ARIZONA STATE SENATE
Phoenix, Arizona
estimated tax
payment; repeal
Purpose
Removes, beginning on July 1, 2004, the estimated tax payment requirement for businesses. Provides for the transfer of monies equal to the amount of the fiscal impact of this measure, from the Budget Stabilization Fund to the General Fund, and requires the Treasurer to transfer the amount previously transferred to the state General Fund back to the Budget Stabilization Fund.
Background
In 1989, a requirement for estimated payments was established for businesses with an annual transaction privilege, telecommunication excise and county excise tax liability of $100,000 or more. This required the taxpayer to remit tax collections each month from the first 15 days of the month at the same time the tax return is due for the prior months collections. This measure was enacted as a means of accelerating state revenue collections into FY 1989-1990. In July of 1993, required estimated tax payments were eliminated for the time period of July through May of each year, however, the June estimated tax payment remains.
This measure eliminates the June required estimated tax payments. The Department of Revenue (DOR) indicates that estimated transaction privilege, telecommunication excise and county excise taxes totaling $117.1 million were received in FY 1999-2000, and that this legislation will cause a one time shift in general fund revenue away from FY 2002-2003. Using an eight per cent annual growth rate each year from FY 1999-2000 to FY 2002-2003, the adverse general fund impact in FY 2002-2003 is approximately $147.4 million.
1. Specifies that estimated tax payments are to be made through June 30, 2004 for businesses with an annual TPT, telecommunication excise and county excise tax liability of $100,000 or more.
2. Removes, beginning July 1, 2004, the estimated tax payment requirement for businesses with an annual TPT, telecommunication excise and county excise tax liability of $100,000 or more.
3. Requires the state treasurer to transfer the amount reported by the Director of DOR from the Budget Stabilization Fund to the General Fund.
4. Requires the Treasurer, on July 1, 2004, to transfer the amount previously transferred from the Budget Stabilization Fund to the state General Fund back to the Budget Stabilization Fund with interest that is equal to the average rate earned by the monies in the Budget Stabilization Fund during FY 2003-2004.
5. Requires the director of DOR to report to the Governor, State Treasurer, the legislature, the Governor’s Office of Strategic planning and Budgeting and the Joint Legislative Budget Committee regarding the fiscal impact as a result of the fund transfers.
6. Contains an effective date beginning on January 1, 2004.
Prepared by Senate Staff
March 21, 2001