 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
DOR; e-commerce compliance office
Purpose
Establishes the Arizona E-Commerce Compliance Office (Office) within the Arizona Department of Revenue (ADOR) and outlines the duties and responsibilities of the Office.
Background
On June 21, 2018, the U.S. Supreme Court overruled in South Dakota v. Wayfair, Inc. previous decisions made by the same court in 1967 (National Bellas Hess, Inc. v. Illinois Department of Revenue) and 1992 (Quill Corp. v. North Dakota), which both had held that only businesses with a physical presence inside a state can be required to collect that state's sales tax. If a business did not have nexus in the state, and therefore did not collect the tax, then the buyer was required to pay use tax instead. As of January 1, 2020, 43 states and the District of Columbia require a remote sales tax collection (National Conference of State Legislatures).
Laws 2019, Chapter 273 established economic nexus thresholds under which a remote seller must collect and remit tax on retail sales in Arizona. If the remote seller does not conduct sales through a marketplace facilitator, economic nexus applies if sales in Arizona exceed $150,000 in 2020 and $100,000 in 2021. If the remote seller is a marketplace facilitator, economic nexus applies if sales in Arizona from the marketplace facilitator's own business or on behalf of at least one remote seller exceed $100,000 in the calendar year.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Establishes the Office within ADOR and requires the Director of ADOR to select the employees of the Office.
2. Directs the Office to assist Arizona taxpayers that may be subject to sales tax, gross receipts tax, transaction privilege tax (TPT) or other excise taxes levied through economic nexus laws by jurisdictions outside of Arizona by:
a) identifying and updating other state requirements for registering, filing or paying taxes;
b) identifying and updating points of contact for tax officials in jurisdictions outside Arizona that are responsible for assisting sellers with registering, filing and paying taxes;
c) communicating with tax officials in jurisdictions outside Arizona when issues arise that affect the ability of a taxpayer to register, file, pay or otherwise comply with the tax laws in that jurisdiction;
d) referring to the Attorney General for investigation of any tax related practice, requirement or other regulation imposed on Arizona taxpayers by jurisdictions outside of Arizona that may violate the dormant commerce clause, current court precedent or other principles intended to protect and promote fair interstate competition; and
e) participating in meetings of organizations of states, the Federation of Tax Administrators and the Multistate Tax Commission to identify and recommend best practices in administering economic nexus laws.
3. Requires the Office to assist remote sellers and marketplace facilitators that may be subject to TPT by:
a) providing instructions on how to electronically obtain a license, file returns and remit taxes to ADOR;
b) answering telephone calls and written inquiries from businesses, individuals and taxpayer representatives regarding implementing and applying economic nexus laws;
c) reviewing and processing requests for liability relief available to remote sellers and marketplace facilitators;
d) assisting software vendors and taxpayers with electronic filings;
e) identifying and performing outreach to possible unlicensed remote sellers and marketplace facilitators;
f) providing internal training and support; and
g) performing other functions that relate to remote seller and marketplace facilitator assistance and compliance as prescribed by the Director of ADOR.
4. Requires ADOR to make the Office and its general advice, guidance and resources as publicly accessible as practicable and to prominently display contact information on ADOR's official website.
5. Defines terms.
6. Becomes effective on the general effective date.
Prepared by Senate Research
February 17, 2020
MG/AJS/gs