Abstract
This Note examines the Arizona transaction privilege taxation scheme in light of the doctrine of federal immunity. The first section outlines the principle of federal immunity from state taxation from its origins through its contemporary interpretation and application. It shows how current judicial interpretation of federal immunity is often confusing and lacking in continuity, but it suggests that the most conclusive test looks at the economic consequences of the practical operation of the taxing scheme. The next section applies the tests suggested by the caselaw under the Arizona statute. This Note concludes that under current law, the Arizona tax improperly taxes the federal government when the federal government is the purchaser of prime contracting in Arizona. Finally, this Note offers an alternative to the current taxing scheme which neither violates the immunity of the federal government nor results in a reduction in revenue to the state.
How to Cite
34 Ariz. L. Rev. 615 (1992)
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