Assigned to FIN AS
PASSED BY CONFERENCE COMMITTEE
Assigned to FIN AS
PASSED BY CONFERENCE COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
Purpose
Authorizes the Arizona Department of Revenue (DOR) to use a payment system for the immediate remittance of transaction privilege tax (TPT) and explore use of technology for TPT payments.
Background
TPT is a gross receipts tax levied by the State of Arizona for the privilege of conducting business in the state. Unlike a "true" sales tax imposed by many other states, TPT is imposed upon the seller of the item being taxed, rather than the purchaser. While the burden of the tax may be passed on to the purchaser, the seller is the party that is ultimately liable for payment of the tax to the state. DOR is the statewide collection agency for TPT.
Under current law, taxpayers may remit TPT to DOR in the form of bank draft, check, cashier's check, money order, case or electronic funds transfer (A.R.S. § 42-5018). Most TPT taxpayers are required to remit the tax on a monthly basis, due on or before the 20th day of the month following the month in which the tax accrues (A.R.S. § 42-5014).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
2. Permits DOR to design, develop and provide for trial demonstrations of the adaptation, application and use of technology to enable immediate remittance and collection of TPT payments, at the option of the taxpayer, at the point of sale and post-audit payments. DOR may contract with one or more private vendors or consultants and identify practical and legal issues.
3. Requires DOR to report its findings on or before January 1, 2021, in a report to the Governor, President of the Senate, Speaker of the House of Representatives, the Chairpersons of the Senate Finance and House Ways and Means Committees, and the Secretary of State. The report would be posted on the DOR website.
4. Repeals the demonstration project provisions on July 1, 2021.
Amendments Adopted by Committee
1. Specifies acceptable cryptocurrencies as bitcoin, litecoin and any others that DOR recognizes.
2. Removes the requirement that DOR convert cryptocurrency payment within 24 hours.
3. Allows DOR to credit the converted dollar amount, less any fees or costs incurred for conversion.
4. Adds a delayed effective date of January 1, 2020.
Amendments Adopted by the House of Representatives
1. Adds permission for DOR to use an immediate remittance payment system for TPT.
2. Revises income tax payment provisions to authorize the study of cryptocurrency income tax payment, rather than requiring DOR to accept payment in cryptocurrency.
3. Authorizes DOR to study the use of technology for TPT and income tax remittance and collection purposes.
Amendments Adopted by Conference Committee
1. Removes authorization for the study of income tax payment using cryptocurrencies, including bitcoin and litecoin.
2. Limits scope of DOR study to TPT only, rather than both TPT and income tax.
3. Makes the demonstration project at the option of the taxpayer.
Senate Action House Action
FIN 1/24/18 DPA 4-3-0 WM 3/07/18 DPA 6-0-1-2
3rd Read 2/08/18 16-13-1 3rd Read 4/30/18 43-14-3
Prepared by Senate Research
May 2, 2018
FB/AF/lb