Saban Rent-A-Car LLC v. Ariz. Dep't of Revenue, 246 Ariz. 89

Summary

The Arizona Supreme Court held that Maricopa County's surcharge on car-rental agencies does not violate the dormant Commerce Clause or Arizona's constitutional anti-diversion provision. The court concluded that the surcharge was imposed evenhandedly and that revenues from it were not derived from fees, excises, or license taxes relating to the operation or use of vehicles on public highways. The court reversed and remanded, while affirming the court of appeals' judgment in favor of the Arizona Department of Revenue and the Tourism and Sports Authority.

Holdings

1. The car-rental surcharge does not violate the dormant Commerce Clause because it is imposed evenhandedly on resident and nonresident car-rental agencies and customers without differentiating between in-state and out-of-state economic interests. The fact that nonresident visitors may bear most of the economic burden does not establish discriminatory intent.
2. The car-rental surcharge does not constitute a fee, excise, or license tax relating to the operation or use of vehicles on public highways or streets. The phrase refers to taxes or fees imposed as a prerequisite to, or triggered by, the legal operation or use of a vehicle on a public road; a surcharge imposed on the business of renting vehicles does not meet that definition.

Questions Presented

1. Whether the car-rental surcharge was enacted with discriminatory intent or otherwise violated the dormant Commerce Clause.
2. Whether the surcharge was a fee, excise, or license tax relating to the operation or use of vehicles on public highways or streets under article 9, section 14 of the Arizona Constitution, such that its revenues had to be spent on highway and street purposes.

Disposition

reversed_and_remanded