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REFERENCE TITLE: TPT credit; restaurant remodeling expenses |
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State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018
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HB 2316 |
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Introduced by Representative John
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AN ACT
Amending title 42, chapter 5, article 1, Arizona Revised Statutes, by adding section 42-5016.01; relating to transaction privilege tax credits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 42, chapter 5, article 1, Arizona Revised Statutes, is amended by adding section 42-5016.01, to read:
42-5016.01. Credit for restaurant remodeling expenses; definition
A. For taxable periods beginning from and after December 31, 2018, a credit is allowed against a portion of the taxes imposed by this article for a taxpayer doing business under the restaurant classification as provided by section 42-5074 for a portion of expenses incurred in remodeling the taxpayer's business premises.
B. The credit amount:
1. Is thirty percent of the audited remodeling costs incurred by the taxpayer, determined pursuant to subsection C of this section.
2. Shall be applied against the incremental increased tax liability that is attributable solely to increased business revenue at the remodeled premises.
3. Shall be determined and applied for each taxable period as follows:
(a) Calculate the average state transaction privilege tax amount paid per taxable period by the taxpayer over the thirty-six months immediately preceding the month in which the remodeling activity began. The credit does not apply unless the same taxpayer has been in business for at least thirty-six months at the same business location.
(b) Subtract the amount determined under subdivision (a) of this paragraph from the full amount of state transaction privilege tax due, exclusive of the credit, for the current taxable period. The positive difference, if any, is the increased tax increment.
(c) Subtract the credit amount, determined under paragraph 1 of this subsection, from the increased tax increment for the current taxable period. If the credit amount exceeds the increased tax increment, the remaining credit amount shall be carried forward to each succeeding taxable period until all of the remaining credit amount is consumed.
C. To qualify for the credit under this section, a taxpayer must enter into a limited managed audit agreement pursuant to chapter 2, article 7 of this title that includes an audit of expenses attributable exclusively to the remodeling to confirm the amount of the audited remodeling costs with respect to the specific premises and the credit amount under this section. The audit must be conducted by the taxpayer's authorized representative, as defined in section 42-2301, who is an independent certified public accountant licensed in this state. The certified public accountant and the firm the certified public accountant is affiliated with may not regularly perform accounting or audit services for the taxpayer or the taxpayer's affiliates. If the director accepts the findings of the audit, the director shall issue a notice of determination pursuant to section 42-2303, including a written certificate to the taxpayer stating the accepted amount of the audited remodeling costs and the credit amount. If the taxpayer timely files its tax returns with the appropriate credit claim forms, the audited remodeling costs, the computed credit amount and the credit claimed and taken on each tax payment are not subject to recapture, disallowance, reduction or denial. This subsection does not prohibit the recapture of all or part of the credit amount from the taxpayer if the taxpayer failed to disclose material information during the audit, falsified its books or records or otherwise engaged in an action that prevented an accurate audit.
D. 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.
E. For the purposes of this section, "remodeling" means altering the structure of the restaurant in which the taxpayer conducts business, including any necessary and accompanying changes in decorations, furnishings and appliances.