ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

Senate: FIN DP 7-0-3-0| 3rd Read 29-0-1-0

House: WM DP 10-0-0-0

SB 1559: Native American veterans; tax settlement

Sponsor:  Senator Peshlakai, LD 7

Caucus & COW

Overview

Extends the time period for claims be submitted to the Veterans' Income Tax Settlement Fund (VITS Fund) to be accepted through December 31, 2022 and delays the repeal of the VITS Fund to June 30, 2024.

History

Laws 2016, Chapter 125 established the VITS Fund for Native American veterans to recover state income taxes that were withheld from active duty military pay.  The legislation appropriated $2 million from the state General Fund (GF) to the VITS Fund in FY 2017.  A veteran or the veteran's surviving spouse, personal representative, executor or other official of the estate may file a claim for a settlement payment if the veteran: 1) was an enrolled member of a Native American tribe; 2) maintained a domicile within the reservation boundaries of the veteran or veteran’s spouse; and 3) had taxes withheld from active duty military pay between September 1, 1993, and January 1, 2006. Laws 2017, Chapter 215 changed the date for withholdings to be eligible for refund from payments that were withheld after July 1, 1977.

A VITS Fund claimant must provide evidence of eligibility, subject to the Arizona Department of Veterans Services (ADVS) approval, including: 1) proof of service; 2) a signed statement attesting to the veteran’s tribal status during the period of service; and 3) evidence of the veteran’s domicile on a reservation at the time of service. The claimant must provide, subject to the Arizona Department of Revenue (DOR) approval, evidence of the amount of state income taxes withheld from the veteran’s active duty military pay and a signed statement specifying that the veteran has not received a refund for the years for which the claimant is seeking a settlement payment.

The VITS Fund is administered by DOR and monies left in the fund revert to the state GF on June 30, 2021.  ADVS may not accept claims submitted after December 31, 2019. 

Provisions

1.   ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteExtends the date that the unencumbered remaining monies in the VITS Fund revert to the state GF from June 30, 2021 to June 30, 2024.  (Sec. 1)

2.   Extends the deadline for the ADVS to accept VITS Fund claims from December 31, 2019 to December 31, 2022.  (Sec. 2)

3.   Extends the VITS Fund annual reporting requirement, completed by DOR, from October 1, 2021 to October 1, 2024.  (Sec. 3)

4.   Delays the repeal of the VITS program from January 1, 2022 to January 1, 2024.  (Sec. 4)

5.   Contains a retroactivity clause to January 1, 2020.  (Sec. 5)

6.   Makes technical changes.

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10.                    SB 1559

11.  Initials VP  Page 0 Caucus & COW

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