Vangilder v. Pinal County ( 2020 )


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  •                                    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    HAROLD VANGILDER, et al., Plaintiffs/Appellees/Cross-Appellants,
    v.
    ARIZONA DEPARTMENT OF REVENUE, Defendant/Appellee/Cross-
    Appellee,
    PINAL COUNTY, et al., Defendants/Appellants/Cross-Appellees.
    No. 1 CA-TX 19-0001
    FILED 1-16-2020
    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
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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
    2
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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.
    3
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    “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
    4
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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]”).
    5
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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)).
    6
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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 twenty-
    year 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
    7
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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
    8
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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 tiered-
    rate 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. 9
                   VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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
    10
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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)).
    11
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    ¶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
    12
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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, Pinetop-
    Lakeside, Quartzsite, Safford, San Luis, Superior, Thatcher, Tolleson,
    Wickenburg, Willcox, and Yuma. See City Profile, Model City Tax Code,
    13
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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.”
    14
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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.
    15
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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 high-
    dollar 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).
    16
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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)).
    17
    VANGILDER, et al. v. PINAL COUNTY, et al.
    Opinion of the Court
    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.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    18