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 clarifies that mortgage payments on nonprofit bingo operations is a valid expense.
· Section 2 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 3 and 4 blend statutes due to the passage of the tourism and sports authority proposition.
· Section 5 deletes the reference to the family income tax credit in the debt setoff statute because the credit is not refundable.
· Section 6 provides a reasonable cause exception to the late payment penalty for taxpayers participating in a payment agreement.
· Section 7 corrects an improper reference to the Internal Revenue Code (IRC) section 7213A and conforms DOR confidentiality policy to the IRS policy on the use of outside vendors for shredding procedures. Additionally, this section makes a technical correction to allow the AG to properly enforce the tobacco master settlement agreement.
· Section 8 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 9 and 14 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 10 and 11 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 12 and 13 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 14 also clarifies the language regarding the use tax exemptions do not imply where courts have ruled such an imposition is unconstitutional.
· Section 15 removes an unnecessary reference to section 43-1201.
· Section 16 makes a technical change regarding the 140A form to conform with current practice.
· Section 17 removes duplications.
· Section 18 corrects an improper reference to credits with respect to the subtraction for emergency efficient residences.
· Sections 19 and 28 make technical changes to the calculation of the corporate or indivdual reseearch and development tax credits.
· Section 20 provides the extension of the carryover period for defense contractor credits for employment that was provided to corporations.
· Section 21 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 22 clarifies the reference to the proper refund section and to correct the credit limitation provision for agricultural districts.
· Sections 23 and 29 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 24 clarifies that corporate taxpayers should substitute the corporate term “ federal taxable income” for the individual term “federal adjusted gross income”.
· Section 25 eliminates the ambiguity and obsolete language from the corporate net operating loss section.
· Section 26 clarifies the extension of the carry forward period for the credit for employment by a qualified defense contractor by referencing taxable years.
· Section 27 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 30 clarifies the reference to the proper refund section and to correct the credit limitation provision relating to an agricultural preservation district.
· Section 31 and 32 clarifies terms used in reporting unrelated business income.
· Section 33 corrects an internal reference.
· Section 34 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 35 clarifies that government utilities are treated similar to private utilities regarding unclaimed property.
· Section 36 provides for the proper retroactive effective dates of various sections that are amended by this act.
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45th Legislature
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First Regular Session 3 May
9, 2001
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