- Associated Press - Wednesday, September 23, 2015

PHOENIX (AP) - Gov. Doug Ducey will move to begin collection efforts on nearly $700,000 in back taxes a helicopter tour company owes the state but which he had ordered suspended pending the outcome of a court case, his spokesman said Wednesday.

The governor, however, will also ask the Legislature for a new version of a bill he vetoed in April that lets Papillon Airways Inc. off the hook while working with the company toward a resolution, spokesman Daniel Scarpinato said.

The decision comes a day after the Arizona Supreme Court rejected Papillon’s efforts to overturn an appeals court ruling in the state’s favor. That ruling said Papillon and companies it leased helicopters from owed state taxes on lease income, and engines and other equipment it bought from 2003 through 2006.

Early this year, Papillon went to the Legislature to get a bill passed to let it off the hook for the taxes. It passed, but Ducey vetoed it primarily because of a retroactivity clause that could have affected many more companies that have paid similar taxes.

Ducey, however, ordered the Department of Revenue not to try to collect the money pending action by the Legislature next year.

That brought criticism from some lawmakers who said the governor was selectively enforcing the law. Others, including an attorney for former Gov. Jan Brewer, said such action was within the governor’s authority as chief executive.

Now that the Supreme Court has ruled, Scarpinato said Ducey will enforce the law.

“We are going to follow the law and we are going to implement the decision of the court,” he said. “We would like to find some options that meet the requirements of the law but that also take into account the fact that there was obviously some misunderstanding on the part of the state and the taxpayer for many years.”

The case involving Papillon follows a familiar story line at the Legislature: The Department of Revenue decides a company or industry should be paying transaction or sales taxes after an audit or some other review. The firm then goes to the Legislature seeking a change in the law to allow it to escape those taxes.

Crop dusters were in a similar position this year, and their relief bill was eventually folded into the one benefiting Papillon that Ducey vetoed.

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