 |
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
luxury privilege tax; credit
Purpose
Establishes the Credit for Craft Distillers, Farm Wineries and Microbreweries (Credit), allowed against luxury privilege tax liability, at a rate of $2.00 per gallon produced for a licensed craft distiller, $0.50 per gallon produced for a licensed farm winery and $0.10 per gallon produced for a licensed microbrewery.
Background
Craft distilleries, farm wineries and microbreweries are subject to a luxury privilege tax on the sale of liquor in Arizona. Statute requires a luxury privilege tax to be levied and collected on spiritous, vinous and malt liquors at a rate of: 1) $3.00 per gallon on each sealed container of spirituous liquor; 2) $0.84 per gallon on each container of vinous liquor of which the alcoholic content is less than 24 percent; and 3) $0.16 per gallon on malt liquor or cider (A.R.S. §§ 42-3051; 42-3052; and 42-3355).
Statute prescribes annual production thresholds for liquor licensees, including: 1) for a licensed craft distiller, 20,000 gallons or more of distilled spirits; 2) for a licensed farm winery, between 200 gallons and 40,000 gallons of wine; and 3) for a licensed microbrewery, between 5,000 gallons and 6,200,000 gallons of beer (A.R.S. §§ 4-205.04; 4-205.08; and 4-205.10).
If the Credit against luxury privilege tax liability for outlined licensees results in a decrease of luxury privilege tax collections, there may be a fiscal impact to the state General Fund.
Provisions
1. Establishes the Credit, allowed against luxury privilege tax liability for a taxpayer that paid the tax liability, at a rate of:
a) for a licensed craft distiller, $2.00 per gallon or a proportionate rate for any lesser or greater quantity than one gallon for the first 20,000 gallons produced;
b) for a licensed farm winery, $0.50 per gallon or a proportionate rate for any lesser or greater quantity than one gallon for the first 20,000 gallons produced; and
c) for a licensed microbrewery, $0.10 per gallon or a proportionate rate for any lesser or greater quantity than one gallon for the first 500,000 gallons produced.
2. Requires a taxpayer to claim the Credit for each tax period by filing the prescribed forms with the Arizona Department of Revenue (ADOR).
3. Precludes a taxpayer from claiming the Credit if the taxpayer fails to pay the luxury privilege tax and the estimated tax liability before the payment becomes delinquent.
4. Requires ADOR to recapture any credits claimed by a taxpayer but disallowed.
5. Applies the establishment of the Credit to taxable periods beginning on or after the first day of the month following the general effective date.
6. Becomes effective on the general effective date.
Prepared by Senate Research
February 7, 2022
MG/AN/slp