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ATRA
SUPPORTS
HB2055
Conforming
municipal
interest
and
tax
refund
filing
requirements
with
the
state
Background
The
Department
of
Revenue
(Department)
is
the
sales
tax
collector
for
all
but
12
cities
in
the
state.
The
cities
in
which
the
Department
is
the
tax
collector
are
referred
to as
“program”
cities,
whereas
the
12
cities
that
collect
their
own
sales
tax
are
referred
to as
“non-program”
cities.
The
non-program
cities
include
Avondale,
Chandler,
Flagstaff,
Glendale,
Mesa,
Nogales,
Peoria,
Phoenix,
Prescott,
Scottsdale,
Tempe,
and
Tucson.
The
non-program
cities
currently
have
a
different
set
of
rules
for
refund
filing
requirements,
as
well
as
different
rates
at
which
interest
accrues
on
deficiency
assessments
and
refunds.
The
different
rules
and
varying
interpretations
pose
obvious
problems
for
taxpayers.
HB2055
attempts
to
create
uniformity
in
treatment
for
taxpayers
regarding
access
to
refunds
as
well
as
interest.
 | Prohibits
the
tax
collector
from
conditioning
any
refund
to
a
taxpayer
on
a
requirement
that
the
taxpayer
remit
the
refund
to
its
customers.
Since
Arizona
has
a
transaction
privilege
tax
rather
than
a
sales
tax,
the
legal
incidence
for
the
tax
is
on
the
taxpayer
–
not
the
taxpayer’s
customers.
This
conforms
to
the
treatment
for
refunds
by
both
the
state
and
program
cities.
| Equalizes
the
non-program
city
interest
rates
on
overpayments
and
deficiencies
by
conforming
to
the
state.
The
state
follows
the
IRS
interest
rate,
which
can
fluctuate
quarterly.
The
state’s
current
rate
of
5%
is
also
followed
by
the
program
cities.
Some
non-program
cities
currently
charge
as
high
as
18%
interest
on
deficiency
assessments
and
offer
as
low
as
1%
interest
on
refunds.
| Considers
a
refund
request
to
have
been
filed
on
the
date
of
its
original
filing.
In
addition,
the
refusal
of
a
tax
collector
to
process
a
claim
may
be
appealed
by
the
taxpayer.
| For
a
denial
to
occur,
the
tax
collector
must
issue
an
express
written
“denial”
containing
the
grounds
for
the
denial,
plus
express
written
notification
of
the
appeal
deadlines.
This
alerts
the
taxpayer
that
the
appeal
time
limits
have
been
triggered.
| Provides
that
additional
information
requested
by
the
tax
collector
must
be
reasonably
related
to
the
refund
claim.
For
instance,
the
tax
collector
is
prohibited
from
requesting
information
that
the
taxpayer
is
not
otherwise
required
to
keep
in
its
records
under
the
recordkeeping
requirements
of
the
model
city
tax
code. |
| | | |
At
the
request
of
the
cities,
the
bill
was
amended
in
the
Senate
to
change
the
date
in
which
interest
accrues
from
the
date
the
tax
was
paid
to
the
date
the
claim
is
filed.
In
addition,
the
retroactivity
provision
has
been
removed
to
ensure
the
bill
will
not
affect
any
existing
judicial
proceedings.
|
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