Phoenix, Arizona - Arizona Attorney General Mark Brnovich led a coalition of 20 states supporting Ohio’s lawsuit challenging the Biden Administration’s unconstitutional Tax Mandate in the American Rescue Plan Act (ARPA) that threatens to withhold COVID-19 relief funding from states if they lower taxes in any fashion. Any state that violates the provision is required to repay funds to the U.S. Department of Treasury (Treasury).
“States must stand together and push back against this assault on state sovereignty,” said Arizona Attorney General Mark Brnovich. “I am proud to lead this coalition and fight for hardworking taxpayers across the country.”
The coalition is urging the Sixth Circuit Court of Appeals to uphold an injunction that banned the federal government from enforcing the Tax Mandate against Ohio. In their brief, the coalition argues that Ohio has standing to sue because of the harm caused to its state. Even though states have the constitutional power to enact their own tax policy without federal interference, the Tax Mandate requires states to give up that right to get federal funding. Additionally, the coalition argues the Tax Mandate is ambiguous and unconstitutionally coerces states to choose between exercising their constitutional rights and receiving a government benefit.
Joining Attorney General Brnovich are the states of Alabama, Alaska, Arkansas, Florida, Idaho, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, and West Virginia.
Arizona Lawsuit: Attorney General Brnovich filed a lawsuit in March 2021 against the Treasury and federal officials to protect Arizona taxpayers from provisions of the Tax Mandate that threaten to withhold federal COVID-19 relief funding from states if they lower taxes in any fashion. The AGO argues the Tax Mandate is unconstitutionally ambiguous and that the Treasury has failed to provide Arizona with the necessary assurances that it can continue to craft its own tax policies without fear of federal encroachment. The Ninth Circuit is likely to hear the State’s appeal in support of its challenge in January 2022.