ARIZONA STATE SENATE
Phoenix, Arizona
FINAL
REVISED
tax corrections act of 2002
Makes technical, conforming
and clarifying changes to the Arizona tax statutes.
The state tax statutes are
reviewed annually by the Department of Revenue (DOR) and Legislative Council
for errors and obsolete language. DOR and the Legislative Council recommend
nonsubstantive technical corrections to clean up the language in the tax
statutes. These suggestions are compiled each year in the tax corrections act.
S.B. 1139 makes technical,
conforming and clarifying changes to Arizona tax statutes. According to DOR,
there is no fiscal impact connected to this bill.
1. Establishes a retention period for tax returns and accompanying documents.
2. Requires electronic return preparers to retain, for six years, records of transaction privilege tax and use tax returns and other tax return records for four years.
3. Provides for a $50 to $25,000 penalty for electronic return preparers who fail to retain tax return records for the specified time periods.
4. Allows DOR to require, by administrative rule, electronic return preparers to retain tax return documents for six years and other tax return records for four years.
5. Requires electronic return preparers to abide by the regulations set forth in Department rules, manuals, rulings or procedures.
Definitions
6. Moves the definitions of “electronic return preparer,” “return preparer” and “return” to another statutory section.
7. Removes the definition of “claimant.”
8. Removes, from the definition of “report,” a holder’s report of abandoned property.
9. Defines “Arizona tax liability” due on the taxpayer’s return as the amount of tax due on the return minus the amount of Arizona income tax withheld and tax credits claimed by the taxpayer.
10. Removes the overlap between confidentiality provisions in current statute (Title 42 and Title 44).
11. Allows information regarding severance tax, jet fuel excise tax or use tax to be disclosed to any county, city or town tax official.
12. Enables DOR to collect and administer, in addition to transaction privilege tax, any affiliated excise taxes including:
(a)
Use
tax.
(b)
Severance
tax.
(c)
Jet
fuel excise and use tax.
(d)
Rental
occupancy tax.
13. Authorizes DOR to prescribe, by administrative rule, alternative methods for signing, subscribing or verifying any report or statement required to be filed by the Department in relation to property tax and unclaimed property.
14. Allows the DOR Director to waive the signature requirement provided that an equivalent method of verification is employed.
15. Stipulates that DOR will no longer prescribe short form returns for individual taxpayers whose dividend and interest income is less than $400.
16. Allows, in proceedings involving penalties assessed against a return preparer or electronic return preparer, the disclosure of confidential information to the judges, parties to the proceeding and the parties’ representatives provided that:
a)
The
names of dependents, all social security numbers, the taxpayer’s address and
signature are redacted from the return and any attachments containing the
aforementioned information.
b)
The
treatment of an item on a return is or may be related to the resolution of an
issue in the proceeding.
c)
The
return information relates or may relate to a transactional relationship
between the taxpayer and the defendant that directly affects the resolution of
an issue in the proceeding.
17. Delays, from the third Monday in August to the third Friday in September, the date the assessor computes voluntary contributions relating to government property leases.
18. Removes the transaction privilege tax exemption for sales of new semitrailers manufactured in Arizona or for new parts of semitrailers manufactured in Arizona.
19. Requires DOR to mail annual report forms to companies that need to file an annual report for determining valuation on or before February 1 of each year.
20. Removes duplicative statutory language.
21. Blends multiple enactments regarding constitutional taxation.
22. Makes technical and conforming changes.
23. Provides for a general effective date.
Amendments Adopted by Committee
1. Corrects internal reference errors.
2. Removes invalid statutes.
3. Makes additional technical and conforming changes.
Amendments Adopted by House of Representatives
Federal Limited Consents
1. Contains a retroactivity clause of January 1, 1993 for extension periods for proposing and assessing federal income tax deficiencies and proposed income tax notice mailing deadlines for federal limited consents executed by homebuilders.
2. Requires, with respect to certain federal limited consents executed by homebuilders, claims for income tax refunds to be filed by December 31, 2002.
3. Requires taxpayers to furnish evidence for refund claims and basis of entitlement based on assessments for items not included in federal limited consents.
4. Requires DOR to review all timely claims, determine the correct amount of the claims and notify the taxpayer of its interpretation.
5. Prohibits DOR from making any refunds until all refund claims respecting the federal limited consents executed by homebuilders are processed.
6. Allows DOR, if a taxpayer appeals the interpretation of the claim, to notify other taxpayers filing similar claims of the nature and extent of the delay.
7. Prohibits the aggregate refund amount from exceeding $10,000.
8. Reduces proportionately the amount of each claim if the correct aggregate refund amount exceeds $10,000.
9. Requires interest to be added to claim amounts on refunds that are not paid or cannot be determined by June 30, 2003 if the payments are delayed due to departmental action unrelated to claimant objections.
10. Requires taxpayers making retroactive claims related to the federal limited consents executed by homebuilders to complete waivers of the statute of limitations until the legality of these provisions has been adjudicated.
11. Contains a nonseverability clause.
12. Allows, in proceedings involving penalties assessed against a return preparer or electronic return preparer, the disclosure of confidential information to the judges, parties to the proceeding and the parties’ representatives provided that:
a)
The
names of dependents, all social security numbers, the taxpayer’s address and
signature are redacted from the return and any attachments containing the
aforementioned information.
b)
The
treatment of an item on a return is or may be related to the resolution of an
issue in the proceeding.
c)
The
return information relates or may relate to a transactional relationship
between the taxpayer and the defendant that directly affects the resolution of
an issue in the proceeding.
13. Delays, from the third Monday in August to the third Friday in September, the date the assessor computes voluntary contributions relating to government property leases.
14. Removes the transaction privilege tax exemption for sales of new semitrailers manufactured in Arizona or for new parts of semitrailers manufactured in Arizona.
15. Makes conforming changes.
Amendments Adopted by Conference Committee
1. Removes provisions relating to federal limited consents.
2. Requires DOR to mail annual report forms to companies that need to file an annual report for determining valuation on or before February 1 of each year.
3. Makes a technical change.
4. Senate
Action House
Action
FIN 2/4/02 DPA 5-0-0-0 WM 4/9/02 DPA 8-0-0-2
3rd Read 2/13/02 30-0-0-0 3rd Read 5/6/02 57-0-3-0
Final Read 5/22/02 27-0-3-0 Final Read 5/22/02 55-1-4-0
Signed by Governor 5/29/02
Chapter 326
Prepared by Senate Staff
June 11, 2002