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UPDATE ON TAX SIMPLIFICATION
Staff Contact: Tom Duensing, Director, Finance and Technology
Staff Presenter: Tom Duensing, Director, Finance and Technology
Staff Presenter: Vicki Rios, Assistant Finance Director
Guest Presenter: Mr. Tom Belshe, Deputy Director, League of Arizona Cities and Towns
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Purpose and Recommended Action
The purpose of this item is to provide Council with an update on tax simplification efforts which are the result of state legislation passed in 2013.
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Background
Chapter 255, Laws of Arizona 2013 (commonly referred to by its original bill number, HB2111), made changes to the administration process for Transaction Privilege Taxes and modified certain categories of business activity including Prime Contracting.
The law calls for the Arizona Department of Revenue ("ADOR") to become the single point of administration for licensing, filing and payment of all State, county and municipal transaction privilege taxes. The law also requires ADOR to establish and administer a single online portal so that taxpayers can pay all State, county or municipal transaction privilege taxes online. Implementation of these provisions was originally scheduled to take place on January 1, 2015, but it has been delayed until January 1, 2016.
The law allows the ADOR, subject to statutory guidelines, to disclose confidential information related to transaction privilege taxes collected by the department from any jurisdiction to any county, city or town tax official if it relates to a taxpayer who is subject to an ADOR audit. The law stipulates that taxpayers are subject to a single audit, eliminating possible subsequent or joint audits by cities and towns. The law also stipulates a variety of requirements for the audit most of which generally require ADOR's active involvement.
In addition, effective January 1, 2015, HB2111 also exempts from the "prime" construction contracting classification certain service contractors and d...
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