to make debt payments on the University of Phoenix stadium as well as to promote tourism and pay for Cactus League stadiums.

The rental companies are seeking a refund of money that they have paid in sales taxes over the past four years, according to the report. An Arizona judge ruled that the rental car tax went against a state constitutional provision. Taxes imposed on the use of vehicles — on public streets — are restricted to funding road construction, maintenance, and related purposes.

Three rental companies are involved and paid about $200,000, but the city of Phoenix has collected more than $34 million from its rental car tax since 2012, according to the report.

The claim was filed last week for the companies by attorney Shawn Aiken. The claim could expand into a class-action case, says the report.

Click here for the full Associated Press report.

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