State v. Tunkey
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The Supreme Court held that the Arizona Department of Revenue (ADOR) is not required to assess the money collected from a taxpayer-business's customers to cover transaction privilege taxes against the responsible person pursuant to Ariz. Rev. Stat. 42-1104(A) before filing a collection lawsuit.
ADOR brought suit against Peter Tunkey and his wife (together, Tunkey) to recover unpaid transaction privilege taxes (TPTs) pursuant to Ariz. Rev. Stat. 42-5028, which imposes liability on a "person" for failing to remit to ADOR any "additional charge" made to cover the tax. The tax court granted Summary judgment for ADOR and entered judgment against Tunkey for $26,000 in unpaid TPTs. Tunkey appealed, arguing that the tax court erred in ruling that ADOR was not required to timely assess the $26,000 amount against him personally before filing suit. The Supreme Court affirmed, holding that section 42-1104(A) did not require ADOR to notify Tunkey of "additional taxes due" because the unpaid TPT charges did not constitute an "additional tax due" triggering section 42-1104(A)'s notice requirement.
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