State v. Tunkey

IN THE

SUPREME COURT OF THE STATE OF ARIZONA

STATE OF ARIZONA, EX REL., ARIZONA DEPARTMENT OF REVENUE,
Plaintiff/Appellee,

v.

PETER A. TUNKEY, ET AL.,
Defendants/Appellants.

No. CV-22-0128-PR
Filed February 23, 2023

Appeal from the Arizona Tax Court
The Honorable Danielle J. Viola, Judge
No. TX2019-000451

AFFIRMED

Memorandum Decision of the Court of Appeals,
Division One
No. 1 CA-TX 21-0006
Filed April 19, 2022

AFFIRMED

COUNSEL:

Kristin K. Mayes, Arizona Attorney General, Penny Taylor Moore (argued),
Assistant Attorney General, Phoenix, Attorneys for Arizona Department of
Revenue

Paul J. Valentine (argued), Jared W. Miller, Quarles & Brady LLP, Phoenix,
Attorneys for Peter A. Tunkey, et al.
 STATE V. TUNKEY, ET AL.
Opinion of the Court

VICE CHIEF JUSTICE TIMMER authored the Opinion of the Court, in
which CHIEF JUSTICE BRUTINEL and JUSTICES BOLICK, LOPEZ,
BEENE, MONTGOMERY, and KING joined. JUSTICE BOLICK, joined by
JUSTICES BEENE, MONTGOMERY, and KING authored a concurring
opinion.

VICE CHIEF JUSTICE TIMMER, Opinion of the Court:

¶1 This case follows in the wake of Arizona Department of Revenue
v. Action Marine, Inc., 218 Ariz. 141, 146–47 ¶¶ 28–29 (2008), which
interpreted A.R.S. § 42-5028 as imposing liability on responsible persons
who fail to remit to the Arizona Department of Revenue (“ADOR”) money
collected from a taxpayer-business’s customers to cover transaction
privilege taxes. The issue here is whether ADOR must assess this amount
against the responsible person pursuant to A.R.S. § 42-1104(A) before filing
a collection lawsuit. We conclude it does not.

BACKGROUND

¶2 The transaction privilege tax (“TPT”) “is an excise tax on the
privilege or right to engage in an occupation or business.” Action Marine,
218 Ariz. at 142 ¶ 6 (quoting Ariz. Dep’t of Revenue v. Mountain States Tel. &
Tel. Co., 113 Ariz. 467, 468 (1976)). It is not a sales tax but instead a tax on
a business’s gross receipts. Id. Although liability for the TPT falls on the
business, it may charge customers a separately itemized amount to cover
the tax. See id. ¶ 7; see also A.R.S. §§ 42-5002(A)(1), -5024. The business
must remit to ADOR all money collected from customers for TPT, even if
that amount exceeds what is owed. Action Marine, 218 Ariz. at 142 ¶ 7;
§ 42-5002(A)(1).

¶3 Matthew Kievit and Peter Tunkey formed KT McClintock,
LLC (“KT”) in 2005 and served as managing members. KT did business
as Silver Mine Subs, a franchised sandwich shop. As relevant here, KT
collected money from customers to cover its TPT obligation during various
months in 2010 and 2012. The parties do not dispute that KT filed TPT
returns for the relevant periods and self-assessed the amounts owed; ADOR

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

accepted those filings without disputing the amounts owed; and KT failed
to remit about $26,000 of those amounts to ADOR.
¶4 Through Tunkey, KT negotiated payment arrangements with
ADOR and paid the TPT owed for 2010 and 2012, except for the $26,000 at
issue. Tunkey moved to Georgia in 2013 and stopped serving as a
managing member for KT in 2015. ADOR never assessed taxes against
Tunkey personally or notified him that he was personally liable for KT’s
unpaid TPTs.

¶5 In 2019, ADOR sued KT, Kievit, Tunkey, and the individual
parties’ spouses to recover unpaid TPTs. See A.R.S. § 42-1114(A)
(authorizing ADOR to file suit to recover the amount of any taxes “owed
by the taxpayer to the department that are due and unpaid”). The tax
court entered default judgments against KT and the Kievits. Only
ADOR’s suit against Tunkey and his wife (collectively, “Tunkey”) is before
us.

¶6 ADOR sought the $26,000 in unpaid TPTs from Tunkey
pursuant to § 42-5028. That statute imposes liability on a “person” for
failing to remit to ADOR “any additional charge made to cover the tax.”
§ 42-5028. In Action Marine, this Court interpreted “additional charge” as
meaning the entire amount collected from a business’s customers to cover
the TPTs. 218 Ariz. at 145 ¶ 23. We also concluded that a “person” may
include a taxpayer’s corporate officers, directors, and other responsible
persons having a duty to remit that money to ADOR. Id. at 146–47
¶¶ 28–29.

¶7 Eventually, ADOR and Tunkey filed cross-motions for
summary judgment. Tunkey argued (1) ADOR failed to assess the unpaid
TPTs against him personally within the four-year limitation period
provided by § 42-1104(A), making ADOR’s suit untimely; and (2) ADOR
failed to establish that Tunkey was in fact a “responsible person” under
§ 42-5028. ADOR asserted (1) it was not required to separately assess the
TPTs against Tunkey, so § 42-1104 was inapplicable, and the ten-year
limitation period provided by § 42-1114(C) applied, making ADOR’s suit
timely; and (2) Tunkey was a “responsible person” under § 42-5028.

¶8 The tax court denied Tunkey’s motion, granted ADOR’s
motion, and entered judgment against Tunkey for the $26,000 in unpaid
TPTs. The court of appeals affirmed. State ex rel. Ariz. Dep’t of Revenue v.
Tunkey, No. 1 CA-TX 21-0006, 2022 WL 1146398, at *1 ¶ 1 (Ariz. App. Apr.

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

19, 2022) (mem. decision). We accepted review of Tunkey’s petition
because it presents an issue of recurring statewide importance. We have
jurisdiction pursuant to article 6, section 5(3) of the Arizona Constitution.

DISCUSSION

I.

¶9 We are asked to decide a single issue. Tunkey does not ask
us to revisit Action Marine’s interpretation of § 42-5028, dispute he is a
“responsible person” under that provision, nor contest the $26,000
calculation. Instead, he challenges only the tax court’s ruling that ADOR
was not required to timely assess the $26,000 amount against him
personally before filing suit. We review de novo the court’s ruling “and
its interpretation of Arizona’s tax statutes.” See SolarCity Corp. v. Ariz.
Dep’t of Revenue, 243 Ariz. 477, 480 ¶ 8 (2018).

II.

A.

¶10 Section 42-1104(A) provides, in relevant part, as follows:

For the taxes to which this article applies, every notice of
every additional tax due shall be prepared on forms
prescribed by the department and mailed within four years
after the report or return is required to be filed or within four
years after the report or return is filed, whichever period
expires later.

(Emphasis added.)

¶11 Tunkey argues that responsible-person liability under
§ 42-5028 is separate from taxpayer-business liability, and therefore the
unpaid TPT charges sought from him constitute an “additional tax due”
that triggered § 42-1104(A)’s notice requirement. Because § 42-1114(A)
authorizes ADOR to collect only taxes “due and unpaid,” and ADOR failed
to notify Tunkey of a tax assessment within the four-year limitation period,
he contends the TPT charges were never “due” from him, and the tax court
therefore erred by entering judgment for ADOR.

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

¶12 We reject Tunkey’s argument for two reasons. First,
§ 42-1104(A) is inapplicable because ADOR seeks only to collect the amount
self-assessed by KT. That statute concerns only an “additional tax due,”
which plainly refers to unreported or underreported taxes. See
§ 42-1104(A). Specifically, the statute presupposes the taxpayer failed to
report liability for these taxes in a “report or return.” See id. Indeed, in
prescribing exceptions to § 42-1104(A), subsection (B) refers to the required
notice as a “deficiency assessment.” § 42-1104(B). And the audit and
deficiency calculation procedures culminating in the deficiency assessment
notice apply only to unreported or underreported tax liability. A.R.S.
§ 42-1108(A) (authorizing ADOR to conduct audits within § 42-1104’s time
periods if a taxpayer fails to file a return or ADOR is not satisfied with the
return or payment amount “to determine the correct amount of tax”).
Here, KT self-assessed the amounts owed for TPT charges in a return,
making that amount immediately due. See Ariz. Dep’t of Revenue General
Tax Ruling 04-1 at 2 (2004) (“GTR 04-1”) (stating taxes become due on the
date a tax return establishes liability). ADOR accepted KT’s assessment
and sued only to collect those amounts. Consequently, § 42-1104(A) did
not require ADOR to notify KT or Tunkey of “additional taxes due” because
none existed.

¶13 Second, because the “additional charge[s]” Tunkey owes
under § 42-5028 are the same as those self-assessed by KT, they do not
constitute an unreported “additional tax due” under § 42-1104(A).
Section 42-5028 itself states that the “additional charge” is one “made to
cover the [TPT].” See Action Marine, 218 Ariz. at 145 ¶ 23. Similarly,
§ 42-5002(A)(1) requires a business that “imposes an added charge to cover
the [TPT]” to remit the collected charges to ADOR. Rather than
establishing that the unpaid “additional charge” is an “additional tax due”
under § 42-1104(A), as Tunkey argues, § 42-5028 simply imposes
concurrent liability on Tunkey for the money collected from KT’s customers
to cover the TPTs.

B.

¶14 Tunkey relies on Action Marine’s characterization of liability
under § 42-5028 as “non-derivative” of taxpayer-business liability to
support the contention that the charges owed by KT and Tunkey are
different. See 218 Ariz. at 146–47 ¶ 28. But the Court made this
characterization to explain why a responsible person under § 42-5028 is

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

liable only for an unremitted “additional charge” and not interest, costs, or
penalties, which are not mentioned in that provision, as would be the case
for liability based on a derivative, alter ego theory. Id.; see also Specialty
Cos. Grp., LLC v. Meritage Homes of Ariz., Inc., 251 Ariz. 365, 366 ¶ 1 (2021)
(characterizing alter ego claims as “derivative in nature”). Viewed in this
context, the Court did not use “non-derivative” as meaning that an
“additional charge” under § 42-5028 is something other than the amounts
charged to a taxpayer-business’s customers to cover TPTs and consequently
owed by that taxpayer. See § 42-5002(A)(1). Indeed, partial remittance of
these charges by the taxpayer-business would reduce the amount owed by
responsible persons under § 42-5028. The charges owed to ADOR by
Tunkey and KT, excepting penalties, costs, and interest, are identical.

C.

¶15 Relatedly, we reject Tunkey’s chicken-and-egg assertion that
§ 42-1114(A) does not authorize collection of TPT charges “due and
unpaid” here because ADOR failed to establish through a pre-lawsuit
assessment that Tunkey owed this money. The TPT charges were “due
and unpaid” under § 42-1114(A) because KT self-assessed the collected
charges but did not remit that money to ADOR, see GTR 04-1 at 2, and
§ 42-5028 imposed liability for that money on Tunkey as a responsible
person. The lawsuit itself served as the mechanism for establishing
Tunkey’s liability; there is no statutory requirement to assess TPT charges
against Tunkey to establish liability under § 42-5028. And although, as
Tunkey contends, the lack of assessment meant he could not file an
administrative appeal, he does not assert that this circumstance prejudiced
his rights. See A.R.S. § 42-1251(A) (authorizing administrative appeals
after notice of assessment).

D.

¶16 Our interpretation of the interplay between § 42-1104(A) and
§ 42-5028 is not inconsistent with Arizona’s business law, as Tunkey argues.
See A.R.S. § 29-3304(A) (providing that members of a limited liability
company are not personally liable for the company’s debts or liability).
Liability imposed by § 42-5028 results from a person’s failure to fulfill a
duty to remit TPT charges collected from a taxpayer-business’s customers
and not from a person’s role as managing member of a limited liability
company. See Action Marine, 218 Ariz. at 147 ¶ 29. Indeed, a person
without an ownership interest in the company can be liable under

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

§ 42-5028. See id. at 146–47 ¶¶ 28–29 (concluding “person” may include
corporate officers, directors, or other responsible persons).

E.

¶17 Tunkey argues we should be guided by the court of appeals’
decision in Video Stop, Inc. v. Arizona Department of Economic Security,
189 Ariz. 1 (App. 1996), which concerned successor-employer liability for
unpaid unemployment taxes. See A.R.S. § 23-733(D) (imposing successor
liability). There, the court held that A.R.S. § 23-743(A) requires the
Arizona Department of Economic Security to “determine” within a three-
year period any delinquency amount and issue “a collection notice and a
statement of unpaid predecessor taxes” before the department can sue to
collect those taxes from a successor-employer. Video Stop, 189 Ariz. at 4.
Because the department did not provide that notice to the successor-
employer there, the department was time-barred from pursuing its
collection action. Id.

¶18 Video Stop does not support interpreting § 42-1104 as
requiring ADOR to notify Tunkey of the “additional tax due.” First, that
provision, unlike § 23-743(A), does not require ADOR to “determine”
uncontested, self-assessed tax liability. See Part II(A). Second, Video Stop
did not state that § 23-743(A) requires separate notice to a successor-
employer if the predecessor was notified, making that case even less
analogous to the one here. The department in Video Stop failed to give
notice to anyone within the three-year limitation period. Video Stop,
189 Ariz. at 2. Presumably, if the predecessor-employer had been timely
notified of the amount due, Video Stop would have permitted the
department’s suit. Cf. § 23-733(E) (obligating the department to fulfill the
successor-employer’s request to specify the amount due from the
predecessor-employer at the time of acquisition).

F.

¶19 The non-Arizona cases Tunkey cites do not persuade us to
reach a different conclusion. The relevant statutes in those cases either
differ significantly from § 42-1104(A) by specifically requiring assessments
against responsible persons, see Ceccarelli v. Levin, 938 N.E.2d 342, 344 ¶ 8
(Ohio 2010), or the courts interpreted their provisions in a manner not
supported by our statute’s wording, see Jones v. United States, 60 F.3d 584,
589 (9th Cir. 1995); Bonedaddy’s of Lee Branch, LLC v. City of Birmingham,

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 STATE V. TUNKEY, ET AL.
Opinion of the Court

192 So. 3d 1151, 1160–61 (Ala. 2015); Garland v. Dir. of Revenue, 961 S.W.2d
824, 828–29 (Mo. 1998); Basch v. N.Y. State Tax Comm’n, 134 A.D.2d 786, 788
(N.Y. App. Div. 1987).

G.

¶20 Finally, although we are sympathetic to Tunkey’s assertion
that permitting ADOR to sue under § 42-1114(A) to establish a responsible
person’s liability under § 42-5028 could be unfair if evidence pertaining to
liability has been lost before expiration of the ten-year limitation period for
these claims, we are not persuaded to change our interpretation of
§ 42-1104(A). This is a policy argument for the legislature to address in
deciding whether responsible persons should be separately assessed within
a specified timeframe before imposing liability on them under § 42-5028.
Regardless, we note that absent evidence of responsible-person liability,
ADOR likely would be unable to prevail under § 42-5028. See A.R.S.
§ 42-1255 (placing burden of proof on ADOR). And notably, Tunkey does
not assert that evidence here was lost.

CONCLUSION

¶21 We affirm the court of appeals’ decision and the tax court’s
judgment. Because Tunkey is not the prevailing party, we deny his
request for attorney fees under A.R.S. § 12-348.

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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY, and
KING, concurring.

¶22 We join entirely the Court’s opinion resolving the narrow
issue presented to us. We write separately to urge that, when appropriate
in a future case and consistent with stare decisis principles, we should
entertain reconsideration of Arizona Department of Revenue v. Action Marine,
218 Ariz. 141 (2008), the jurisprudential lodestar in this area of law that
potentially exposes TPT liability to persons who are not placed on clear
statutory notice that they may be personally responsible for it.

A.

¶23 Action Marine’s troubling holding owes, at least in part, to the
conceptual inconsistency in the way our Court approaches statutory
interpretation. In Action Marine, the Court stated that “[o]ur primary
goal” in statutory interpretation “is to ‘discern and give effect to legislative
intent,’” 218 Ariz. at 143 ¶ 10 (citation omitted), a formulation we have
repeated in many subsequent cases. See, e.g., Premier Physicians Grp., PLLC
v. Navarro, 240 Ariz. 193, 195 ¶ 9 (2016); State v. Jurden, 239 Ariz. 526, 530
¶ 15 (2016); Rasor v. Northwest Hosp., LLC, 243 Ariz. 160, 164 ¶ 20 (2017). In
other cases, by contrast, we have stated that “[s]tatutory interpretation
requires us to determine the meaning of the words the legislature chose to
use,” S. Ariz. Home Builders Ass’n v. Town of Marana, 522 P.3d 671, 676 ¶ 31
(Ariz. 2023), according to their original public meaning and broader
statutory context. Matthews v. Indus. Comm’n, 520 P.3d 168, 174 ¶ 29 (Ariz.
2022). We will refer to the first formulation of statutory interpretation as
“legislative intent” and the second as “plain meaning.”

¶24 These two methodologies sound superficially similar and in
most cases lead to identical and proper outcomes. But the majority and
dissenting opinions in Action Marine illustrate that the divergent
approaches can produce different outcomes and underscore why we
should cogently and consistently apply a plain meaning approach to
statutory interpretation going forward.

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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

¶25 The legislative intent approach views the words of a statute
as a means of determining what the legislature intended. 1 Indeed, in some
cases we have remarked that the “statute’s text is the best evidence of that
intent . . . .” Jenkins v. Hale, 218 Ariz. 561, 563 ¶ 10 (2008); accord SolarCity
Corp. v. Ariz. Dep’t of Revenue, 243 Ariz. 477, 480 ¶ 8 (2018) (“The best
indicator of that intent is the statute’s plain language . . . .”).

¶26 With due respect to opinions that employed or cited such
language, the words of a statute are not “evidence” of anything. They are
the law. Our oath as judges does not send us on a cosmic search for
legislative intent. It requires us to “support the . . . Constitution and laws
of the State of Arizona.” A.R.S. § 38-231(E); accord Ariz. Const. art. 6, § 26.

¶27 Legislative intent is at best amorphous and at worst illusory.
In most cases, the words of a statute are the only thing to which the
legislature agreed. Legislators may have multiple intentions in enacting
particular words, and often those words are changed by later legislatures.
The quest is inherently subjective and therefore corrosive of the rule of law,
for it licenses judges to credit not what the legislature said through the
words it enacted but what it meant to say. It also invites imprecision in
legislative drafting if we appear to be at the ready to rescue a poorly drafted
statute with a sharpened blue pencil. If the legislature agrees on findings,
purposes, or definitions, it becomes our duty to ascertain statutory meaning
through those prisms. See, e.g., S. Ariz. Home Builders Ass’n, 522 P.3d at 676
¶ 31 (applying a narrow construction as commanded by statutory
language). And as a secondary interpretative device, legislative history can
often help illuminate statutory meaning. See, e.g., Rasor, 243 Ariz. at 164
¶ 20 (“Where the meaning is unclear from language and context, we may
employ secondary tools, such as considering legislative history . . . .”).
But legislative intent properly understood is only a means to discern
statutory meaning and never an object in itself. See, e.g., Conroy v. Aniskoff,
507 U.S. 511, 519 (1993) (Scalia, J., concurring) (“We are governed by laws,
not by the intentions of legislators.”). We exceed our limited

1 To be sure, we have sometimes book-ended that approach by
admonishing that “’[w]hen the plain text of a statute is clear and
unambiguous,’ it controls unless an absurdity or constitutional violation
would result.” Cox v. Ponce, 251 Ariz. 302, 307 ¶ 18 (2021). But we do not
always note that caveat, and the Court did not do so in Action Marine.
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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

constitutional authority when we displace plain meaning with legislative
intent.

¶28 The evolution in Arizona jurisprudence of the legislative
intent approach to statutory interpretation is curious. Our territorial
Court emphatically rejected it, recognizing that “it is the duty of all courts
to confine themselves to the words of the Legislature—nothing adding
thereto; nothing demitting.” Flowing Wells Co. v. Culin, 11 Ariz. 425, 429
(1908). “The court has no authority to extend a law beyond the fair and
reasonable meaning of its terms, because of some supposed policy of the
law, or because the Legislature did not use proper words to express its
meaning.” Id.

¶29 A decade later, the Court observed that legislative intent, as
expressly declared by the legislature, “should be the key to the door of what
follows.” Deyo v. Ariz. Grading & Constr. Co., 18 Ariz. 149, 153 (1916). It
explained that “[a]ny unhappy or careless use of words . . . should not be
construed so as to defeat the avowed intention of the law-making body.” Id.
(emphasis added).

¶30 Citing Deyo but extending the rule far beyond its reach, the
Court expressly repudiated a plain meaning approach to statutory
interpretation in State v. McEuen, 42 Ariz. 385, 392–93 (1933). In its place,
the Court adopted two rules of statutory interpretation. “The first and
most important principle . . . is that the intent of the legislature is to be
ascertained and followed.” Id. at 392. “The second . . . is that statutes
shall be liberally construed to effect their objects and to promote justice.”
Id. (citing Ariz. Rev. Code § 3038 (1928)). But see S. Ariz. Home Builders Ass'n,
522 P.3d at 676 ¶ 31 (rejecting this approach). “These principles of
interpretation take precedence over all others,” the Court instructed, “the
remaining rules being merely ancillary and used to assist in the proper
application of the two above set forth.” McEuen, 42 Ariz. at 392.

¶31 This open-ended expression of legislative interpretation
invites judicial mischief. The standard is subjective and skews toward a
broad interpretation of the statute at interest to “promote justice” regardless
of the statute’s objective. The temptation to correct perceived legislative
error or expand statutes beyond their plain meaning can lead the Court to
transgress legislative power.

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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

¶32 We have surely retreated from the expansive interpretative
role assumed for the Court in McEuen. See, e.g., Roberts v. State, 253 Ariz.
259, 266 ¶ 20 (2022) (holding that “courts will not read into a statute
something which is not within the manifest intention of the legislature as
gathered from the statute itself,” and “will not inflate, expand, stretch or
extend a statute to matters not falling within its expressed provisions”
(quoting City of Phoenix v. Donofrio, 99 Ariz. 130, 133 (1965))). But other
decisions, exemplified by Action Marine, suggest we have not yet fully
returned to the wellspring of our proper role enunciated in Flowing Wells.
Instead, we have struck an amorphous middle ground that is consistent in
its inconsistency. We owe it to the parties and advocates who come before
us to tell them what we are looking for when interpreting a statute, and we
should hew to our constitutional boundaries by choosing plain meaning
over legislative intent when the two diverge.

B.

¶33 By contrast, the entirety of the majority opinion in Action
Marine illustrates a search for legislative intent. See 218 Ariz. at 143–46,
¶¶ 12, 13, 16, 18, 25, 27 (depicting what the legislature “meant” or
“intended”). The Court looked in part to what it considered an analogous
provision 2 and to interpretation of similar statutes from different states.
Id. at 144–45 ¶ 18. The majority concluded that notwithstanding its failure

2 That provision, pertaining to income taxes, provides that “[a]ny
person required to collect, truthfully account for and pay over any
[withheld] tax imposed by this title who fails to do so is, in addition to other
penalties provided by law, personally liable for the total amount of the tax
not collected or accounted for and paid over.” A.R.S. § 43-435. The Action
Marine majority reasoned that the inclusion of this provision in the same
bill suggested that the legislature similarly intended a broader meaning of
“person” in § 42-5028. 218 Ariz. at 144 ¶ 15. To the contrary, we have
consistently viewed different language in different constitutional and
statutory provisions to have different meanings. See, e.g., Burns v. Ariz.
Pub. Serv. Co., 254 Ariz. 24, 31 ¶ 28 (2022); Rochlin v. State, 112 Ariz. 171, 176
(1975); see generally Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 170 (2012) (“[A] material variation in terms
suggests a variation in meaning.”). That would seem especially true
where a different scope of a term is used in different provisions in the same
bill.
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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

to include corporate officers within the definition of “persons,” “by
enacting § 42-5028, the legislature meant to bring Arizona within the
national trend of imposing personal liability on those individuals who fail
to remit such taxes.” Id. Thus, personal liability could extend to an
“accountant, corporate officer, or other person charged with remitting the
added charge to the taxing authority.” Id. at 146 ¶ 26. Drawing upon
practice from other jurisdictions, the Court remanded to the trial court to
determine whether the person had a duty to remit the taxes—that is,
“control over, responsibility for, or supervision of the money collected.”
Id. at 147 ¶ 29.

¶34 The dissenting justices observed that while the majority
opinion “has much to commend it as a matter of public policy,” its
conclusion “is not inexorably compelled by the text of the relevant
statutes.” Id. at 147 ¶¶ 32–33 (Hurwitz, J., dissenting). The dissenters
noted that A.R.S. § 42-5002(A)(1) encompasses a “person who imposes an
added charge,” which “can only be the business that imposes the [TPT]
charge,” so that for purposes of liability, “‘person’ . . . can refer only to the
putative taxpayer—whether a corporation, individual, or other entity.”
Id. at 148 ¶ 35. The dissent concluded that “before we in effect pierce the
corporate veil and impose substantial liability on these individuals in the
name of good public policy, I would require that the legislature more
clearly enunciate its direction that we do so.” Id. at 149 ¶ 40. 3

¶35 It is axiomatic that we must interpret statutes, whenever
possible, to avoid an unconstitutional result. State v. Arevalo, 249 Ariz. 370,
373 ¶ 9 (2020) (stating the presumptions and construction as to
constitutionality). Due process requires that statutes “provide clear notice
of obligations so that taxpayers may comply and order their affairs
accordingly.” BSI Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17, 22
¶ 25 (2018). For precisely this reason, we construe ambiguous tax statutes
in favor of the taxpayer. See, e.g., City of Phx. v. Orbitz WorldWide Inc.,
247 Ariz. 234, 241 ¶ 22 (2019); Vangilder v. Ariz. Dep’t of Revenue, 252 Ariz.
481, 488 ¶ 26 (2022). The corporate officer in Action Marine was not placed

3 In addition, there may be cases where parties may be even further
removed than the corporate officer in Action Marine, such as where the
entity is a limited liability company. See A.R.S. § 29-3304(A) (insulating
limited liability company members or managers from the company’s debts
and obligations).
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 STATE V. TUNKEY, ET AL.
JUSTICE BOLICK, joined by JUSTICES BEENE, MONTGOMERY
AND KING, Concurring

on notice of potential liability by the plain meaning of § 42-5028 but was
exposed to such liability only by stitching together disparate statutes and
interpretations of different provisions from other jurisdictions.

¶36 It is premature to reconsider Action Marine as the issue was
not briefed. Should we do so in the future we must take into account
applicable stare decisis principles. See, e.g., Lowing v. Allstate Ins. Co.,
176 Ariz. 101, 107 (1993) (describing stare decisis as “a doctrine of
persuasion” that honors prior decisions unless, in addition to other
considerations, they are “clearly erroneous or manifestly wrong”). Nor did
the Tunkeys dispute their personal liability for taxes owed pursuant to
Action Marine, contesting only the process employed by ADOR to collect
back taxes. Because the Court has correctly ruled on that question, any
potential reconsideration of Action Marine must await a future case.

14