REFERENCE TITLE: Arizona internal revenue service

State of Arizona Senate Fifty-second Legislature First Regular Session 2015

SB 1246

Introduced by Senator Dial

 

AN ACT

 

Repealing section 41-3016.25, Arizona Revised Statutes; amending title 41, chapter 27, article 2, Arizona Revised Statutes, by adding section 41‑3030.01; amending sections 42-1001, 42-1002 and 43-104, Arizona Revised Statutes; relating to taxation.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 

Be it enacted by the Legislature of the State of Arizona:

Section 1.  Repeal

Section 41-3016.25, Arizona Revised Statutes, is repealed.

Sec. 2.  Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3030.01, to read:

START_STATUTE41-3030.01.  Arizona internal revenue service; termination July 1, 2030

A.  The Arizona internal revenue service terminates July 1, 2030.

B.  Title 42, chapter 1, article 1 is repealed on January 1, 2031. END_STATUTE

Sec. 3.  Section 42-1001, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1001.  Definitions

In this title, unless the context otherwise requires:

1.  "Board" or "state board" means either the state board of tax appeals or the state board of equalization, as applicable.

2.  "Court" means the tax court or superior court, whichever is applicable.

3.  "Department" means:

(a)  Through December 31, 2019, the department of revenue.

(b)  Beginning from and after December 31, 2019, the Arizona internal revenue service.

4.  "Director" means the director of the department.

5.  "Internal revenue code" means the United States internal revenue code of 1986, as amended and in effect as of January 1, 2014, including those provisions that became effective during 2013 with the specific adoption of their retroactive effective dates but excluding all changes to the code enacted after January 1, 2014. END_STATUTE

Sec. 4.  Section 42-1002, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1002.  Arizona internal revenue service; director; appointments; compensation

A.  There The Arizona internal revenue service is established a department of revenue.

B.  The direction, operation and control of the department Arizona internal revenue service are the responsibility of the director.

C.  The director shall be appointed by the governor pursuant to section 38‑211 and shall serve at the pleasure of the governor.

D.  Compensation for the director and the personnel required by the department Arizona internal revenue service shall be established pursuant to section 38‑611 and title 41, chapter 4, article 4.END_STATUTE

Sec. 5.  Section 43-104, Arizona Revised Statutes, is amended to read:

START_STATUTE43-104.  Definitions

In this title, unless the context otherwise requires:

1.  "Assessment" includes "proposed additional assessment".

2.  "Board" means the state board of tax appeals or, when applicable, a division of the state board.

3.  "Corporation" means a corporation, joint stock company, bank, insurance company, business trust or so-called "Massachusetts trust", investment company or building and loan association and any other association whether incorporated or unincorporated.

4.  "Department" means the department of revenue Arizona internal revenue service, the director or his the director's authorized delegate, as the context requires.

5.  "Director" means the director of the department of revenue Arizona internal revenue service.

6.  "Fiduciary" means a guardian, trustee, personal representative, executor, administrator, receiver or conservator, whether individual or corporate, or any person acting in any fiduciary capacity for any person, estate or trust.

7.  "Fiscal year" means an accounting period of twelve months ending on the last day of any month other than December.

8.  "Foreign country" means any jurisdiction other than one embraced within the United States.

9.  "Income derived from or attributable to sources within this state" includes income from tangible or intangible property located or having a situs in this state and income from any activities carried on in this state, regardless of whether carried on in intrastate, interstate or foreign commerce.

10.  "Income tax act of 1954" means title 43, Arizona Revised Statutes, as enacted by Laws 1954, chapter 65, as amended.

11.  "Income year" means "taxable year".

12.  "Individual" means a natural person.

13.  "Military or naval forces of the United States" includes the army, the navy, the air force, the marine corps, the coast guard, the army nurse corps, female, the women's army auxiliary corps, the navy nurse corps, female, and the women's reserve branch of the naval reserve, and all auxiliary branches of service.

14.  "Nonresident" means every individual other than a resident.

15.  "Paid or incurred" and "paid or accrued" shall be construed according to the method of accounting upon the basis of which the taxable income is computed under this title.

16.  "Partner" means a member of a partnership.

17.  "Partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization, through or by means of which any business, financial operation or venture is carried on and which is not, within the meaning of this title, a trust, estate or corporation.

18.  "Person" includes individuals, fiduciaries, partnerships and corporations.

19.  "Resident" includes:

(a)  Every individual who is in this state for other than a temporary or transitory purpose.

(b)  Every individual who is domiciled in this state and who is outside the state for a temporary or transitory purpose.  Any individual who is a resident of this state continues to be a resident even though temporarily absent from the state.

(c)  Every individual who spends in the aggregate more than nine months of the taxable year within this state shall be presumed to be a resident.  The presumption may be overcome by competent evidence that the individual is in the state for a temporary or transitory purpose.

20.  "State" includes the states of the United States, the District of Columbia and the possessions of the United States.

21.  "Tax" means the taxes imposed under this title.

22.  "Taxable year" means:

(a)  The calendar year or the fiscal year, ending during such calendar year, upon the basis of which the taxable income is computed under this title.  If no fiscal year has been established, "taxable year" means the calendar year.

(b)  In the case of a return made for a fractional part of a year under this title or under rules prescribed by the department, the period for which the return is made.

23.  "Taxpayer" means any person subject to a tax imposed by this title, but in no case shall it include the United States, this state, counties, cities, towns, school districts or other political subdivisions or units of this state or the federal government.

24.  "Trade or business" includes the performance of the functions of a public office.

25.  "United States", when used in a geographical sense, includes the states, the District of Columbia, and the possessions of the United States. END_STATUTE

Sec. 6.  Succession

A.  From and after December 31, 2019, the Arizona internal revenue service succeeds to the authority, powers, duties and responsibilities of the department of revenue.

B.  This act does not alter the effect of any actions or impair the valid obligations of the department of revenue taken before January 1, 2020.

C.  Administrative rules and orders that were adopted by the department of revenue continue in effect until superseded by administrative action by the Arizona internal revenue service.  Until administrative action is taken by the Arizona internal revenue service, any reference to the department of revenue in the department's rules and orders is considered to refer to the Arizona internal revenue service.

D.  All administrative matters, contracts and judicial and quasi‑judicial actions, whether completed, pending or in process, of the department of revenue on January 1, 2020 are transferred to and retain the same status with the Arizona internal revenue service.

E.  All certificates, licenses, registrations, permits and other indicia of qualification and authority that were issued by the department of revenue retain their validity for the duration of their terms of validity as provided by law.

F.  All tangible and intangible property and assets, all data and investigative findings and all appropriated monies that remain unexpended and unencumbered on January 1, 2020 of the department of revenue are transferred to the Arizona internal revenue service.

G.  All personnel under the state personnel system who are employed by the department of revenue are transferred to comparable positions and pay classifications in the Arizona internal revenue service on January 1, 2020.

Sec. 7.  Effect on preexisting tax liabilities and benefits

A.  This act does not affect the validity of tax liabilities incurred or tax benefits granted under prior law.

B.  Any approval issued under prior law by the department of revenue before the expiration of any tax deduction, credit, carryforward or other reduction qualifies the taxpayer, who is otherwise eligible, for the intended tax benefits.  No provision of this act may be interpreted to terminate tax benefits that were not claimed by qualified taxpayers before the effective date of this act.

Sec. 8.  Preliminary administrative action

A.  Notwithstanding section 11 of this act, before January 1, 2020 the governor and the director of the department of revenue may take administrative action to facilitate the termination of the department of revenue and the succession of the Arizona internal revenue service, including conducting an interim process for receiving and evaluating candidates for appointment as director of the Arizona internal revenue service as of January 1, 2020.

B.  The officers and personnel of the department of revenue shall cooperate and facilitate in the transition and succession process occurring pursuant to this act.

Sec. 9.  Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the purpose of the Arizona internal revenue service is to efficiently and fairly administer and collect taxes levied by this state, to provide taxpayer service and assistance without intimidation or adversity, to value and assess property subject to state property tax valuation and to determine and set assessing standards and practices for use by local assessing officials and personnel.

Sec. 10.  Conforming changes; definition

A.  The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration by the legislature.

B.  Unless such legislation is enacted, from and after December 31, 2019, any reference in the Arizona Revised Statutes to the department of revenue is considered to refer to the Arizona internal revenue service.

Sec. 11.  Effective date

A.  Sections 2, 4, 5 and 9 of this act are effective from and after December 31, 2019.

B.  The remainder of this act is effective as provided by law.