tax corrections act of 2001
HB 2145 is the annual tax corrections bill that make technical and conforming changes to the Arizona tax statutes.
The state tax statutes are reviewed annually by the Department of Revenue (DOR) and Legislative Council for erroneous errors and obsolete language. DOR and the Legislative Council recommend non-substantive technical corrections to clean up the language in the tax statutes. These suggestions are complied each year in the tax correction act.
· Section 1 provides that the tax levy for county equalization assistance for education shall be determined pursuant to section ARS 41-1276, which sets the truth in taxation levy for equalization assistance to school districts.
· Sections 2 and 3 blend statutes due to the passage of the tourism and sports authority proposition.
· Section 4 provides a reasonable cause exception to the late payment penalty for taxpayers participating in a payment agreement.
· Section 5 corrects an improper reference to the Internal Revenue Code (IRC) section 7213A.
· Sections 6 and 11 clarifies the transaction privilege and use tax language pertaining to the industry term of art “producing livestock” (livestock that produce) which primarily pertains to the extracting and cooling of milk, but does not include machinery and equipment used to produce (breed, water and feed, etc.) livestock.
· Sections 7 and 8 is a blending of ARS 42-5070, which is the transient lodging classification. It requires the department to separately account for funds collected under the class for purposes of remission and distribution to the tourism fund.
· Sections 9 and 10 blend statutes regarding prime contacting classification into one statute and correctly states a deduction from the tax base of the class. The gross proceeds of sales or gross income derived from the post-construction treatment of a real property for termite and general pest control is placed within this statute. This exclusion was previously added during the 2000 session.
· Section 12 removes an unnecessary reference to section 43-1201.
· Section 13 removes duplications and corrects the effective date of this paragraph.
· Section 14 corrects an improper reference to credits with respect to the subtraction for emergency efficient residences.
· Section 15 provides the extension of the carryover period for defense contractor credits for employment that was provided to corporations in Senate Bill 1424 from the 2000 regular session.
· Section 16 conforms language to provide the extension of the carryover period for defense contractor property tax credits to individuals that was provided to corporations in Senate Bill 1424 from the 2000 regular session.
· Section 17 clarifies the reference to the proper refund section and to correct the credit limitation provision.
· Section 18 clarifies when the credit is claimed for taxpayers not filing on a calendar year basis.
· Section 19 clarifies that corporate taxpayers should substitute the corporate term “ federal taxable income” for the individual term “federal adjusted gross income”.
· Section 20 eliminates the ambiguity and obsolete language from the corporate net operating loss section.
· Section 21 clarifies the extension of the carry forward period for the credit for employment by a qualified defense contractor by referencing taxable years.
· Section 22 clarifies the extension of the carry forward period for the credit, for property tax that is paid by a qualified defense contractor by referencing taxable years.
· Section 23 clarifies when the credit for technology training is claimed for taxpayers not filing on a calendar year basis.
· Section 24 clarifies the reference to the proper refund section and to correct the credit limitation provision.
· Section 25 clarifies the definition of property so that “property of a person who is maintaining a current business relationship with the holder of property” is not included.
· Section 26 provides retroactive effective dates for section 1 and section 13.
This bill was amended in the Ways and Means
Committee as follows:
· Deletes the reference to the family income tax credit in the debt setoff statute because the credit is not refundable.
· Clarifies and makes consistent throughout the statute that taxpayers who pay the transaction privilege tax during the “grace period” will not have penalties applied.
· Clarifies the language regarding the use tax exemptions do not imply where courts have ruled such an imposition is unconstitutional.
· Clarifies that government utilities are treated similar to private utilities regarding unclaimed property.
· Changes the language of taxable years to calendar years for technology training credits to coordinate with the Department of Commerce program that uses a calendar year.
· Clarifies the transaction privilege and use tax in regards to “producing livestock” is retroactive to the beginning of the current fiscal year (2000-2001).
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44th Legislature
Second Regular Session 3 January
16, 2001
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