PHOENIX — Arizona Attorney General Mark Brnovich has reached a settlement with the city of Tempe to settle a lawsuit alleging the city used improper tax breaks for private developments.
The settlement with Tempe resolves a May 2018 lawsuit filed by Brnovich that stemmed from an investigation requested from Arizona House of Representative member Vince Leach. The Attorney General's Office alleged the city illegally used the Government Property Lease Excise Tax (GPLET), which had been eliminated in 2010 by the Arizona Legislature.
“Tax deals like this unfairly shift the tax burden to other hardworking taxpayers and deprive our schools from much needed revenue," Brnovich said in a statement. “This settlement gives the state the total relief sought in the suit, without the expense of ongoing litigation."
According to the Attorney General's Office, Tempe is prohibited from using the "tax loophole scheme" on new leases. This is designed to keep the city from extending the terminated rate to its pending projects such as a Whole Foods market and an apartment complex.