The Town of Gilbert is facing a lawsuit from the Goldwater Institute hoping to scrap its recent tax hikes.
The town upped its sales tax to 2% from 0.5%. In addition, the tax for lodging was hiked to 5%, and there is now a 2% tax for certain e-commerce circumstances.
“The Arizona Constitution prohibits 'any county, city, town, municipal corporation, or other political subdivision of the state, or any district created by law' from imposing or increasing any transaction-based tax on the 'privilege to engage in, or the gross receipts of sales or gross income derived from, any service performed in this state,’” the complaint from the conservative think tank argues.
The lawsuit is being filed for short-term rental owner Jonathan Barth and the Home Builders Association of Central Arizona.
“This tax hike makes it all the more difficult to make ends meet in Gilbert,” Barth said in a statement. The institute noted that Barth has an STR on his property that he uses as “supplemental income” as he’s a teacher.
Meanwhile, HBACA CEO Jackson Moll raised concerns that the taxes would add hurdles to the construction sector.
