TX2024-000326 3/27/2026 Wyyerd Connect LLC v. Arizona Department of Revenue

Clerk of the Superior Court
*** Electronically Filed ***
03/30/2026 8:00 AM
THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN THE ARIZONA TAX COURT
TX 2024-000326 03/27/2026
Docket Code 926 Form T000 Page 1
CLERK OF THE COURT
HONORABLE ERIK THORSON G. Duran
Deputy
WYYERD CONNECT L L C PAUL J MOONEY
v.
ARIZONA DEPARTMENT OF REVENUE KIMBERLY J CYGAN
JAMES M SUSA
AARON RICHARD CLOUSE
UNDER ADVISEMENT RULING
The Court held oral argument on February 2, 2026, regarding Defendants Arizona
Department of Revenue (the “Department”) and Maricopa County’s Motion for Summary
Judgment, filed July 29, 2025 (“Defendants’ Motion”), and Plaintiff’s Response to Defendants’
Motion for Summary Judgment; and Plaintiff’s Cross-Motion for Summary Judgment, filed
September 23, 2025 (“Cross-Motion”), as well as subsequent filings related thereto, each of
those.
The Court has considered the filings and arguments of the Parties, the relevant authorities
and applicable law, as well as the entire record of the case, and—considering all facts and
reasonable inferences therefrom in the light most favorable to the non-movants, respectively—
hereby finds as follows regarding the Motions.
Plaintiff Wyyerd Connect, LLC (“Wyyerd”) owns property in Maricopa County and is
identified by the Department as taxpayer identification number 56-869 (the “Property”).
(Defendants’ Statement of Facts, filed July 29, 2025 (“DSOF”), at ¶2, undisputed; Wyyerd’s
Supplement Statement of Facts, filed September 23, 2025 (“PSSOF”), at 1, undisputed.) Wyyerd
is an internet service provider (“ISP”) that provides internet access services to residential and
business customers. (PSSOF ¶1, undisputed.)
Wyyerd does not directly provide telephone services to its customers but re-sells “Voice
over Internet Protocol” (“VoIP”) telephone services to its customers through a company called

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
TX 2024-000326 03/27/2026
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Alianza. (PSSOF ¶2, undisputed.) Wyyerd has a license agreement with Alianza that allows its
ISP customers to purchase Alianza’s VoIP services for a fee collected by Wyyerd as part of its
billing for ISP services. (PSSOF ¶10, undisputed.)
For calendar year 2023, Wyyerd reported its total revenues of $8,211,762.70 to the
Federal Communications Commission (“FCC”) which included $158,322.00 of revenues from
re-selling VoIP (i.e., 1.9% of Wyyerd’s total revenues). (PSSOF ¶5, undisputed.) For calendar
year 2022, Wyyerd reported its total revenues of $1,093,114.71 to the FCC which included
$24,697.82 of revenues from re-selling VoIP (i.e., 2.2% of Wyyerd’s total revenues). (PSSOF
¶6, undisputed.)
Wyyerd filed its First Amended Complaint and Notice of Appeal alleging that the
Department’s full cash value for tax year 2025 was excessive and alleging a claim for illegally
collected tax and discrimination for tax years 2024 and 2025. (See generally First Amended
Complaint and Notice of Appeal, filed December 12, 2024.)
Defendants seek summary judgment contending that (1) Wyyerd is a telecommunications
company and subject to valuation under A.R.S. § 42-14403; (2) appellate precedent forecloses
Wyyerd’s uniformity and discrimination claims; and (3) Construction Work in Progress
(“CWIP”) is telecommunications property to be included in the valuation of telecommunications
companies. (See generally Defs.’ Mot.)
Wyyerd seeks summary judgment on the same issues except that if Wyyerd’s Cross-
Motion is denied, Wyyerd contends that its uniformity and discrimination claim requires trial
based on issues of fact. (See generally Cross-Mot.)
Summary judgment is appropriate if “there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a); General
Motors Corp. v. Maricopa Cty., 237 Ariz. 337, 339 ¶7 (App. 2015). “The valuation or
classification as approved by the appropriate state or county authority is presumed to be correct
and lawful.” A.R.S. § 42-16212(B).
A.R.S. § 42-14403(A) provides the following:
On or before August 31 of each year, the department shall determine
the valuation as of January 1 of the property of all
telecommunications companies operating in this state at its full cash
value. Real estate shall be valued at market value, and personal
property shall be valued on a unitary basis at its cost less
depreciation. In addition, the taxpayer may submit documentation

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
TX 2024-000326 03/27/2026
Docket Code 926 Form T000 Page 3
showing the need for, and the department shall consider, an
additional adjustment to recognize obsolescence using standard
appraisal methods and techniques.
Cost is defined as “the original cost as reported on the company’s books and records.”
A.R.S. § 42-14403(C)(1).
A telecommunications company is defined as “any person that owns communications
transmission facilities and that provides public telephone or telecommunications exchange or
inter-exchange access for compensation to effect two-way communication to, from, through or
within this state.” A.R.S. § 42-14401.
Defendants contend that Wyyerd meets the definition of a telecommunications company
because it provides two-way telecommunications services and therefore is subject to valuation
under A.R.S. § 42-14403. (Defs.’ Mot., at 4.) Defendants rely on Cable One, Inc. v. Ariz. Dep’t
of Revenue, 232 Ariz. 275 (App. 2013).1 (Defs.’ Mot., at 4–6.)
In Cable One, the Arizona Court of Appeals stated that “A.R.S. § 42-14401 is not limited
to companies that directly connect to the PSTN.” 232 Ariz. at 279 ¶18. (PSTN is “the traditional,
circuit-switched telephone network known as the ‘public switched telephone network.’” Id. at
277 ¶8.) The Court of Appeals found “that through its VoIP service, Cable One is providing
‘telecommunications exchange or inter-exchange access for compensation to effect two-way
communications to, from, through or within this state.’” Id. at 279 ¶18 (quoting A.R.S. § 42-
14401).
Wyyerd contends that Cable One is distinguishable because Wyyerd’s business activities
are different than those in Cable One. (Cross Mot., at 6.) Wyyerd contends that the test set forth
in Cable One does not apply because Wyyerd does not provide VoIP services using its own
property. (Cross Mot., at 11.) Wyyerd bills for VoIP services provided by Alianza pursuant to
the license agreement between Wyyerd and Alianza. (Cross-Mot., at 11.) Wyyerd contends that
it does not own any facilities or equipment that allow people to make or receive VoIP calls and
does not advertise or promote such services on its website. (Cross Mot., at 6.) Defendants
1 At oral argument, Defendants’ counsel requested that the Court take judicial notice of the
underlying tax decision in Cable One. Plaintiff’s counsel did not object. Therefore, the Court
took judicial notice of the Minute Entry filed November 17, 2011 in TX2010-000170. See Cable
One Inc v. Ariz. State Dep’t of Revenue, TX2010-000170, 2011 WL 13220796 (Ariz. Tax Ct.
Nov. 17, 2011), rev’d sub nom. Cable One, Inc. v. Ariz. Dep’t of Revenue, 232 Ariz. 275, 304
P.3d 1098 (App. 2013).

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contend that this does not create a distinction for property tax purposes. (Defs.’ Reply, filed
November 12, 2025, at 3.)
The Court of Appeals stated in Cable One:
Accordingly, Cable One’s argument that it does not own
communications transmission facilities because it does not
“interface” directly with the PSTN misses the mark. The Legislature
did not describe the technology the facilities must use to transmit the
communications. Instead, as discussed, the Legislature described the
facilities in terms of function: “communications transmission
facilities.” As long as the facility serves or facilitates the
transmission of communications, it is a communications
transmission facility. Accordingly, we agree with the Department
that “communications transmission facilities” include but are not
limited to PSTN facilities.
232 Ariz. at 283 ¶33. Cable One is analogous here. Defendants contend that Wyyerd supplies the
infrastructure to connect to the internet and the VoIP service uses the internet infrastructure. (Defs.’
Reply, at 3.) Wyyerd provides internet access to its customers as well as reselling VoIP services.
(PSSOF ¶¶1–2, undisputed.)
Wyyerd’s reported total revenue includes revenue from the reselling of VoIP. (PSSOF ¶¶5–
6, undisputed.) The Court recognizes that only a small percentage of Wyyerd’s revenues come
from the reselling of VoIP. However, in Cable One, the Court of Appeals addressed Cable One’s
argument that “it cannot be centrally assessed as a telecommunications company because the
‘predominant use of its Arizona property is to provide cable television services,’ not VoIP service.”
232 Ariz. at 284 ¶41. The Court rejected that argument finding that the valuation statute did not
refer to predominant use. Id.
THE COURT FINDS that Wyyerd is a telecommunications company under A.R.S. §
42-14401 and subject to valuation under A.R.S. § 42-14403.
The 2025 full cash value for Wyyerd’s Arizona property was set by the Department at
$82,968,000. (DSOF ¶5, undisputed.) Wyyerd contends that the full cash value is excessive
because it includes approximately $52,448,368 of CWIP and should be reduced to no more than
$39,519,531. (Cross Mot., at 8.) The 2024 full cash value for Wyyerd’s Arizona property was set
by the Department at $46,591,000. (DSOF ¶4, undisputed.) Wyyerd contends that the full cash
value is excessive because it includes approximately $31,333,219 of CWIP and should be
reduced to no more than $15,607,781. (Cross Mot., at 8.)

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
TX 2024-000326 03/27/2026
Docket Code 926 Form T000 Page 5
The valuation formula set forth in A.R.S. § 42-14403(A) states: “Real estate shall be
valued at market value, and personal property shall be valued on a unitary basis at its cost less
depreciation.” Cost is defined as “the original cost as reported on the company’s books and
records.” A.R.S. § 42-14403(C)(1). CWIP is not addressed in the telecommunications company
statutes.
Wyyerd contends that its CWIP all relates to cost of expanding its fiber-optic network
and is not taxable under A.R.S. § 42-14403. (Cross-Mot., at 12.) Wyyerd contends that the
reported CWIP in tax years 2024 and 2025 are not part of the statutory formula under A.R.S. §
42-14403 because CWIP is neither a cost of the property in service nor depreciable. (Cross Mot.,
at 7.)
Defendants contend that Wyyerd’s CWIP is property of a telecommunications company
and therefore is included in the Department’s valuation. (Defs.’ Mot., at 7.) Defendants contend
that CWIP is addressed in other property valuation statutes and the Legislature could have
included a similar rule for telecommunications companies if it wanted to. (Defs.’ Mot., at 7.)
Defendants also contend that Wyyerd includes the value of CWIP on its books and records and
there is no exception in the definition of “cost” for CWIP. (Defs.’ Mot., at 8.)
Wyyerd cites several examples of references to CWIP in other statutes. (Cross-Mot., at 7
n.3.) A.R.S. § 42-14155(D)(5) states that CWIP is included in renewable energy equipment.
Other statutes Wyyerd cites state that CWIP is not subject to valuation or is valued at a
percentage of cost. Defendants contend that including language in the telecommunications
statute that CWIP is to be taxed would be redundant because under the current language all
telecommunications company property shown on the books and records is subject to tax. (Defs.’
Reply, at 6–7.) The Court agrees. Here, CWIP is included on Wyyerd’s books and records.
(DSOF ¶¶3, 6, 9, disputed that CWIP is taxable.)
THE COURT FINDS that CWIP is included as part of the statutory valuation set forth
in A.R.S. § 42-14403.
Wyyerd also asserts a claim under the Uniformity Clause as an alternative claim and
contends that such claim involves issues of fact for trial. (Cross Mot., at 13–14.) Defendants
contend that Wyyerd’s Uniformity Clause claim fails because Wyyerd is not like similarly
situated properties because the properties cited have separated VoIP property into new legal
entities. (Defs.’ Reply, at 8.) Wyyerd’s discrimination claim is based on whether CWIP is
taxable and whether its internet access property has been valued in a discriminatory manner.
(Cross-Mot., at 13.) On the record before it, the Court has been able to resolve the first question,
but not the second.

SUPERIOR COURT OF ARIZONA
MARICOPA COUNTY
TX 2024-000326 03/27/2026
Docket Code 926 Form T000 Page 6
THE COURT FINDS that questions of fact remain as to the Uniformity Clause claim.
IT IS ORDERED granting in part Defendants’ Motion for Summary Judgment, filed
July 29, 2025, as to the findings that Wyyerd is a telecommunications company under A.R.S. §
42-14401 and that CWIP is to be included as part of the statutory valuation set forth in A.R.S. §
42-14403. All other relief requested in the motion is denied.
IT IS FURTHER ORDERED denying Plaintiff’s Cross-Motion for Summary
Judgment, filed September 23, 2025.