• Pascal Albright Arizona Daily Star

These movies were filmed in part in Tucson and surrounding areas from 1970 to today. In addition to these more modern motion pictures, Old Tucson Studios has hosted nearly 300 productions since 1939.

PHOENIX — The Arizona Commerce Authority wants a judge to rule there’s nothing unconstitutional about giving away up to $125 million in state tax credits a year to lure filmmakers to the state.

The authority is using the credits to boost production of films and commercials here.

Of note, the credits are refundable. Put simply, a company can get a check from the state if the amount of credits it earns exceeds the taxes it owes.

“Tombstone,” the 1993 movie starring Val Kilmer, Sam Elliott, Kurt Russell and Bill Paxton, was filmed in various Southern Arizona locations. The Arizona Commerce Authority hopes to revive the once-thriving film industry here.

In new court filings, authority attorney Andrew Pappas asks a Maricopa County judge to rule that none of that runs afoul of the Gift Clause of the Arizona Constitution. That clause makes it illegal for the state to pay more for something than the benefit it gets in return, and the Goldwater Institute has sued on behalf of two taxpayers to end the tax credits for filming.

Pappas, however, said the Gift Clause doesn’t apply here.

Actor Paul Newman has his photo taken by his wife and accomplished actor, Joanne Woodward, during a break in filming of “Hombre” at Old Tucson Studios in 1966. Newman would return to Old Tucson in 1971 to film “The Life and Times of Judge Roy Bean.” More recently, however, producers have been going to other states to film instead of Arizona.

In essence, he is telling Superior Court Judge Michael Herrod that the constitutional prohibition applies only when the state gives away something it has in grants or subsidies.

“But before the state can give funds, it must first own them,’’ Pappas wrote. “And because the state does not own the future taxable income of its citizenry, the state cannot give those funds away.’’

To rule otherwise, he said, would require a finding that all future taxable income belongs to the state, meaning that, in foregoing any future tax revenues, the state has provided someone with a gift.

“That conclusion would be legally, practically, and conceptually untenable,’’ Pappas said.

The dispute could determine whether Arizona gets to compete with other states, including New Mexico and Georgia, which have been aggressive in convincing producers to film there. The credits and other special offers they provide bring in not just the outside money but also help support those who own and operate studios there.

Central to the issue in Arizona is a 2022 law championed by Sen. David Gowan, a Sierra Vista Republican, who said he wanted to revive what was once a thriving film industry here.

In the 1930s, John Ford saw Monument Valley and decided to film Stagecoach there with John Wayne. And the studios at Old Tucson were for a long time the site of various Westerns, ranging from The Lone Ranger to Three Amigos, before much of the facility was destroyed in a 1994 fire.

Actor Clint Eastwood talks with director John Sturges during filming of the movie “Joe Kidd” at Old Tucson Studios on Dec. 2, 1971. Today, a court case is playing out on whether it’s unconstitutional for Arizona to give up to $125 million in state tax credits a year to lure filmmakers to the state.

Since then, producers are going elsewhere to film. Even movies about events in Arizona were shot elsewhere, including “Only the Brave,’’ about the deaths of 19 Granite Mountain Hotshots fighting the 2013 Yarnell Hill Fire, which was filmed in New Mexico.

Supporters of the credits say they will bring more production to Arizona by making it more financially attractive.

The legal issue is the Gift Clause. The Arizona Supreme Court has ruled it requires that payments of state funds cannot exceed the benefit the state gets.

Here, challengers say, there is no way the state generates that much in direct revenues.

In defending the law, and the credits, Pappas does not seek to do the math of whether the state gets back as much as it is giving up. Instead, he is arguing there’s no legal basis for the lawsuit in the first place.

He said the wording of the Gift Clause says no state or local government “shall ever give or loan its credit in the aid of, or make a donation by grant, by subsidy or otherwise, to any individual, association, or corporation.’’

“It does not mention tax credits,’’ Pappas is telling the judge.

If Herrod isn’t buying that argument, he has others. One is his claim that this is none of the court’s business.

“The constitution assigns tax policymaking to the Legislature, not the courts,’’ Pappas wrote. “And the same framers who adopted the Gift Clause also provided the Legislature broad discretion in enacting tax exemptions, including those for private corporations.’’

He also said chaos would result if the tax credits for film producers were overturned, saying it would open the door to challenges to all sorts of other tax credits as well as deductions and exemptions in state law.

Consider, he said, tax credits now available for donations to organizations that provide scholarships for students to attend private and parochial schools.

It also could bring into question the decisions by lawmakers of what to tax and what to exempt, Pappas said.

For example, individuals pay sales taxes on most retail purchases. But the Legislature has decided there’s no such levy on legal services. And individuals can deduct medical expenses when computing their state income tax liability but not personal travel.

Finally, Pappas claims that the two individual plaintiffs the Goldwater Institute is representing have no legal right to sue.

He said taxpayers can go to court only to challenge government expenditures and appropriations.

“Tax credits are neither,’’ Pappas said. He said the plaintiffs also fail to show any “specific and concrete injury’’ from the tax credits — a general requirement for people to sue — but instead only “a generalized and hypothetical pecuniary harm.’’

No date has been set for a hearing.

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Howard Fischer is a veteran journalist who has been reporting since 1970 and covering state politics and the Legislature since 1982. Follow him on X, Bluesky and Threads at @azcapmedia or email azcapmedia@gmail.com.