Bill Text: AZ HB2280 | 2017 | Fifty-third Legislature 1st Regular | Chaptered
Bill Title: Department of revenue; electronic filing
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2017-03-24 - Chapter 60 [HB2280 Detail]
Download: Arizona-2017-HB2280-Chaptered.html
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Senate Engrossed House Bill |
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State of Arizona House of Representatives Fifty-third Legislature First Regular Session 2017
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CHAPTER 60
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HOUSE BILL 2280 |
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AN ACT
Amending sections 5-407, 42-1108, 42-1125, 42-1126, 42-1127, 42‑1129, 42‑2075, 42-3053, 42-3352, 42-3353, 42-3354, 42-3355, 42-3462, 42-5005, 42‑5014, 42-5017, 42-13002 and 43-323, Arizona Revised Statutes; relating to tax returns and reports.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-407, Arizona Revised Statutes, is amended to read:
5-407. Statement of receipts; expenses; penalty
A. On or before the twentieth day after the end of every reporting period designated for the class of the license each licensee shall file with the licensing authority upon forms prescribed by the licensing authority a financial report which is signed and sworn to by the proceeds coordinator showing the amount of the gross receipts derived during the reporting period from games of bingo, the expenses paid, a brief description of the classification of such expenses, the ratio of net proceeds to the adjusted gross receipts received by the licensee during the reporting period, the name and address of each person to whom has been paid three hundred dollars or more and the purpose of such expenditure, the net proceeds derived from each such game of bingo and the uses to which such net proceeds have been or are to be applied. Each licensee shall maintain and keep such books and records as may be necessary to substantiate the particulars of each such report.
B. Except for class A licensees, if the net proceeds derived from the games of bingo for any six consecutive months do not amount to at least fifty per cent percent of adjusted gross receipts for those months in total, it shall be presumed that the expenses incurred for goods, wares, merchandise and services rendered are not bona fide and reasonable, and the operation of the game is deemed to be against public policy. If the net proceeds of the games operated by a licensee are less than fifty per cent percent of the adjusted gross receipts in any six consecutive months, the license may be revoked.
C. The failure to file reports within forty‑five days after their due date, or if filing reports that are not fully, accurately and truthfully completed, may be the basis of the revocation of the license. If the licensee fails to make and file a return on or before the due date, unless the failure is due to reasonable cause, a penalty equal to five per cent percent of the amount found to be due or remaining due under subsection H of this section shall be added to that amount for each month or fraction of a month between the due date of the return and the date on which filed, plus interest at a rate determined pursuant to section 42‑1123. The total penalty shall not exceed twenty‑five per cent percent of the amount found to be remaining due. The penalty is due and payable on notice and demand from the licensing authority. If an action has been filed by the licensing authority for revocation of a license, the court shall award reasonable attorney fees to the licensing authority as a part of the proceedings if the licensing authority prevails in the proceedings.
D. Except for a class A licensee, all monies collected or received from the sale of admission, extra regular cards, special game cards, sale of supplies and all other receipts from the games of bingo shall be deposited in a special account of the licensee which shall contain only such money. Except for a class A licensee, all expenses for bingo games, except cash prizes in the amount of less than one hundred fifty dollars, shall be withdrawn from the licensee's special account by consecutively numbered checks duly signed by a specified officer or officers of the licensee or the supervisor and payable to a specific person or organization. Class A licensees shall pay all bingo game prizes, except cash prizes in an amount less than one hundred fifty dollars, by check duly signed by a specified person or persons or the supervisor. A check shall not be drawn to "cash" or a fictitious payee. A check drawn on a licensee's special account shall not be payable to the licensee. Checks drawn against the net proceeds in the special account shall be drawn only for lawful uses and purposes. The licensee may establish interest bearing accounts which shall contain only monies transferred from the licensee's special account, but all monies, interest and other proceeds shall be redeposited to the special account before being used for lawful uses and purposes.
E. A licensee shall maintain a permanent record containing the signature of each player who receives a cash prize from such licensee and the amount of the cash prize awarded to such player.
F. The net profits after they have been given over to another organization shall not be used by the donee organization to pay any person for services rendered or materials purchased in connection with the conducting of bingo by the donor organization.
G. Expenses shall not be incurred or paid in connection with holding, operating or conducting any game of bingo pursuant to any license, except bona fide expenses of a reasonable amount. Expenses may be incurred only for the following purposes:
1. The purchase of goods, wares and merchandise furnished.
2. Payment for services rendered.
3. Rent.
4. Accountants' fees.
5. License fees.
6. Utility expenses.
7. Security guards.
8. Compensation not to exceed the current federal minimum wage plus twenty per cent percent.
9. Mortgage payments when a nonprofit charitable organization licensee is using the building or premises for both bingo and for the licensee's bona fide charity.
10. Advertising. In this subsection:
(a) "Goods, wares and merchandise" means prizes, equipment and articles of a minor nature such as pencils, crayons, tickets, envelopes, paper clips and coupons necessary for the conduct of games of bingo.
(b) "Services rendered" means repair to equipment, reasonable compensation to bookkeepers or accountants, not more than two in the aggregate, for services in preparing financial reports and a reasonable amount for janitorial service and security guards. Services rendered do not include and no item of expense may be incurred or paid for service of any nature whatever rendered by a member or new member, including, without limitation except as provided by paragraph 8 of this subsection, equipment repair, bookkeeping, accounting, janitorial service, security guard service or operating, conducting or managing a bingo game or providing any professional or consultation service related to bingo.
H. In lieu of the taxes collected under title 42, chapter 5, article 1 there shall be paid to the state licensing authority a tax in the amount prescribed in section 5‑414. The taxes collected pursuant to this section shall be deposited in the state general fund. All administrative receipts, including license fees, penalties and interest, collected by the state pursuant to this article shall be deposited in the state general fund.
I. Each licensee, at the time each financial report is submitted to the licensing authority, shall pay to the order of the licensing authority the amount of tax provided in subsection H of this section.
J. For reporting periods beginning from and after December 31, 2019, or when the licensing authority has established an electronic filing program, whichever is later, each licensee shall file electronically any report or return required under this chapter. The report or return is considered to be filed and received by the licensing authority on the date of the electronic postmark pursuant to section 42-1105.02.
Sec. 2. Section 42-1108, Arizona Revised Statutes, is amended to read:
42-1108. Audit; deficiency assessments
A. If a taxpayer fails to file a return required by this title or title 43, or if the department is not satisfied with the return or payment of the amount of tax required to be paid under either title, the department may examine any return, including any books, papers, records or memoranda relating to the return, to determine the correct amount of tax. This examination must occur within the time periods prescribed by section 42‑1104 and may be accomplished through a detailed review of transactions or records or by a statistically valid sampling method.
B. The department shall give the taxpayer written notice of its determination of a deficiency by mail, and the deficiency, plus penalties and interest, is final forty‑five days from the date of receipt of the notice to the taxpayer unless an appeal is taken to the department. For individual income tax the period is ninety days from the date of mailing. In the case of a joint income tax return, the notice may be a single joint notice mailed to the last known address, but if either spouse notifies the department that separate residences have been established, the department shall mail duplicate originals of the joint notice to each spouse.
C. If a deficiency is determined and the assessment becomes final, the department shall mail notice and demand to the taxpayer for the payment of the deficiency. Notwithstanding section 42‑1125, subsection E, the deficiency assessed is due and payable at the expiration of ten days from the date of the notice and demand.
D. A certificate by the department of the mailing of the notices specified in this section is prima facie evidence of the assessment of the deficiency and the giving of the notices.
E. Any amount of tax in excess of that disclosed by the return due to a mathematical error or failure of the taxpayer to properly compute the liability based on the taxable income reported on the return nonaudit adjustment, as listed in subsection F of this section, notice of which has been mailed to the taxpayer, is not a deficiency assessment within the meaning of this section. The taxpayer may not protest or appeal as in the case of a deficiency assessment, based on such notice, and the assessment or collection of the amount of tax erroneously omitted in the return is not prohibited by this article.
F. An adjustment due to any of the following is considered a nonaudit adjustment:
1. An addition, subtraction, multiplication, division or other mathematical error shown on any return.
2. The failure of the taxpayer to properly compute the tax liability based on the taxable income reported on the return.
3. An incorrect usage or selection of information for a filed return from tax tables, schedules or similar documents provided by the department if the incorrect usage is apparent from the existence of other information on the return.
4. An entry on a return that is inconsistent with an entry on a schedule, form, statement, list or other document filed with the return.
5. An omission of information required on the return to substantiate an entry.
6. An entry on a return of a deduction or credit in an amount that exceeds a statutory limit if the limit is a monetary figure, a percentage, a ratio or a fraction and the items entered into the application of this limit appear on the return, including claiming a deduction or credit that is not authorized by statute for the taxable period.
7. Missing or incorrect taxpayer identification numbers for the purposes of claiming personal exemptions, dependents or credits.
8. An entry of a credit or deduction that requires a preapproval if the credit or deduction has not been preapproved or if the entry is for more than the preapproved amount.
9. An entry of a credit or deduction amount carried forward from a prior year that is outside of the statutory period allowed for the carryforward or is for an amount that is inconsistent with the taxpayer's prior year returns.
Sec. 3. Section 42-1125, Arizona Revised Statutes, is amended to read:
42-1125. Civil penalties; definition
A. If a taxpayer fails to make and file a return for a tax administered pursuant to this article on or before the due date of the return or the due date as extended by the department, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect, four and one‑half percent of the tax required to be shown on such return shall be added to the tax for each month or fraction of a month elapsing between the due date of the return and the date on which it is filed. The total penalty shall not exceed twenty‑five percent of the tax found to be remaining due. The penalty so added to the tax is due and payable on notice and demand from the department. For the purpose of computing the penalty imposed under this subsection, the amount required to be shown as tax on a return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of such month and by the amount of any credit against the tax that may be claimed on the return. If the amount required to be shown as tax on a return is less than the amount shown as tax on such return, the penalty described in this subsection shall be applied by substituting such lower amount.
B. If a taxpayer fails or refuses to file a return on notice and demand by the department, the taxpayer shall pay a penalty of twenty‑five percent of the tax, which is due and payable on notice and demand by the department, in addition to any penalty prescribed by subsection A of this section, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. This penalty is payable on notice and demand from the department.
C. If a taxpayer fails or refuses to furnish any information requested in writing by the department, the department may add a penalty of twenty‑five percent of the amount of any deficiency tax assessed by the department concerning the assessment of which the information was required, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.
D. If a person fails to pay the amount shown as tax on any return within the time prescribed, a penalty of one‑half of one percent, not to exceed a total of ten percent, shall be added to the amount shown as tax for each month or fraction of a month during which the failure continues, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. If the department determines that the person's failure to pay was due to reasonable cause and not due to wilful neglect and that a payment agreement pursuant to section 42‑2057 is appropriate, the department shall not impose the penalty unless the taxpayer fails to comply with the payment agreement. If the taxpayer is also subject to a penalty under subsection A of this section for the same tax period, the total penalties under subsection A of this section and this subsection shall not exceed twenty‑five percent. For the purpose of computing the penalty imposed under this subsection:
1. The amount shown as tax on a return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of that month and by the amount of any credit against the tax that may be claimed on the return.
2. If the amount shown as tax on a return is greater than the amount required to be shown as tax on that return, the penalty shall be applied by substituting the lower amount.
E. If a person fails to pay any amount required to be shown on any return that is not so shown within twenty‑one calendar days after the date of notice and demand, a penalty of one‑half of one percent, not to exceed a total of ten percent, shall be added to the amount of tax for each month or fraction of a month during which the failure continues, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. If the taxpayer is also subject to penalty under subsection A of this section for the same tax period, the total penalties under subsection A of this section and this subsection shall not exceed twenty‑five percent. For the purpose of computing the penalty imposed under this subsection, any amount required to be shown on any return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of that month and by the amount of any credit against the tax that may be claimed on the return.
F. In the case of a deficiency, for which a determination is made of an additional amount due, that is due to negligence but without intent to defraud, the person shall pay a penalty of ten percent of the amount of the deficiency.
G. If part of a deficiency is due to fraud with intent to evade tax, fifty percent of the total amount of the tax, in addition to the deficiency, interest and other penalties provided in this section, shall be assessed, collected and paid as if it were a deficiency.
H. If the amount, whether determined by the department or the taxpayer, required to be withheld by the employer pursuant to title 43, chapter 4 is not paid to the department on or before the date prescribed for its remittance, the department may add a penalty of twenty‑five percent of the amount required to be withheld and paid, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.
I. A person who, with or without intent to evade any requirement of this article or any lawful administrative rule of the department of revenue under this article, fails to file a return or to supply information required under this article or who, with or without such intent, makes, prepares, renders, signs or verifies a false or fraudulent return or statement or supplies false or fraudulent information shall pay a penalty of not more than one thousand dollars. This penalty shall be recovered by the department of law in the name of this state by an action in any court of competent jurisdiction.
J. If the taxpayer files what purports to be a return of any tax administered pursuant to this article but that is frivolous or that is made with the intent to delay or impede the administration of the tax laws, that person shall pay a penalty of five hundred dollars.
K. If any person who is required to file or provide an information return under this title or title 43 or who is required to file or provide a return or report under chapter 3 of this title fails to file the return or report at the prescribed time or in the manner required, or files a return or report that fails to show the information required, that person shall pay a penalty of one hundred dollars for each month or fraction of a month during which the failure continues unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. The total penalties for each return or report under this subsection shall not exceed five hundred dollars.
L. If it appears to the superior court that proceedings before it have been instituted or maintained by a taxpayer primarily for delay or that the taxpayer's position is frivolous or groundless, the court may award damages in an amount not to exceed one thousand dollars to this state. Damages so awarded shall be collected as a part of the tax.
M. A person who is required under section 43‑413 to furnish a statement to an employee and who wilfully furnishes a false or fraudulent statement, or who wilfully fails to furnish a statement required by section 43‑413, is for each such failure subject to a penalty of fifty dollars.
N. A person who is required to collect or truthfully account for and pay a tax administered pursuant to this article, including any luxury privilege tax, and who wilfully fails to collect the tax or truthfully account for and pay the tax, or wilfully attempts in any manner to evade or defeat the tax or its payment, is, in addition to other penalties provided by law, liable for a penalty equal to the total amount of the tax evaded, not collected or not accounted for and paid. Except as provided in subsections U, V and W of this section, no other penalty under this section relating to failure to pay tax may be imposed for any offense to which this subsection applies.
O. For reporting periods beginning from and after February 28, 2011, if a taxpayer who is required under section 42‑1129 to make payment by electronic funds transfer fails to do so, that taxpayer shall pay a penalty of five percent of the amount of the payment not made by electronic funds transfer unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. For the reporting periods beginning on July 1, 2015, the penalty in this subsection applies to any taxpayer who is required under section 42‑3053 to make payment by electronic funds transfer and fails to do so unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.
P. Unless due to reasonable cause and not to wilful neglect:
1. A person who fails to provide that person's taxpayer identification number in any return, statement or other document as required by section 42‑1105, subsection A shall pay a penalty of five dollars for each such failure.
2. A person, when filing any return, statement or other document for compensation on behalf of a taxpayer, who fails to include that person's own taxpayer identification number and the taxpayer's identification number shall pay a penalty of fifty dollars for each such failure.
3. A person, when filing any return, statement or other document without compensation on behalf of a taxpayer, who fails to include that person's own taxpayer identification number and the taxpayer's identification number is not subject to a penalty.
No other penalty under this section may be imposed if the only violation is failure to provide taxpayer identification numbers.
Q. If a taxpayer fails to pay the full amount of estimated tax required by title 43, chapter 5, article 6, a penalty is assessed equal to the amount of interest that would otherwise accrue under section 42‑1123 on the amount not paid for the period of nonpayment, not exceeding ten percent of the amount not paid. The penalty prescribed by this subsection is in lieu of any other penalty otherwise prescribed by this section and in lieu of interest prescribed by section 42‑1123.
R. Beginning January 1, 2015, if a taxpayer continues in business without timely renewing a municipal privilege tax license as prescribed in section 42‑5005, subsection D, a civil penalty of up to twenty-five dollars shall be added to the renewal fee for each jurisdiction.
S. The department of law, with the consent of the department of revenue, may compromise any penalty for which it may bring an action under this section.
T. Penalties shall not be assessed under subsection D of this section on additional amounts of tax paid by a taxpayer at the time the taxpayer voluntarily files an amended return. This subsection does not apply if:
1. The taxpayer is under audit by the department.
2. The amended return was filed on demand or request by the department.
U. In addition to other penalties provided by law, a person who knowingly and intentionally does not comply with any requirement under chapter 3 of this title relating to cigarettes shall pay a penalty of one thousand dollars. A person who knowingly and intentionally does not pay any luxury tax that relates to cigarettes imposed by chapter 3 of this title shall pay a penalty that is equal to ten percent of the amount of the unpaid tax.
V. A manufacturer or importer or a distributor, as defined in section 42‑3001, who knowingly and intentionally sells or possesses cigarettes with false manufacturing labels or cigarettes with counterfeit tax stamps, or who obtains cigarettes through the use of a counterfeit license, shall pay the following penalties:
1. For a first violation involving two thousand or more cigarettes, one thousand dollars.
2. For a subsequent violation involving two thousand or more cigarettes, five thousand dollars.
W. The civil penalties in this section are in addition to any civil penalty under chapter 3, article 10, 11 or 12 of this title.
X. Notwithstanding subsection A of this section, the penalty imposed on a taxpayer that fails to make and file a return for tax administered pursuant to chapter 5 or 6 of this title on or before the due date of the return or the due date as extended by the department, unless it is shown that the failure is due to a reasonable cause and not due to wilful neglect, is four and one-half percent of the tax required to be shown on the return, or twenty-five dollars, whichever is greater. The penalty shall be added to the tax for each month or fraction of a month elapsing between the due date of the return and the date on which it is filed. The total penalty may not exceed twenty-five percent of the tax found to be remaining due, or one hundred dollars, whichever is greater.
Y. Notwithstanding subsection B of this section, the penalty imposed on a taxpayer that fails to file a return pursuant to chapter 5 or 6 of this title on notice and demand by the department is twenty‑five percent of the tax, or one hundred dollars, whichever is greater. The penalty is due and payable on notice and demand by the department, in addition to any penalty prescribed by subsection A of this section, unless it is shown that the failure is due to a reasonable cause and not due to wilful neglect.
X. Z. For the purposes of this section, and only as applied to the taxes imposed by chapter 5, articles 1 through 6 and chapter 6, articles 1, 2 and 3 of this title, "reasonable cause" means a reasonable basis for the taxpayer to believe that the tax did not apply to the business activity or the storage, use or consumption of the taxpayer's tangible personal property in this state.
Sec. 4. Section 42-1126, Arizona Revised Statutes, is amended to read:
42-1126. Fee for bad checks
The department may charge and collect a fee of twenty-five fifty dollars from a taxpayer that offers a check, draft, negotiable order of withdrawal or similar instrument, or an electronic funds transfer, automated clearing house debit or automated clearing house credit drawn on a bank or other depository institution in full or partial payment of a tax administered pursuant to this article if the instrument, transfer, debit or credit is not paid or is dishonored by the institution.
Sec. 5. Section 42-1127, Arizona Revised Statutes, is amended to read:
42-1127. Criminal violation; classification; place of trial; definition
A. It is a class 4 felony to:
1. Corruptly or by force or threats of force or injury:
(a) Attempt to intimidate, impede or injure an employee of the department acting in an official capacity.
(b) Obstruct, impede or attempt to obstruct or impede the administration of this title or title 43.
2. Attempt by means of bribery, misrepresentation, intimidation or force or threats of force to obstruct, delay or prevent the communication of information or testimony relating to a violation of this title or title 43 to an employee or officer of the department, or knowingly injure another personally or injure the person's property on account of the person giving, personally or by any other person, any such information or testimony to an employee of the department.
3. Make, forge, alter or counterfeit with the intent to defraud a stamp or meter impression prepared or prescribed by the department under chapter 3 of this title, or to knowingly utter, publish, pass or tender as true a false, altered, forged or counterfeited stamp or meter impression, or to use a stamp provided for and required by chapter 3 of this title which has already once been used, with the intent to evade the tax imposed by chapter 3 of this title.
4. Tamper with, or cause to be tampered with, any metering machine authorized to be used under chapter 3 of this title.
B. A first-time violation of this subsection may be designated as a class 1 misdemeanor, but otherwise it is a class 5 felony to:
1. Knowingly fail to pay any tax administered pursuant to this article due or believed due by the taxpayer with intent to evade the tax.
2. Knowingly prepare, present or aid, procure or advise in preparing or presenting any return, affidavit, claim or other document which is fraudulent or is false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the taxpayer authorized or required to present the return, affidavit, claim or document.
3. Simulate or falsely or fraudulently execute or sign any license or other required document, or cause the license or document to be falsely or fraudulently executed or advise or aid in such execution, with the intent to conceal or cover up a material fact relating to a tax administered pursuant to this article.
4. Knowingly fail to file a return or supply required information, or falsify or conceal a material fact, document or record, make a false, fictitious or fraudulent statement or representation or make or use a false writing or document knowing it to contain a false, fictitious or fraudulent statement or entry, with intent that the department rely on the false, fictitious or fraudulent statement or entry in determining tax liability under this article.
C. A distributor as defined in section 42‑3001 who violates section 42‑3452, subsection A, paragraph 2 is guilty of a class 1 misdemeanor. If the distributor is convicted of a second violation of section 42‑3452, subsection A, paragraph 2, the department may revoke the distributor's license issued pursuant to section 42‑3401.
D. A distributor as defined in section 42‑3001 who violates any provision of section 42‑3401, section 42‑3452, subsection A, paragraph 1 or section 42‑3456 is guilty of a class 1 misdemeanor. If the distributor is a licensee under section 42‑3401 and is convicted of a second violation of section 42‑3456, the department may revoke the distributor's license.
E. It is a class 3 felony for any person to:
1. Except as provided in section 42‑3457, transport, in an unstamped or unlawfully stamped condition, for the purpose of sale ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6, 7 or 9 of this title.
2. Wilfully sell or offer for sale, in an unstamped or unlawfully stamped condition, ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6 or 7 of this title.
3. Wilfully sell or offer for sale off an Indian reservation ten thousand or more cigarettes that are stamped for on‑reservation sales.
F. For the purposes of subsection E of this section, the possession or transportation in this state at any time by any person, other than a licensed distributor, as defined in section 42‑3001, of ten thousand or more cigarettes in an unstamped or unlawfully stamped condition, other than in interstate shipment consistent with federal contraband cigarette trafficking laws (18 United States Code chapter 114), is presumptive evidence that the cigarettes:
1. Are possessed or transported for the purpose of sale.
2. Are subject to the taxes imposed by chapter 3, article 2, 6, 7 or 9 of this title.
G. A person who knowingly sells a luxury on which the tax has not been paid or accounted for as required by chapter 3 of this title is guilty of a class 1 misdemeanor.
H. A retailer who possesses any package, bottle or other container containing a luxury which does not bear the stamps required to be affixed by chapter 3 of this title is guilty of a class 1 misdemeanor.
I. A person is guilty of a class 3 misdemeanor who:
1. Is engaged in the business of selling a luxury, either at wholesale or retail, and who knowingly refuses or fails to produce on demand by the department invoices of all luxuries the person purchased or received within two years immediately before the demand, unless the person shows by satisfactory proof that the person is unable to do so for reasons beyond the person's control.
2. Makes a false entry on an invoice, package or container of luxuries, or who with intent to avoid the taxes imposed by chapter 3 of this title presents a false entry for inspection of the department.
3. Knowingly prevents or hinders the department from making a full inspection of any place where a luxury is sold or stored, or knowingly prevents or hinders the inspection of invoices, books, records or papers required to be kept.
4. Violates any provision of this article or an administrative rule adopted by the department for which no other penalty is prescribed.
J. The place of trial for the offenses enumerated in this section is in the county of residence or principal place of business of the defendant or defendants. If the defendant has no residence or principal place of business in this state, the trial shall be held in Maricopa county.
K. A person who defrauds this state by violating any requirement under chapter 3 of this title, with criminal intent to evade any such requirement, is guilty of a class 4 felony and shall pay a penalty of three times the retail value of the cigarettes involved.
L. A person who knowingly violates any requirement under chapter 3 of this title, with the criminal intent to evade any such requirement, is guilty of a class 6 felony.
M. A person who knowingly sells or offers to sell off an Indian reservation more than two thousand but less than ten thousand cigarettes that are stamped for on‑reservation sales, with the criminal intent to evade the tax imposed by chapter 3 of this title, is guilty of a class 5 felony.
N. Any distributor, as defined in section 42‑3001, who sells or possesses more than two thousand cigarettes with false manufacturing labels or cigarettes with counterfeit tax stamps, with the criminal intent to evade any requirement under chapter 3 of this title, is guilty of a class 5 felony and shall pay a penalty of:
1. For a first violation involving two thousand or more cigarettes, two thousand dollars or three times the retail value of the cigarettes, whichever is greater.
2. For a subsequent violation involving two thousand or more cigarettes, fifty thousand dollars or three times the retail value of the cigarettes, whichever is greater.
O. For the purposes of this section, "luxury" means any article, object or device on which a tax is imposed under chapter 3 of this title.
Sec. 6. Section 42-1129, Arizona Revised Statutes, is amended to read:
42-1129. Payment of tax by electronic funds transfer
A. The department may require by rule, consistent with the state treasurer's cash management policies, that any taxpayer that owed twenty thousand dollars or more for the preceding taxable year in connection with any tax administered pursuant to this article, except individual income tax, shall pay the tax liability be paid on or before the payment date prescribed by law in monies that are immediately available to the state on the date of the transfer as provided by subsection B of this section by any taxpayer that owes:
1. Twenty thousand dollars or more for any taxable year ending before January 1, 2019.
2. Ten thousand dollars or more for any taxable year beginning from and after December 31, 2018 through December 31, 2019.
3. Five thousand dollars or more for any taxable year beginning from and after December 31, 2019 through December 31, 2020.
4. Five hundred dollars or more for any taxable year beginning from and after December 31, 2020.
B. A payment in immediately available monies shall be made by electronic funds transfer, with the state treasurer's approval, that ensures the availability of the monies to this state on the date of payment.
C. A taxpayer may apply to the director, on a form prescribed by the department, for an annual waiver from the electronic payment requirement prescribed by subsection B of this section. The application must be received by the department on or before December 31. the director may grant the waiver, which may be renewed, if any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by the director.
C. D. The taxpayer shall furnish evidence as prescribed by the department that the payment was remitted on or before the due date.
D. E. A taxpayer who is required to make payment by electronic funds transfer but who fails to do so is subject to the civil penalties prescribed by section 42‑1125, subsection O.
E. F. A failure to make a timely payment in immediately available monies as prescribed pursuant to this section is subject to the civil penalties prescribed by section 42‑1125, subsection D.
Sec. 7. Section 42-2075, Arizona Revised Statutes, is amended to read:
42-2075. Audit duration
A. An audit of a taxpayer's return or claim for refund shall not exceed two years from the date of initial audit contact to the issuance of a notice of proposed deficiency assessment or proposed overpayment, except:
1. An audit of a fraudulent tax return.
2. An audit delayed as the result of the taxpayer's bankruptcy proceeding.
3. An audit in which the department has issued a letter to the taxpayer or the taxpayer's representative citing the potential imposition of the penalty described in section 42‑1125, subsection C for the taxpayer's failure or refusal to provide information pursuant to the department's written request.
4. An audit involving proceedings concerning the enforcement or validity of a subpoena or subpoena duces tecum issued pursuant to section 42‑1006, subsection C.
5. An audit involving a proceeding under section 42‑2056.
6. An audit where in which a taxpayer has filed a petition pursuant to section 43‑1148, but only in relation to the effect of the petition request.
7. An audit in which the taxpayer provides a written request to extend the audit beyond the two‑year period. A request for extension under this paragraph is not a substitute for a waiver of the statute of limitations pursuant to section 42‑1104, subsection B, paragraph 9. However, a waiver of the statute of limitations is considered to be a written request to extend the audit beyond the two‑year period under this paragraph.
B. This section applies to audits conducted by the department and to audits conducted by the department and cities and towns pursuant to section 42‑6002.
C. For the purposes of subsection A of this section, an "initial audit contact" means occurs:
1. For a field audit, on the date of the first meeting between the taxpayer or the taxpayer's representative and a member of the department's audit staff.
2. For a desk or office audit or a review conducted pursuant to section 42‑1109, on the date of the first letter to the taxpayer regarding the audit or review. A letter is not considered to be regarding the audit or review if the letter is only requesting one or more of the following:
(a) The required filing of a tax return.
(b) A copy of the taxpayer's federal return.
(c) Required documents that the taxpayer failed to include with the return.
(d) Documentation to resolve an inconsistency within the return or a discrepancy between the return and other information that is received from a third party or that is otherwise already in the department's possession, if the adjustment of the return due to the inconsistency or discrepancy would be considered a nonaudit adjustment under section 42‑1108, subsection F.
(e) Information that was left out of the taxpayer's return because a submitted form was incomplete.
(f) Replacements for documents that are not legible.
Sec. 8. Section 42-3053, Arizona Revised Statutes, is amended to read:
42-3053. Method of payment; receipts; electronic filings of returns, reports and other documents; license applications and requests for refund or rebate; definition
A. All orders for the purchase or receipt of tax stamps required under this chapter must be submitted pursuant to an electronic filing program established by the department. Except as provided in subsection B of this section, all remittances of taxes for the purchase of Arizona tax stamps imposed by this chapter shall be made by bank draft, check, cashier's check, money order, cash or electronic funds transfer to the department, which shall issue receipts to the taxpayers in monies that are immediately available to this state on the date of transfer. A remittance other than cash does not constitute a final discharge of liability for the tax levied by this chapter until it has been paid in cash to the department.
B. Beginning on July 1, 2015, Any distributor remitting any taxes levied under section 42-3302 or under this chapter on any tobacco product other than cigarettes that is subject to tax under this chapter is required to pay the tax liability on or before the payment date in monies that are immediately available to the this state on the date of transfer. The payment in immediately available monies must be made by electronic funds transfer and with the state treasurer's approval. The distributor must furnish evidence as prescribed by the department that the payment was remitted on or before the payment due date. A distributor who is required to make payment by electronic funds transfer under this chapter and who fails to do so is subject to the civil penalties prescribed by section 42‑1125, subsection O. A distributor who fails to make a timely payment in immediately available monies as prescribed by this subsection is subject to civil penalties prescribed by section 42‑1125, subsection D.
C. Beginning on July 1, 2015, a distributor of tobacco products A person is required to electronically file any report, or return or other document required under this chapter pursuant to an electronic filing program established by the department. The report, or return or other document is deemed filed and received by the department on the date of the electronic postmark pursuant to section 42‑1105.02. A distributor who is required to electronically file any report or return under this chapter and fails to do so is subject to the civil penalty prescribed by section 42‑1125, subsection K. For the purposes of this subsection, "electronic filing program" has the same meaning prescribed in section 42‑1105.02.
D. An application for a license issued pursuant to section 42-3401 and any request for a refund or rebate of taxes paid on tobacco products made pursuant to section 42-3406 must be submitted pursuant to an electronic filing program established by the department. The application or request is considered to be filed and received by the department on the date of the electronic postmark pursuant to section 42-1105.02. The department may not consider applications or requests that fail to comply with this subsection. An applicant shall pay the application fee required under section 42-3401 to the department by electronic funds transfer.
E. A distributor who is required to make payment by electronic funds transfer under this chapter and who fails to do so is subject to the civil penalties prescribed by section 42-1125, subsection O. A distributor who fails to make a timely payment in immediately available monies as prescribed by this section is subject to civil penalties prescribed by section 42-1125, subsection D. A person who is required to electronically file any report, return or document under this chapter but fails to do so is subject to the civil penalty prescribed by section 42‑1125, subsection K.
F. For the purposes of this section, "electronic filing program" has the same meaning prescribed in section 42-1105.02.
Sec. 9. Section 42-3352, Arizona Revised Statutes, is amended to read:
42-3352. Reports of distillers and manufacturers
A. Every distiller or manufacturer of distilled spirits and vinous and malt liquors who that sells any of those products to wholesalers within this state shall, at the time of making the sale, file with the department maintain in its records a copy of the invoice of the sale, showing in detail:
1. The kind of liquor or beverage sold.
2. The quantities of each.
3. The size of the container and the weight of the contents.
4. The alcoholic content where if required by section 42‑3052.
5. The name of the person, firm or corporation to whom sold.
B. A distiller or manufacturer shall make the invoices required to be kept pursuant to subsection A of this section available to the department on request.
Sec. 10. Section 42-3353, Arizona Revised Statutes, is amended to read:
42-3353. Return and payment by cider or malt liquor wholesalers
A. Every wholesaler of cider or malt liquors purchasing cider or malt liquors for resale within the state shall pay the tax under this chapter on all such liquors so purchased and add the amount of the tax to the sales price.
B. The wholesaler shall pay the tax to the department monthly on or before the twentieth day of the month next succeeding the month in which the tax accrues.
C. On or before the date prescribed by subsection B of this section, the wholesaler shall prepare a sworn return for the month in which the tax accrues in the form prescribed by the department, showing:
1. The amount of cider or malt liquors purchased during the month in which the tax accrues.
2. The amount of tax for the period covered by the return.
3. Any other information that the department deems necessary for the proper administration of this chapter.
D. The taxpayer shall deliver the return, together with a remittance of the amount of the tax due, to the department.
E. Any taxpayer who that fails to pay the tax within ten days from the date upon on which the payment becomes due shall be is subject to and shall pay a penalty determined under section 42‑1125, plus interest at the rate determined pursuant to section 42‑1123 from the time the tax was due and payable until paid.
F. For reporting periods beginning from and after December 31, 2019, or when the department has established an electronic filing program, whichever is later, a taxpayer shall file electronically any report or return required under this chapter. The report or return is considered to be filed and received by the department on the date of the electronic postmark pursuant to section 42-1105.02.
Sec. 11. Section 42-3354, Arizona Revised Statutes, is amended to read:
42-3354. Return and payment by spirituous or vinous liquor wholesalers
A. Every wholesaler of spirituous liquors selling spirituous liquors within the state shall pay the tax under this chapter on all such liquor sold within the state and add the amount of the tax to the sales price.
B. Every wholesaler of vinous liquors selling vinous liquors other than ciders as defined in section 42‑3001, paragraph 2 within this state shall pay the tax under this chapter on all such liquors sold within this state and add the amount of tax to the sales price.
C. The wholesaler shall pay the tax to the department monthly on or before the twentieth day of the month next succeeding the month in which the tax accrues.
D. On or before the date prescribed by subsection C of this section, the wholesaler shall prepare a sworn return for the month in which the tax accrues in the form prescribed by the department, showing:
1. The amount of spirituous liquors sold in this state during the month in which the tax accrues.
2. The amount of vinous liquors other than ciders as defined in section 42‑3001, paragraph 2 sold in the state during the month in which the tax accrues.
3. The amount of tax for the period covered by the return.
4. Any other information that the department deems necessary for the proper administration of this chapter.
E. The wholesaler shall deliver the return, together with a remittance of the amount of the tax due, to the department.
F. Any taxpayer who that fails to pay the tax within ten days from the date upon on which the payment becomes due shall be is subject to and shall pay a penalty determined under section 42‑1125, plus interest at the rate determined pursuant to section 42‑1123 from the time the tax was due and payable until paid.
G. For reporting periods beginning from and after December 31, 2019, or when the department has established an electronic filing program, whichever is later, each taxpayer shall file electronically any report or return required under this chapter. The report or return is considered to be filed and received by the department on the date of the electronic postmark pursuant to section 42-1105.02.
Sec. 12. Section 42-3355, Arizona Revised Statutes, is amended to read:
42-3355. Return and payment by farm wineries, manufacturers, direct shipment licensees, microbreweries and craft distillers
A. Every farm winery selling vinous liquor at retail or to a retail licensee pursuant to title 4, chapter 2 manufactured or produced on the premises, producer of vinous liquor that sells at retail pursuant to section 4‑243.02 or direct shipment licensee that sells pursuant to section 4‑203.04 shall pay the tax under this chapter on all such liquor sold at retail or to a retail licensee within this state and add the amount of the tax to the sales price.
B. Every microbrewery selling malt liquor at retail or to a retail licensee pursuant to title 4, chapter 2 manufactured or produced on the premises or a manufacturer of beer that sells at retail pursuant to section 4‑243.02 shall pay the tax under this chapter on all malt liquor sold at retail or to a retail licensee within this state and add the amount of the tax to the sales price.
C. Every craft distiller selling spirituous liquor at retail or to a retail licensee pursuant to title 4, chapter 2, manufactured or produced on the premises or a distiller of spirituous liquor that sells at retail pursuant to section 4‑243.02 shall pay the tax under this chapter on all spirituous liquor sold at retail or to a retail licensee within this state and add the amount of the tax to the sales price.
D. The farm winery, manufacturer, microbrewery, craft distiller or direct shipment licensee shall pay the tax to the department monthly on or before the twentieth day of the month next succeeding the month in which the tax accrues.
E. On or before that date, the farm winery, manufacturer, microbrewery, craft distiller or direct shipment licensee shall prepare a sworn return for the month in which the tax accrues in the form prescribed by the department, showing:
1. The amount of liquors or beer sold in this state during the month in which the tax accrues.
2. The amount of tax for the period covered by the return.
3. Any other information that the department deems necessary for the proper administration of this chapter.
F. The farm winery, manufacturer, microbrewery, craft distiller or direct shipment licensee shall deliver the return, together with a remittance of the amount of the tax due, to the department.
G. Any taxpayer who that fails to pay the tax within ten days after the date on which the payment becomes due is subject to and shall pay a penalty determined under section 42‑1125, plus interest at the rate determined pursuant to section 42‑1123 from the time the tax was due and payable until paid.
H. For reporting periods beginning from and after December 31, 2019, or when the department has established an electronic filing program, whichever is later, each taxpayer shall file electronically any report or return required under this chapter. The report or return is considered to be filed and received by the department on the date of the electronic postmark pursuant to section 42-1105.02.
Sec. 13. Section 42-3462, Arizona Revised Statutes, is amended to read:
42-3462. Cigarette and roll‑your‑own tobacco; filing requirements; definition
A. Each distributor shall file a return in a form prescribed by the department for each place of business on or before the twentieth day of the month next succeeding the month for which the return is filed. The return shall contain all of the following:
1. The brand names and quantities of each brand of cigarettes and roll-your-own tobacco in possession at the beginning and end of the reporting period.
2. The brand names and quantities of each brand of cigarettes and roll-your-own tobacco received during the reporting period and the name and address of each person from whom each product was received.
3. The brand names and quantities of each brand of cigarettes and roll-your-own tobacco distributed or shipped into this state or between locations in this state during the reporting period, except for sales directly to consumers, and the name and address of each person to whom each product was distributed or shipped, with reference to the dates of distribution or shipment and corresponding invoice numbers from the invoices documenting the distribution or shipments.
4. The brand names and quantities of each brand of cigarettes and roll‑your‑own tobacco distributed or shipped to any destination wherever located, including the quantities reported under paragraph 3 of this subsection during the reporting period, except for sales directly to consumers, and the name and address of each person to whom each product was distributed or shipped, with reference to the dates of distribution or shipment and corresponding invoice numbers from the invoices documenting the distribution or shipments.
5. The brand names and quantities of each brand of cigarettes and roll-your-own tobacco sold to consumers that are itemized to show sales to consumers in this state and sale to consumers outside of this state.
6. Copies of the customs certificates with respect to such cigarettes and roll-your-own tobacco required to be submitted by 19 United States Code section 1681a(c).
7. The name and address of each nonparticipating manufacturer of each brand of cigarettes and roll-your-own tobacco identified by the distributor in the return.
8. The number of individual cigarettes and ounces of roll-your-own tobacco of each brand of each nonparticipating manufacturer sold in this state by the distributor during the preceding month, separately stating each of the following:
(a) The number of cigarette packages sold and the number of individual cigarettes in each package.
(b) The number of roll-your-own tobacco containers sold and the number of ounces of roll-your-own tobacco in each container.
9. The amount of luxury taxes paid or to be paid on the cigarettes and roll‑your‑own tobacco prescribed in paragraph 8 of this subsection, separately stating each of the following:
(a) The amount of luxury taxes paid by purchasing and affixing tax stamps to cigarette packages.
(b) The amount of luxury taxes to be paid for roll-your-own tobacco containers.
(c) Any other amount of excise taxes to be paid on the cigarettes.
10. The number of individual cigarettes and ounces of roll-your-own tobacco of each brand of each nonparticipating manufacturer received by the distributor, separately stating each of the following:
(a) The number of cigarette packages received and the number of individual cigarettes in each package.
(b) The number of roll‑your‑own tobacco containers received and the number of and ounces of roll‑your‑own tobacco in each container.
11. The number of individual cigarettes and ounces of roll-your-own tobacco of each brand of each nonparticipating manufacturer that the distributor exported from this state without payment of Arizona luxury taxes, separately stating each of the following:
(a) The number of cigarette packages exported and the number of individual cigarettes in each package.
(b) The number of roll‑your‑own tobacco containers exported and the number of ounces of roll‑your‑own tobacco in each container.
12. The number of individual cigarettes and ounces of roll‑your‑own tobacco of each brand of each nonparticipating manufacturer for which the distributor obtained a refund under section 42‑3008, separately stating each of the following:
(a) The number of cigarette packages for which the distributor obtained a refund and the number of individual cigarettes in each package.
(b) The number of roll‑your‑own tobacco containers for which the distributor obtained a refund and the number of ounces of roll-your-own tobacco in each container.
13. The invoice, in the form and manner prescribed by the department, for the following transactions:
(a) The distributor's purchase or acquisition of any nonparticipating manufacturer's cigarettes received or sold by the tobacco distributor in this state.
(b) The distributor's export, if any, of any nonparticipating manufacturer's cigarettes from this state.
B. Manufacturers and importers who ship cigarettes and roll‑your‑own tobacco into or in this state shall file a monthly report with, and in the form and manner prescribed by, the department. The report shall contain the information regarding cigarettes described under subsection A, paragraph 3 of this section.
B. A person who sells, ships or transfers cigarettes and roll‑your‑own tobacco for sale, shipment or transfer into or within this state shall file a monthly report with the department on the tenth day of each month in the form and manner prescribed by section 42-3053, subsection C. The report shall contain information regarding each shipment of cigarettes and roll-your-own tobacco into this state during the previous calendar month, including the date of shipment, the name and address of the person to whom the shipment was made and the name, address and telephone number of the person delivering the shipment to the recipient on behalf of the seller. The report shall also include the brand names and quantities of cigarettes and roll-your-own tobacco contained in each shipment, with invoices or references to invoice number documenting each shipment.
C. Distributor reports that are submitted under subsection A of this section shall be itemized to disclose the quantity of reported cigarettes bearing tax stamps of this state, tax exempt stamps of this state, stamps of another state and unstamped cigarettes. The distributor reports shall also include, if applicable, the following:
1. The quantity of Arizona tax and tax exempt stamps that were not affixed to cigarettes.
2. The quantity of Arizona tax and tax exempt stamps that the distributor possessed at the beginning and end of the reporting period.
3. The quantity of each type of Arizona stamp received during the reporting period.
4. The quantity of each type of Arizona stamp applied during the reporting period.
D. The department may adopt rules requiring additional information in the monthly reports as necessary for the purposes of enforcing this article.
E. For the purposes of this section, "importer" and "manufacturer" have has the same meanings meaning prescribed in section 42‑3451.
Sec. 14. Section 42-5005, Arizona Revised Statutes, is amended to read:
42-5005. Transaction privilege tax and municipal privilege tax licenses; fees; renewal; revocation; violation; classification
A. Every person who receives gross proceeds of sales or gross income on which a transaction privilege tax is imposed by this article and who desires to engage or continue in business shall apply to the department for an annual transaction privilege tax license accompanied by a fee of twelve dollars. A person shall not engage or continue in business until the person has obtained a transaction privilege tax license.
B. A person desiring to engage or continue in business within a city or town that imposes a municipal privilege tax shall apply to the department of revenue for an annual municipal privilege tax license accompanied by a fee of up to fifty dollars, as established by ordinance of the city or town. The person shall submit the fee with each new license application. The person may not engage or continue in business until the person has obtained a municipal privilege tax license. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
C. A transaction privilege tax license is valid only for the calendar year in which it is issued, but it may be renewed for the following calendar year. There is no fee for the renewal of the transaction privilege tax license. The transaction privilege tax license must be renewed at the same time and in the manner as the municipal privilege tax license renewal.
D. A municipal privilege tax license is valid only for the calendar year in which it is issued, but it may be renewed for the following calendar year by the payment of a license renewal fee of up to fifty dollars. The renewal fee is due and payable on January 1 and is considered delinquent if not received on or before the last business day of January. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
E. A licensee that remains in business after the municipal privilege tax license has expired is subject to the payment of the license renewal fee and the civil penalty prescribed in section 42‑1125, subsection R.
F. If the applicant is not in arrears in payment of any tax imposed by this article, the department shall issue a license authorizing the applicant to engage and continue in business on the condition that the applicant complies with this article. The license number shall be continuous.
G. The transaction privilege tax license and the municipal privilege tax license are not transferable on a complete change of ownership or change of location of the business. For the purposes of this subsection:
1. "Location" means the business address appearing in the application for the license and on the transaction privilege tax or municipal privilege tax license.
2. "Ownership" means any right, title or interest in the business.
3. "Transferable" means the ability to convey or change the right or privilege to engage or continue in business by virtue of the issuance of the transaction privilege tax or municipal privilege tax license.
H. When the ownership or location of a business on which a transaction privilege tax or municipal privilege tax is imposed has been changed within the meaning of subsection G of this section, the licensee shall surrender the license to the department. The license shall be reissued to the new owners or for the new location on application by the taxpayer and payment of the twelve‑dollar fee for a transaction privilege tax license and a fee of up to fifty dollars per jurisdiction for a municipal privilege tax license. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
I. A person who is engaged in or conducting a business in two or more locations or under two or more business names shall procure a transaction privilege tax license for each location or business name regardless of whether all locations or business names are reported on a consolidated return under a single transaction privilege tax license number. This requirement shall not be construed as conflicting with section 42‑5020.
J. A person who is engaged in or conducting a business in two or more locations or under two or more business names shall procure a municipal privilege tax license for each location or business name regardless of whether all locations or business names are reported on a consolidated return.
K. A person who is engaged in or conducting business at two or more locations or under two or more business names and who files a consolidated return under a single transaction privilege tax license number as provided by section 42‑5020 is required to pay only a single municipal privilege tax license renewal fee for each local jurisdiction pursuant to subsection D of this section. A person who is engaged in or conducting business at two or more locations or under two or more business names and who does not file a consolidated return under a single license number is required to pay a license renewal fee for each location or license in a local jurisdiction.
L. For the purposes of this chapter and chapter 6 of this title, an online lodging marketplace, as defined in section 42‑5076, may register with the department for a license for the payment of taxes levied by this state and one or more counties, cities, towns or special taxing districts, at the election of the online lodging marketplace, for taxes due from an online lodging operator on any online lodging transaction facilitated by the online lodging marketplace, subject to sections 42‑5076 and 42‑6009.
M. For the purposes of this chapter and chapter 6 of this title, a person who is licensed pursuant to title 32, chapter 20 and who files an electronic consolidated tax return for individual real properties under management on behalf of the property owners may be licensed with the department for the payment of taxes levied by this state and by any county, city or town with respect to those properties.
N. If a person violates this article or any rule adopted under this article, the department upon hearing may revoke any transaction privilege tax or municipal privilege tax license issued to the person. The department shall provide ten days' written notice of the hearing, stating the time and place and requiring the person to appear and show cause why the license or licenses should not be revoked. The department shall provide written notice to the person of the revocation of the license. The notices may be served personally or by mail pursuant to section 42‑5037. After revocation, the department shall not issue a new license to the person unless the person presents evidence satisfactory to the department that the person will comply with this article and with the rules adopted under this article. The department may prescribe the terms under which a revoked license may be reissued.
O. The department may revoke any transaction privilege tax or municipal privilege tax license issued to any person who fails for thirteen consecutive months to make and file a return required by this article on or before the due date or the due date as extended by the department unless the failure is due to a reasonable cause and not due to wilful neglect.
O. P. A person who violates any provision of this section is guilty of a class 3 misdemeanor.
Sec. 15. Section 42-5014, Arizona Revised Statutes, is amended to read:
42-5014. Return and payment of tax; estimated tax; extensions; abatements
A. Except as provided in subsection B, C, D, E or F of this section, the taxes levied under this article:
1. Are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of the month next succeeding the month in which the tax accrues.
2. Are delinquent as follows:
(a) For taxpayers that are required or elect to file and pay electronically in any month, if not received by the department on or before the last business day of the month.
(b) For all other taxpayers, if not received by the department on or before the business day preceding the last business day of the month.
B. The department, for any taxpayer whose estimated annual liability for taxes imposed or administered by this article or chapter 6 of this title is between two thousand dollars and eight thousand dollars, shall authorize such taxpayer to pay such taxes on a quarterly basis. The department, for any taxpayer whose estimated annual liability for taxes imposed by this article is less than two thousand dollars, shall authorize such taxpayer to pay such taxes on an annual basis. For the purposes of this subsection, the taxes due under this article:
1. For taxpayers that are authorized to pay on a quarterly basis, are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of the month next succeeding the quarter in which the tax accrues.
2. For taxpayers that are authorized to pay on an annual basis, are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of January next succeeding the year in which the tax accrues.
3. Are delinquent as follows:
(a) For taxpayers that are required or elect to file and pay electronically in any quarter, if not received by the department on or before the last business day of the month.
(b) For all other taxpayers that are required to file and pay quarterly, if not received by the department on or before the business day preceding the last business day of the month.
(c) For taxpayers that are required or elect to file and pay electronically on an annual basis, if not received by the department on or before the last business day of January.
(d) For all other taxpayers that are required to file and pay annually, if not received by the department on or before the business day preceding the last business day of January.
C. The department may require a taxpayer whose business is of a transient character to file the return and remit the taxes imposed by this article on a daily, a weekly or a transaction by transaction basis, and those returns and payments are due and payable on the date fixed by the department without a grace period otherwise allowed by this section. For the purposes of this subsection, "business of a transient character" means sales activity by a taxpayer not regularly engaged in selling within the state conducted from vehicles, portable stands, rented spaces, structures or booths, or concessions at fairs, carnivals, circuses, festivals or similar activities for not more than thirty consecutive days.
D. If the business entity under which a taxpayer reports and pays income tax under title 43 has an annual total tax liability under this article, article 6 of this chapter and chapter 6, article 3 of this title of one million dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this article, article 6 of this chapter or chapter 6, article 3 of this title are collected, or if the taxpayer can reasonably anticipate such liability in the current year, the taxpayer shall report on a form prescribed by the department and pay an estimated tax payment each June. Any other taxpayer may voluntarily elect to pay the estimated tax payment pursuant to this subsection. The payment shall be made on or before June 20 and is delinquent if not received by the department on or before the business day preceding the last business day of June for those taxpayers electing to file by mail, or delinquent if not received by the department on the business day preceding the last business day of June for those taxpayers electing to file in person. The estimated tax paid shall be credited against the taxpayer's tax liability under this article, article 6 of this chapter and chapter 6, article 3 of this title for the month of June for the current calendar year. The estimated tax payment shall equal either:
1. One‑half of the actual tax liability under this article plus one‑half of any tax liability under article 6 of this chapter and chapter 6, article 3 of this title for May of the current calendar year.
2. The actual tax liability under this article plus any tax liability under article 6 of this chapter and chapter 6, article 3 of this title for the first fifteen days of June of the current calendar year.
E. An online lodging marketplace, as defined in section 42‑5076, that is registered with the department pursuant to section 42‑5005, subsection L:
1. Shall remit to the department the applicable taxes payable pursuant to section 42‑5076 and chapter 6 of this title with respect to each online lodging transaction, as defined in section 42‑5076, facilitated by the online lodging marketplace.
2. Shall report the taxes monthly and remit the aggregate total amounts for each of the respective taxing jurisdictions.
3. Shall not be required to list or otherwise identify any individual online lodging operator, as defined in section 42‑5076, on any return or any attachment to a return.
F. A person who is licensed pursuant to title 32, chapter 20 and who is licensed with the department pursuant to section 42‑5005, subsection M shall:
1. File a consolidated return monthly with respect to all managed properties for which the licensee files an electronic consolidated tax return pursuant to section 42‑6013.
2. Remit to the department the aggregate total amount of the applicable taxes payable pursuant to this chapter and chapter 6 of this title for all of the respective taxing jurisdictions with respect to the managed properties.
G. The taxpayer shall prepare a return showing the amount of the tax for which the taxpayer is liable for the preceding month, and shall mail or deliver the return to the department in the same manner and time as prescribed for the payment of taxes in subsection A of this section. If the taxpayer fails to file the return in the manner and time as prescribed for the payment of taxes in subsection A of this section, the amount of the tax required to be shown on the return is subject to the penalty imposed pursuant to section 42‑1125, subsection A, without any reduction for taxes paid on or before the due date of the return. The return shall be verified by the oath of the taxpayer or an authorized agent or as prescribed by the department pursuant to section 42‑1105, subsection B.
H. Any person who is taxable under this article and who makes cash and credit sales shall report such cash and credit sales separately and on making application may obtain from the department an extension of time for payment of taxes due on the credit sales. The extension shall be granted by the department under such rules as the department prescribes. When the extension is granted, the taxpayer shall thereafter include in each monthly report all collections made on such credit sales during the month next preceding and shall pay the taxes due at the time of filing such report.
I. The returns required under this article shall be made on forms prescribed by the department and shall capture data with sufficient specificity to meet the needs of all taxing jurisdictions.
J. Any person who is engaged in or conducting business in two or more locations or under two or more business names shall file the return required under this article by electronic means using an electronic filing program established by the department.
K. For taxable periods beginning from and after December 31, 2017, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of twenty thousand dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
L. For taxable periods beginning from and after December 31, 2018, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of ten thousand dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
M. For taxable periods beginning from and after December 31, 2019, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of five thousand dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
N. For taxable periods beginning from and after December 31, 2020, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of five hundred dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
O. Any taxpayer that is required to report and pay using an electronic filing program established by the department may apply to the director, on a form prescribed by the department, for an annual waiver from the electronic filing requirement. The director may grant a waiver, which may be renewed, if any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by the director.
P. A waiver is not required if the return cannot be electronically filed for reasons beyond the taxpayer's control, including situations in which the taxpayer was instructed by either the internal revenue service or the department of revenue to file by paper.
K. Q. The department, for good cause, may extend the time for making any return required by this article and may grant such reasonable additional time within which to make the return as it deems proper, but the time for filing the return shall not be extended beyond the first day of the third month next succeeding the regular due date of the return.
L. R. The department, with the approval of the attorney general, may abate small tax balances if the administration costs exceed the amount of tax due.
M. S. For the purposes of subsection D of this section, "taxpayer" means the business entity under which the business reports and pays state income taxes regardless of the number of offices at which the taxes imposed by this article, article 6 of this chapter or chapter 6, article 3 of this title are collected.
Sec. 16. Section 42-5017, Arizona Revised Statutes, is amended to read:
42-5017. Credit for accounting and reporting expenses; definition
A. A credit is allowed against the taxes imposed by this article and article 5 of this chapter for expenses incurred by the taxpayer in accounting and reporting those taxes. The credit is: equal to
1. For a taxpayer who files a paper return, one per cent percent of the amount of tax due but not to exceed a total of ten thousand dollars in any calendar year for the combined total of all business premises of a the taxpayer.
2. For a taxpayer who files using an electronic filing program established by the department, one and two‑tenths percent of the amount of tax due but not to exceed a total of twelve thousand dollars in any calendar year for the combined total of all business premises of the taxpayer.
B. Estimated taxes under section 42‑5014, subsection D are not considered a separate reporting period.
B. C. A taxpayer shall claim the credit for each tax period on forms prescribed and furnished by the department, which may be incorporated in the return form prescribed pursuant to section 42‑5014. A claim for credit is not allowed if the taxpayer fails to pay the tax due, plus any estimated tax liability, before the payment becomes delinquent. A claim for the increased credit amount under subsection A, paragraph 2 of this section is not allowed if the taxpayer fails to file using the department's electronic filing program for any taxable period during the calendar year. The department shall recapture any credit amounts claimed by the taxpayer but disallowed.
C. D. As used in For the purposes of this section, "taxpayer" means the business entity under which the business reports for state income tax purposes or an entity that is exempt from state income tax.
Sec. 17. Section 42-13002, Arizona Revised Statutes, is amended to read:
42-13002. Relationship between department and county assessors
A. The department shall:
1. Exercise general supervision over county assessors in administering the property tax laws to ensure that all property is uniformly valued for property tax purposes.
2. Prescribe forms to be used by county assessors for:
(a) Listing and valuing property for tax purposes.
(b) Reporting changes in valuations.
(c) Such other purposes as the department may require under this title.
3. Assist county assessors:
(a) In maintaining uniform maps and records.
(b) In placing on the rolls the valuations determined under this chapter.
(c) To ensure a uniform valuation of all property throughout the state for property tax purposes, including providing the services of department personnel to the assessors. The department may charge to the county the costs of department personnel provided to that county.
4. Compile and report to the governor, the president of the senate and the speaker of the house of representatives the processes and procedures used by each county to identify and reclassify property that is rented while classified as class three. The report shall be submitted by November 15 each year and shall also contain the following information:
(a) The number of properties and the assessed valuation of properties reclassified from class three to class four.
(b) The amount of payments of additional state aid to education avoided in the previous fiscal year.
(c) Recommendations regarding improvements to establish uniform processes and performance among the counties.
B. The department may:
1. Require the reclassification of property, if necessary.
2. Require information from the county assessor's office and the county treasurer's office to verify compliance with the procedures prescribed by section 42‑12052.
3. Audit the valuation of new construction as determined by each county as prescribed by section 42‑17051.
C. The director and county assessors shall meet at the state capitol, or at a place designated by the director, at least twice each year to consider matters relating to property taxation. The traveling expenses of assessors in attending these meetings shall be paid by the respective counties.
Sec. 18. Section 43-323, Arizona Revised Statutes, is amended to read:
43-323. Place and form of filing returns
A. All returns required by this title shall be in such a form as the department may from time to time prescribe and shall be filed with the department.
B. The department shall prescribe a short form return for individual taxpayers who:
1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43‑1012.
2. Elect to claim the optional standard deduction pursuant to section 43‑1041.
3. Elect not to file for credits against income tax liability other than those contained in sections 43‑1072, 43‑1072.01 and 43‑1073.
4. Are not required to add any income under section 43‑1021 and do not elect any subtractions under section 43‑1022, except for the exemptions allowed under section 43‑1023.
C. The department may provide a simplified return form for individual taxpayers who:
1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43‑1012.
2. Are residents for the full taxable year.
3. File as single individuals or married couples filing joint returns under section 43‑309.
4. Are not sixty‑five years of age or older or blind at the end of the taxable year.
5. Claim no exemptions under section 43-1023 for the taxable year.
6. Elect to claim the optional standard deduction under section 43‑1041.
7. Are not required to add any income under section 43‑1021 and do not elect to claim any subtractions under section 43‑1022 or file for any credits under chapter 10, article 5 of this title, except the credits provided by sections 43‑1072.01 and 43‑1073.
8. Do not elect to contribute a portion of any tax refund as provided by any provision of chapter 6, article 1 of this title. Notwithstanding any provision of chapter 6, article 1 of this title, a simplified return form under this subsection shall not include any space for the taxpayer to so contribute a portion of a refund.
D. The department shall prepare blank forms for the returns and shall distribute them throughout the state and furnish them upon application on request. Failure to receive or secure the form does not relieve any taxpayer from making any return required.
E. An individual income tax preparer who prepares more than ten original income tax returns that are timely filed during any taxable year that begins from and after December 31, 2017 shall file electronically all individual tax returns prepared by that tax preparer, for that taxable year and each subsequent taxable year. An individual income tax preparer may not charge a separate fee to the taxpayer for filing a return using the department's electronic filing program. This subsection does not apply if the taxpayer elects to have the return filed on paper or if the return cannot be filed electronically for reasons outside of the tax preparer's control.
F. Annual fiduciary returns, partnership returns and corporate returns shall be filed electronically for taxable years beginning from and after December 31, 2019, or when the department establishes an electronic filing program, whichever is later. Any person who is required to file electronically pursuant to this subsection may apply to the director, on a form prescribed by the department, for an annual waiver from the electronic filing requirement. The director may grant the waiver, which may be renewed for one subsequent year, if any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by the director.
G. A waiver is not required if the return cannot be electronically filed for reasons beyond the taxpayer's control, including situations in which the taxpayer was instructed by either the internal revenue service or the department of revenue to file by paper.
APPROVED BY THE GOVERNOR MARCH 24, 2017.
FILED IN THE OFFICE OF THE SECRETARY OF STATE MARCH 24, 2017.
