Three taxpayers sued the Arizona Department of Revenue (“ADOR”) for a declaratory judgment that the table for determining tax valuation of electric generation facilities at A.R.S. § 42-14156(A)(3) is invalid for failure to comply with the rulemaking requirements of the Arizona Administrative Procedure Act (“APA”), A.R.S. § 41-1001 et. seq. The tax court granted summary judgment to ADOR, finding that the tax table is merely a guideline, not a rule, and thus is exempt from the APA’s rulemaking requirements. The taxpayers appealed.
The Court of Appeals affirmed the tax court ruling for two reasons. First, the statute itself referred to the table as a “guideline” and not a “rule.” A.R.S. § 42-14156(A)(3)(e). Secondly, the table functions as a guideline, and not as a rule, because the table merely sets forth one element — subject to adjustment — to aid in the determination of the statutorily mandated valuation. A “rule” under the APA, in contrast, is an “agency statement of general applicability that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of an agency.” A.R.S. § 41-1007(17).
Judge Barker wrote the opinion for the panel; Judges Kessler and Hall concurred.