House of Representatives

HB 2056

tribal-state tax agreements and credits

Sponsors: Pepresentatives Laughter, Clark, Anderson

X	Committee on Native American Affairs
	Committee on Ways and Means
	Caucus and COW
	Third Read
	As Passed the House

HB 2056 provides that if a Native American community, tribe or nation imposes a transaction privilege tax (TPT) to companies that conduct business on a reservation, the Arizona Department of Revenue shall allow a credit against the tax rate imposed by the Native American community.

Provisions

· Provides that the credit will be equal to the following:

Tribal Tax Rate Less than 5%	Tribal Rate between 5% and 5.6%	Tribal Rate greater than 5.6%
State collects the difference between the tribal rate and 5.0%. Forty percent of what the state collects will be designated as part of the TPT distribution base.	State collects the difference between the tribal rate and the 5.6%	State collects nothing.
The additional state rate of 0.6% passed in proposition 301 continues to fund education.	All the revenues collected by the state are designated to fund education.

· Authorizes the director of the Department of Revenue (DOR) to enter into agreements with Native American tribes, communities or nations for the collection of taxes.

· Stipulates that monies collected by DOR on behalf of a Native American community are not state revenue, and they will be disbursed according to the terms of the intergovernmental agreements.

· Prohibits the state or the Native American authorities to impose taxes that are prohibited by the federal government.

· Establishes that an agreement between the two party governments does not affect other agreements or relations between the state of Arizona and other Native American tribes, communities or Nations.

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45th Legislature

Second Regular Session 2 January 16, 2002

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