tax corrections act of 2001
HB 2145 is the annual tax corrections bill that make technical, conforming, and clarification 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 deletes the reference to the family income tax credit in the debt setoff statute because the credit is not refundable.
· Section 5 provides a reasonable cause exception to the late payment penalty for taxpayers participating in a payment agreement.
· Section 6 corrects an improper reference to the Internal Revenue Code (IRC) section 7213A.
· Section 7 clarifies and makes consistent throughout the statute that taxpayers that pay the transaction privilege tax during the “grace period” will not have penalties applied.
· Sections 8 and 13 clarifies the transaction privilege and use tax in regards to “producing livestock” is retroactive to the beginning of the current fiscal year (2000-2001).
· Sections 9 and 10 are a blending of ARS 42-5070, relating to 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 11 and 12 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 13 clarifies the language regarding the use tax exemptions do not imply where courts have ruled such an imposition is unconstitutional.
· Section 14 removes an unnecessary reference to section 43-1201.
· Section 15 removes duplications and corrects the effective date of this paragraph.
· Section 16 corrects an improper reference to credits with respect to the subtraction for emergency efficient residences.
· Section 17 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 18 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 19 clarifies the reference to the proper refund section and to correct the credit limitation provision.
· Sections 20 and 25 change the language of taxable years to calendar years for individual and corporate technology training credits to coordinate with the Department of Commerce program that uses a calendar year.
· Section 21 clarifies that corporate taxpayers should substitute the corporate term “ federal taxable income” for the individual term “federal adjusted gross income”.
· Section 22 eliminates the ambiguity and obsolete language from the corporate net operating loss section.
· Section 23 clarifies the extension of the carry forward period for the credit for employment by a qualified defense contractor by referencing taxable years.
· Section 24 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 26 clarifies the reference to the proper refund section and to correct the credit limitation provision relating to an agricultural preservation district.
· Section 27 and 28 clarifies terms used in reporting unrelated business income.
· Section 29 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 30 clarifies that government utilities are treated similar to private utilities regarding unclaimed property.
· Section 31 provides retroactive effective dates of July 18, 2000 for section 1 and taxable periods beginning from and after June 30, 2000 and December 31, 1999 for section 15.
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).
This was further amended in Committee of
the Whole as follows:
· Removes a correction made in section 24 relating to agricultural preservation districts.
· Further clarification that government utilities are treated similar to private utilities regarding unclaimed property.
· Makes technical and conforming changes.
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45th Legislature
First Regular Session 3 February
1, 2001
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