SB1473 - 561R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 9-467, Arizona Revised Statutes, is amended to read:

START_STATUTE9-467. Building permits; issuance; distribution of copies; state preemption; utilities; subsequent owner; limitation; definitions

A. Any municipality requiring the issuance of a building permit shall transmit one a copy of the permit to the county assessor and one copy to the director of the department of revenue. the Permit copies copy shall provide the permit number, issue date and parcel number. On the issuance of the certificate of occupancy or the certificate of completion or on the expiration or cancellation of the permit, the assessor and the department of revenue shall be notified in writing or in electronic format of the permit number, parcel number, issue date and completion date.

B. The regulation of a utility provider's authority to operate and serve customers is a matter of statewide concern. The regulation of building permits as it relates to a building permit applicant's ability to use a utility provider that is capable and authorized to provide utility service is allowed solely in accordance with subsections C and D of this section. A building permit applicant's ability to use a utility provider that is capable and authorized to provide utility service is not subject to further regulation by a municipality.

C. A municipality requiring the issuance of a building permit may not deny a permit application based on the utility provider proposed to provide utility service to the project.

D. A municipality issuing a building permit shall ensure that all applicable permits and associated fees assessed on a building permit applicant contain requirements and amounts that do not exceed the requirements and amounts for use of other utility providers and do not have the effect of restricting a the permit applicant's ability to use the services of a utility provider that is capable and authorized to provide utility service.

E. A municipality may not require an applicant for a building permit to hold a transaction privilege tax license or business license as a condition for issuing the building permit. A city or town municipality may require a person that has been issued a building permit and that does not otherwise hold a business license from the municipality to apply for a business license within thirty days after issuing the building permit.

F. If a person has constructed a building or an addition to a building without obtaining a building permit, a municipality shall not require a subsequent owner to obtain a permit for the construction or addition done by the prior owner before issuing a permit for a building addition except that this section does not prohibit a municipality from enforcing an applicable ordinance or code provision that affects the public health or safety.

G. This section does not prohibit a municipality from recovering reasonable costs associated with reviewing and issuing a building permit.

H. This section does not affect any authority of a municipality to manage or operate a municipally owned utility.

I. For the purposes of this section:

1. "Municipality" means a city or town organized in accordance with law, including a home rule or charter city.

2. "Utility service" means water, wastewater, natural gas, including propane gas, or electric service provided to an end user. END_STATUTE

Sec. 2. Section 11-321, Arizona Revised Statutes, is amended to read:

START_STATUTE11-321. Building permits; issuance; state preemption; utilities; distribution of copies; subsequent owner; limitation; definition

A. Except in those cities and towns that have an ordinance relating to the issuance of issuing building permits, the board of supervisors shall require a building permit for any construction of a building or an addition to a building exceeding a cost of $1,000 within its jurisdiction. The building permit shall be filed with the board of supervisors or its designated agent.

C. A county may not deny a permit application based on the utility provider proposed to provide utility service to the project.

D. A county issuing a building permit shall ensure that all applicable permits and associated fees assessed on a building permit applicant contain requirements and amounts that do not exceed the requirements and amounts for use of other utility providers and do not have the effect of restricting a the permit applicant's ability to use the services of a utility provider that is capable and authorized to provide utility service.

E. The board of supervisors may not require an applicant for a building permit to hold a transaction privilege tax license or business license as a condition for issuing the building permit.

F. Where deemed of public convenience, the board of supervisors shall allow the application for and the issuance of building permits by mail.

G. One A copy of the building permit required by the terms of subsection A of this section shall be transmitted to the county assessor and one copy shall be transmitted to the director of the department of revenue. The permit copy provided to the assessor and the department of revenue shall have the permit number, the issue date and the parcel number for which the permit is issued. On the issuance of the certificate of occupancy or the certificate of completion or on the expiration or cancellation of the permit, the assessor and the department of revenue shall be notified in writing or in electronic format of the permit number, parcel number, issue date and completion date.

H. If a person has constructed a building or an addition to a building without obtaining a building permit, a county shall not require a subsequent owner to obtain a permit for the construction or addition done by the prior owner before issuing a permit for a building addition except that this section does not prohibit a county from enforcing an applicable ordinance or code provision that affects the public health or safety.

I. This section does not prohibit a county from recovering reasonable costs associated with reviewing and issuing a building permit.

J. This section does not affect any authority of a county to manage or operate a county-owned utility.

K. For the purposes of this section, "utility service" means water, wastewater, natural gas, including propane gas, or electric service provided to an end user. END_STATUTE

Sec. 3. Section 42-1108, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1108. Audit; deficiency assessments; nonaudit adjustments; electronic filing; definition

A. If a taxpayer fails to file a return required by this title or title 43, or if the department is not satisfied with the return or payment of the amount of tax required to be paid under either title, the department may examine audit any return, including any books, papers, records or memoranda relating to the return, to determine the correct amount of tax. This examination audit must occur within the time periods prescribed by section 42-1104 and may be accomplished through a detailed review of transactions or records or by a statistically valid sampling method.

B. The department shall give the taxpayer notice of its determination of a deficiency by mail or as prescribed by subsection C of this section, and the deficiency, plus penalties and interest, is final forty-five days after the date of receipt of the notice to the taxpayer unless an appeal is taken to the department. For individual income tax, the period is ninety days after the date of mailing. In the case of a joint income tax return, the notice may be a single joint notice mailed to the last known address, but if either spouse notifies the department that separate residences have been established, the department shall mail duplicate originals of the joint notice to each spouse.

C. The department may issue notice of its determination of a deficiency under subsection B of this section by using an electronic portal in lieu of mail, if all of the requirements of this subsection are met, after December 31, 2018 or when the department establishes the electronic portal, whichever is later. The use of the electronic portal in lieu of mail is subject to the following requirements and conditions:

1. The taxpayer agrees in writing to allow the department to use the electronic portal to issue notice of the department's determination of deficiency for specified tax periods. The agreement shall include an email address that the department may use to notify the taxpayer as required by paragraph 2 of this subsection. A taxpayer that provides an email address is certifying that the taxpayer regularly monitors that email address. If the taxpayer's email address changes, the taxpayer shall notify the department of a new email address.

2. The department shall notify the taxpayer, using the taxpayer's e-mail email address, on the same day the notice of its determination of a deficiency is posted to the electronic portal.

3. The date of receipt for a notice provided by electronic portal is the later of the date the notice is posted to the electronic portal or the date the notification is received by the taxpayer. A notification sent by e-mail email is considered to be received by the taxpayer on the day it is sent by the department.

D. If a deficiency is determined and the assessment becomes final, the department shall mail notice and demand to the taxpayer for the payment of the deficiency. Notwithstanding section 42-1125, subsection E, the deficiency assessed is due and payable at the expiration of ten days after the date of the notice and demand.

E. A certificate by the department of the mailing or e-mailing emailing of the notices specified in this section is prima facie evidence of the assessment of the deficiency and the giving of the notices.

F. Any amount of tax in excess of that disclosed by the return due to a nonaudit adjustment, as listed in subsection G or H of this section, notice of which has been mailed to the taxpayer, is not a deficiency assessment within the meaning of this section. The taxpayer may not protest or appeal as in the case of a deficiency assessment, based on such a notice, and the assessment or collection of the amount of tax erroneously omitted in the return is not prohibited by this article.

G. An adjustment due to any of the following is considered a nonaudit adjustment:

1. An addition, subtraction, multiplication, division or other mathematical error shown on any return.

2. The failure of the taxpayer to properly compute the tax liability based on the taxable income reported on the return.

3. An incorrect usage or selection of information for a filed return from tax tables, schedules or similar documents provided by the department if the incorrect usage is apparent from the existence of other information on the return.

4. An entry on a return that is inconsistent with an entry on a schedule, form, statement, list or other document filed with the return.

5. An omission of information required on the return to substantiate an entry.

6. An entry on a return of a deduction or credit in an amount that exceeds a statutory limit if the limit is a monetary figure, a percentage, a ratio or a fraction and the items entered into the application of this limit appear on the return, including claiming a deduction or credit that is not authorized by statute for the taxable period.

7. Missing or incorrect taxpayer identification numbers for the purposes of claiming exemptions or credits.

8. An entry of a credit or deduction that requires a preapproval if the credit or deduction has not been preapproved or if the entry is for more than the preapproved amount.

9. An entry of a credit or deduction amount carried forward from a prior year that is outside of the statutory period allowed for the carryforward or is for an amount that is inconsistent with the taxpayer's prior year returns.

H. If a taxpayer that files its return electronically is allowed to input the information from a document into the electronic filing program instead of providing the actual document with the return, the department may request a copy of the document from the taxpayer at any time. If the taxpayer provides the document, the department may adjust the return to reflect the amounts on the document. If the taxpayer does not provide the requested document within the period provided by the department, the department may deny any deduction, credit or withholding that the document is intended to substantiate. An adjustment made pursuant to this subsection is considered a nonaudit adjustment under subsection G, paragraph 4 of this section, even though the actual document is not included with the electronically filed return if the department requests the document within sixty days after the due date of the return or the date on which the return was filed, whichever is later.

I. For the purposes of this section, "audit" means a review or EXAMINATION of a taxpayer's accounts, financial information, books and records and any other document to ensure information is reported correctly on a return in accordance with this chapter and to verify the reported amount of tax is correct.END_STATUTE

Sec. 4. Section 42-1118, Arizona Revised Statutes, is amended to read:

START_STATUTE42-1118. Refunds, credits, offsets and abatements

A. If the department determines that any amount of tax, penalty or interest has been paid in excess of the amount actually due, the department shall credit the excess amount against any tax administered pursuant to this article, including any penalty, interest or other amounts owed by the taxpayer to the department. If it is determined that the amount cannot be credited against a tax or installment of taxes due from the taxpayer, the department may:

1. Refund the entire amount of tax, interest and penalty, in a lump sum or in not more than five annual installments, to the taxpayer from whom it was collected.

2. Issue to the taxpayer a credit voucher for the entire amount of tax, interest and penalty collected, to be carried forward and applied against future tax liabilities until exhausted.

3. Refund part, and issue a credit voucher for the balance, of the tax, interest and penalties as provided in paragraphs 1 and 2 of this subsection.

B. If the total amount withheld from income under section 43-401 exceeds the amount of the tax on the employee's entire taxable income as computed under title 43, the department shall refund the amount of the excess deducted without requiring a filing of a refund claim as provided in this section. The failure of the department to make the refund does not limit the right of the taxpayer to file a claim for a refund pursuant to this section if the claim is not barred under section 42-1106. The department shall not refund amounts less than one dollar unless specifically requested by the taxpayer at the time the return or claim for refund is filed.

C. Any overpayment that may result from withholdings or estimates pursuant to section 43-401, 43-581, or 43-582 or 43-583 shall not be credited or refunded unless an Arizona income tax return has been filed for the tax year for which the withholdings or estimates were made.

D. The department shall give a vendor who has a duty to collect use tax pursuant to chapter 5, article 4 of this title and who has not collected that tax full credit or offset for any use tax, interest and penalty paid to the department by the purchaser when issuing a determination of a deficiency pursuant to section 42-1108. This credit or offset shall be computed from the date of the use tax payment by the purchaser. If the purchaser has been audited by the department for use tax for the period of the purchase, the purchaser is considered to have paid the use tax to the department. For other purchases, the vendor may submit an affirmation by a purchaser on a form prescribed by the department that use tax was paid on the purchase. A fully completed certificate, taken in good faith by the vendor, constitutes proof that the vendor is entitled to this credit or offset. The department may require a purchaser who has submitted the certificate to establish the accuracy and completeness of the information contained in the certificate. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable for a penalty equal to the amount of tax and interest that would have been paid by the seller and for the additional penalties pursuant to section 42-1125. Payment of the penalty relieves the purchaser of any responsibility for paying the use tax. The department may require this proof and may assess the purchaser within the later of the period of limitations set forth in section 42-1104 or one year from the date the notice of proposed deficiency is issued to the vendor if the purchaser does not establish the accuracy of the information contained in the certificate.

E. Each claim for refund shall be filed with the department in writing and shall identify the claimant by name, address and tax identification number. Each claim shall provide the amount of refund requested, the specific tax period involved and the specific grounds on which the claim is founded. Refunds are subject to setoff for debts pursuant to section 42-1122. An EXAMINATION of a taxpayer's books and records or other documents other than to confirm or deny the refund constitutes an audit as defined in section 42-1108 and is subject to the provisions of section 42-1108.

F. A motor vehicle manufacturer that repurchases a vehicle pursuant to section 44-1263 or for reasons of consumer satisfaction may apply for a refund of the taxes paid under chapter 5 of this title if that manufacturer has refunded the amount of tax to the consumer. A refund is allowed under this subsection only if the manufacturer provides satisfactory proof to the department that tax amounts attributed to the sale of the vehicle were collected from the consumer and that the manufacturer refunded an amount of tax to the consumer. Any refund provided under this subsection is in lieu of any refund on the vehicle that the dealer may otherwise be entitled to receive. A manufacturer must apply for a refund under this subsection within four years after repurchasing the vehicle. For the purposes of this subsection:

1. "Consumer" has the same meaning prescribed in section 44-1261.

2. "Motor vehicle manufacturer" means a corporation engaged in the business of producing passenger cars, trucks and multipurpose passenger vehicles as described in 49 Code of Federal Regulations section 571.3.

3. "Satisfactory proof" includes copies of checks and a purchase or lease agreement that lists the vehicle identification number and that itemizes the amount that was collected as tax from the consumer.

G. The department shall not imprint the full social security number or other taxpayer identifier used pursuant to section 42-1105 on any taxpayer refund check, voucher or other credit documentation issued to the taxpayer under this section.

H. If any amount has been erroneously determined to be due from any person but not yet collected, the department shall cancel the amount or amounts on its records.

I. If, with or after the filing of a protest or an appeal with the department, the state board of tax appeals or the court, a taxpayer pays the tax protested or appealed before the department, board or court acts upon the protest or the appeal, such body shall treat the protest or the appeal as a claim for refund or an appeal from the denial of a claim for refund filed under this section. END_STATUTE

Sec. 5. Section 42-2003, Arizona Revised Statutes, is amended to read:

START_STATUTE42-2003. Authorized disclosure of confidential information

A. Confidential information relating to:

1. A taxpayer may be disclosed to the taxpayer, its successor in interest or a designee of the taxpayer who is authorized in writing by the taxpayer. A principal corporate officer of a parent corporation may execute a written authorization for a controlled subsidiary. If a taxpayer elects to file an Arizona small business income tax return under section 43-302, a written authorization by a the taxpayer to allow the department to disclose personal income tax information to a designee includes the corresponding Arizona small business income tax return.

2. A corporate taxpayer may be disclosed to any principal officer, any person designated by a principal officer or any person designated in a resolution by the corporate board of directors or other similar governing body. If a corporate officer signs a statement under penalty of perjury representing that the officer is a principal officer, the department may rely on the statement until the statement is shown to be false. For the purposes of this paragraph, "principal officer" includes a chief executive officer, president, secretary, treasurer, vice president of tax, chief financial officer, chief operating officer or chief tax officer or any other corporate officer who has the authority to bind the taxpayer on matters related to state taxes.

3. A partnership may be disclosed to any partner of the partnership. This exception does not include disclosure of confidential information of a particular partner unless otherwise authorized.

4. A limited liability company may be disclosed to any member of the company or, if the company is manager-managed, to any manager.

5. An estate may be disclosed to the personal representative of the estate and to any heir, next of kin or beneficiary under the will of the decedent if the department finds that the heir, next of kin or beneficiary has a material interest that will be affected by the confidential information.

6. A trust may be disclosed to the trustee or trustees, jointly or separately, and to the grantor or any beneficiary of the trust if the department finds that the grantor or beneficiary has a material interest that will be affected by the confidential information.

7. A government entity may be disclosed to the head of the entity or a member of the governing board of the entity, or any employee of the entity who has been delegated the authorization in writing by the head of the entity or the governing board of the entity.

8. Any taxpayer may be disclosed if the taxpayer has waived any rights to confidentiality either in writing or on the record in any administrative or judicial proceeding.

9. The name and taxpayer identification numbers of persons issued direct payment permits may be publicly disclosed.

10. Any taxpayer may be disclosed during a meeting or telephone call if the taxpayer is present during the meeting or telephone call and authorizes the disclosure of confidential information.

B. Confidential information may be disclosed to:

1. Any employee of the department whose official duties involve tax administration.

2. The office of the attorney general solely for its use in preparation for, or in an investigation that may result in, any proceeding involving tax administration before the department or any other agency or board of this state, or before any grand jury or any state or federal court.

3. The department of liquor licenses and control for its use in determining whether a spirituous liquor licensee has paid all transaction privilege taxes and affiliated excise taxes incurred as a result of the sale of spirituous liquor, as defined in section 4-101, at the licensed establishment and imposed on the licensed establishments by this state and its political subdivisions.

4. Other state tax officials whose official duties require the disclosure for proper tax administration purposes if the information is sought in connection with an investigation or any other proceeding conducted by the official. Any disclosure is limited to information of a taxpayer who is being investigated or who is a party to a proceeding conducted by the official.

5. The following agencies, officials and organizations, if they grant substantially similar privileges to the department for the type of information being sought, pursuant to statute and a written agreement between the department and the foreign country, agency, state, Indian tribe or organization:

(a) The United States internal revenue service, alcohol and tobacco tax and trade bureau of the United States treasury, United States bureau of alcohol, tobacco, firearms and explosives of the United States department of justice, United States drug enforcement agency and federal bureau of investigation.

(b) A state tax official of another state.

(c) An organization of states, federation of tax administrators or multistate tax commission that operates an information exchange for tax administration purposes.

(d) An agency, official or organization of a foreign country with responsibilities that are comparable to those listed in subdivision (a), (b) or (c) of this paragraph.

(e) An agency, official or organization of an Indian tribal government with responsibilities comparable to the responsibilities of the agencies, officials or organizations identified in subdivision (a), (b) or (c) of this paragraph.

6. The auditor general, in connection with any audit of the department subject to the restrictions in section 42-2002, subsection D.

7. Any person to the extent necessary for effective tax administration in connection with:

(a) The processing, storage, transmission, destruction and reproduction of the information.

(b) The programming, maintenance, repair, testing and procurement of equipment for purposes of tax administration.

8. The office of administrative hearings relating to taxes administered by the department pursuant to section 42-1101, but the department shall not disclose any confidential information without the taxpayer's written consent:

(a) Regarding income tax or withholding tax.

(b) On any tax issue relating to information associated with the reporting of income tax or withholding tax.

9. The United States treasury inspector general for tax administration for the purpose of reporting a violation of internal revenue code section 7213A (26 United States Code section 7213A), unauthorized inspection of returns or return information.

10. The financial management service of the United States treasury department for use in the treasury offset program.

11. The United States treasury department or its authorized agent for use in the state income tax levy program and in the electronic federal tax payment system.

12. The Arizona commerce authority for its use in:

(a) Qualifying renewable energy operations for the tax incentives under section 42-12006.

(b) Qualifying businesses with a qualified facility for income tax credits under sections 43-1083.03 and 43-1164.04.

(c) Fulfilling its annual reporting responsibility pursuant to section 41-1512, subsections U and V and section 41-1517, subsection L.

(d) Certifying computer data centers for tax relief under section 41-1519.

(e) Certifying applicants for the tax credit for motion picture production costs under sections 43-1082 and 43-1165.

13. A prosecutor for purposes of section 32-1164, subsection C.

14. The office of the state fire marshal for use in determining compliance with and enforcing title 37, chapter 9, article 5.

15. The department of transportation for its use in administering taxes, surcharges and penalties prescribed by title 28.

16. The Arizona health care cost containment system administration for its use in administering nursing facility provider assessments.

17. The department of administration risk management division and the office of the attorney general if the information relates to a claim against this state pursuant to section 12-821.01 involving the department of revenue.

18. Another state agency if the taxpayer authorizes the disclosure of confidential information in writing, including an authorization that is part of an application form or other document submitted to the agency.

19. The department of economic security for its use in determining whether an employer has paid all amounts due under the unemployment insurance program pursuant to title 23, chapter 4.

20. The department of health services for its use in determining the following:

(a) Whether a medical marijuana dispensary is in compliance with the tax requirements of chapter 5 of this title for the purposes of section 36-2806, subsection A.

(b) Whether a marijuana establishment, marijuana testing facility or dual licensee licensed under title 36, chapter 28.2 is in compliance with the tax obligations under this title or title 43.

21. The Arizona department of agriculture for the purpose of ascertaining compliance with the licensing provisions in title 3.

22. The office of economic opportunity for the purpose of performing the duties and obligations to or on behalf of this state prescribed by title 41, chapter 53.

C. Confidential information may be disclosed in any state or federal judicial or administrative proceeding pertaining to tax administration pursuant to the following conditions:

1. One or more of the following circumstances must apply:

(a) The taxpayer is a party to the proceeding.

(b) The proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of the taxpayer's civil liability, with respect to any tax imposed under this title or title 43.

(c) The treatment of an item reflected on the taxpayer's return is directly related to the resolution of an issue in the proceeding.

(d) Return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer and directly affects the resolution of an issue in the proceeding.

2. Confidential information may not be disclosed under this subsection if the disclosure is prohibited by section 42-2002, subsection C or D.

D. Identity information may be disclosed for purposes of notifying persons entitled to tax refunds if the department is unable to locate the persons after reasonable effort.

E. The department, on the request of any person, shall provide the names and addresses of bingo licensees as defined in section 5-401, verify whether or not a person has a privilege license and number, a tobacco product distributor's license and number or a withholding license and number or disclose the information to be posted on the department's website or otherwise publicly accessible pursuant to section 42-1124, subsection F and section 42-3401.

F. A department employee, in connection with the official duties relating to any audit, collection activity or civil or criminal investigation, may disclose return information to the extent that disclosure is necessary to obtain information that is not otherwise reasonably available. These official duties include the correct determination of and liability for tax, the amount to be collected or the enforcement of other state tax revenue laws.

G. Confidential information relating to transaction privilege tax, use tax, severance tax, jet fuel excise and use tax and any other tax collected by the department on behalf of any jurisdiction may be disclosed to any county, city or town tax official if the information relates to a taxpayer who is or may be taxable by a county, city or town or who may be subject to audit by the department pursuant to section 42-6002. Any taxpayer information that is released by the department to the county, city or town:

1. May be used only for internal purposes, including audits. If there is a legitimate business need relating to enforcing laws, regulations and ordinances pursuant to section 9-500.39 or 11-269.17, a county, city or town tax official may redisclose transaction privilege tax information relating to a vacation rental or short-term rental property owner or online lodging operator from the new license report and license update report, subject to the following:

(a) The information redisclosed is limited to the following:

(i) The transaction privilege tax license number.

(ii) The type of organization or ownership of the business.

(iii) The legal business name and doing business as name, if different from the legal name.

(iv) The business mailing address, tax record physical location address, telephone number, email address and fax number.

(v) The date the business started in this state, the business description and the North American industry classification system code.

(vi) The name, address and telephone number for each owner, partner, corporate officer, member, managing member or official of the employing unit.

(b) Redisclosure is limited to nonelected officials in other units within the county, city or town. The information may not be redisclosed to an elected official or the elected official's staff.

(c) All redisclosures of confidential information made pursuant to this paragraph are subject to paragraph 2 of this subsection.

2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The county, city or town shall agree in writing with the department that any release of confidential information that violates the confidentiality standards adopted by the department will result in the immediate suspension of any rights of the county, city or town to receive taxpayer information under this subsection.

H. The department may disclose statistical information gathered from confidential information if it does not disclose confidential information attributable to any one taxpayer. The department may disclose statistical information gathered from confidential information, even if it discloses confidential information attributable to a taxpayer, to:

1. The state treasurer in order to comply with the requirements of section 42-5029, subsection A, paragraph 3.

2. The joint legislative income tax credit review committee, the joint legislative budget committee staff and the legislative staff in order to comply with the requirements of section 43-221.

I. The department may disclose the aggregate amounts of any tax credit, tax deduction or tax exemption enacted after January 1, 1994. Information subject to disclosure under this subsection shall not be disclosed if a taxpayer demonstrates to the department that such information would give an unfair advantage to competitors.

J. Except as provided in section 42-2002, subsection C, confidential information, described in section 42-2001, paragraph 1, subdivision (a), item (ii), may be disclosed to law enforcement agencies for law enforcement purposes.

K. The department may provide transaction privilege tax license information to property tax officials in a county for the purpose of identification and verification of the tax status of commercial property.

L. The department may provide transaction privilege tax, luxury tax, use tax, property tax and severance tax information to the ombudsman-citizens aide pursuant to title 41, chapter 8, article 5.

M. Except as provided in section 42-2002, subsection D, a court may order the department to disclose confidential information pertaining to a party to an action. An order shall be made only on a showing of good cause and that the party seeking the information has made demand on the taxpayer for the information.

N. This section does not prohibit the disclosure by the department of any information or documents submitted to the department by a bingo licensee. Before disclosing the information, the department shall obtain the name and address of the person requesting the information.

O. If the department is required or allowed to disclose confidential information, it may charge the person or agency requesting the information for the reasonable cost of its services.

P. Except as provided in section 42-2002, subsection D, the department of revenue shall release confidential information as requested by the department of economic security pursuant to section 42-1122 or 46-291. Information disclosed under this subsection is limited to the same type of information that the United States internal revenue service is authorized to disclose under section 6103(l)(6) of the internal revenue code.

Q. Except as provided in section 42-2002, subsection D, the department shall release confidential information as requested by the courts and clerks of the court pursuant to section 42-1122.

R. To comply with the requirements of section 42-5031, the department may disclose to the state treasurer, to the county stadium district board of directors and to any city or town tax official that is part of the county stadium district confidential information attributable to a taxpayer's business activity conducted in the county stadium district.

S. The department shall release to the attorney general confidential information as requested by the attorney general for purposes of determining compliance with or enforcing any of the following:

1. Any public health control law relating to tobacco sales as provided under title 36, chapter 6, article 14.

2. Any law relating to reduced cigarette ignition propensity standards as provided under title 37, chapter 9, article 5.

3. Sections 44-7101 and 44-7111, the master settlement agreement referred to in those sections and all agreements regarding disputes under the master settlement agreement.

T. For proceedings before the department, the office of administrative hearings, the state board of tax appeals or any state or federal court involving penalties that were assessed against a return preparer, an electronic return preparer or a payroll service company pursuant to section 42-1103.02, 42-1125.01 or 43-419, confidential information may be disclosed only before the judge or administrative law judge adjudicating the proceeding, the parties to the proceeding and the parties' representatives in the proceeding prior to its introduction into evidence in the proceeding. The confidential information may be introduced as evidence in the proceeding only if the taxpayer's name, the names of any dependents listed on the return, all social security numbers, the taxpayer's address, the taxpayer's signature and any attachments containing any of the foregoing information are redacted and if either:

1. The treatment of an item reflected on such a return is or may be related to the resolution of an issue in the proceeding.

2. Such a return or the return information relates or may relate to a transactional relationship between a person who is a party to the proceeding and the taxpayer that directly affects the resolution of an issue in the proceeding.

3. The method of payment of the taxpayer's withholding tax liability or the method of filing the taxpayer's withholding tax return is an issue for the period.

U. The department and attorney general may share the information specified in subsection S of this section with any of the following:

1. Federal, state or local agencies located in this state for the purposes of enforcement of the statutes or agreements specified in subsection S of this section or for the purposes of enforcement of corresponding laws of other states.

2. Indian tribes located in this state for the purposes of enforcement of the statutes or agreements specified in subsection S of this section.

3. A court, arbitrator, data clearinghouse or similar entity for the purpose of assessing compliance with or making calculations required by the master settlement agreement or agreements regarding disputes under the master settlement agreement, and with counsel for the parties or expert witnesses in any such proceeding, if the information otherwise remains confidential.

V. The department may provide the name and address of qualifying hospitals and qualifying health care organizations, as defined in section 42-5001, to a business that is classified and reporting transaction privilege tax under the utilities classification.

W. The department may disclose to an official of any city, town or county in a current agreement or considering a prospective agreement with the department as described in section 42-5032.02, subsection G any information relating to amounts that are subject to distribution and that are required by section 42-5032.02. Information disclosed by the department under this subsection:

1. May be used only by the city, town or county for internal purposes.

2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The city, town or county must agree with the department in writing that any release of confidential information that violates the confidentiality standards will result in the immediate suspension of any rights of the city, town or county to receive information under this subsection.

X. Notwithstanding any other provision of this section, the department may not disclose information provided by an online lodging marketplace, as defined in section 42-5076, without the written consent of the online lodging marketplace, and the information may be disclosed only pursuant to subsection A, paragraphs 1 through 6, 8 and 10, subsection B, paragraphs 1, 2, 7 and 8 and subsections C, D and G of this section. Such information:

1. Is not subject to disclosure pursuant to title 39, relating to public records.

2. May not be disclosed to any agency of this state or of any county, city, town or other political subdivision of this state. END_STATUTE

Sec. 6. Section 42-3401, Arizona Revised Statutes, is amended to read:

START_STATUTE42-3401. Tobacco distributor licenses; application; conditions; revocations and cancellations

A. Every person acquiring or possessing for the purpose of making the initial sale or distribution in this state of any tobacco products on which a tax is imposed by this chapter shall obtain from the department a license to sell tobacco products. The application for the license shall be in the form provided by the department and shall be accompanied by a fee of $25 for each place of business listed in the application. The form shall state that the identity of the applicant will be posted to the department's website for public inspection. The application for a license shall include the applicant's name and address, the applicant's principal place of business, all other places of business where the applicant's business is conducted for the purpose of making the initial sale or distribution of tobacco products in this state, including any location that maintains an inventory of tobacco products, and any other information required by the department. The applicant's principal place of business and other business locations may not include a residential location or post office box address, except as allowed under subsection D, paragraph 2, subdivision (c) of this section. If the applicant is a firm, partnership, limited liability company, limited liability partnership or association, the applicant shall list the name and address of each of the applicant's members. If the applicant is a corporation, the application shall list the name and address of the applicant's officers and any person who directly or indirectly owns an aggregate amount of ten percent or more of the ownership interest in the corporation. If a licensee is a corporation, firm, partnership, limited liability company, limited liability partnership or association, the licensee under this subsection shall notify the department in writing within thirty days after any change in membership, legal entity status or ownership of more than fifty percent of the total ownership interest in a single transaction. If a licensee changes its business location, the licensee under this subsection shall notify the department within thirty days after a change in location. If the licensee is making a change in its business location by adding or replacing one or more additional places of business that are not currently listed on its application, the licensee must remit a fee of $25 for each additional place of business.

B. For the purposes of subsection A of this section, an applicant with a controlling interest in more than one business engaged in activities as a distributor shall apply for a single license encompassing all such businesses and list each place of business in its application. For the purposes of this subsection, "controlling interest" means direct or indirect ownership of at least eighty percent of the voting shares of a corporation or of the interests in a company, business or person other than a corporation.

C. The department shall issue a license authorizing the applicant to acquire or possess tobacco products in this state on the condition that the applicant complies with this chapter and the rules of the department. The license:

1. Shall be nontransferable. A licensee may not transfer its license to a new owner when selling its business, and any court-appointed trustee, receiver or other person shall obtain a license in its own name in cases of liquidation, insolvency or bankruptcy or pursuant to a court order if the business remains in operation as a distributor of tobacco products. In cases of liquidation, insolvency or bankruptcy or pursuant to a court order, the department will not consider a business as remaining in operation under this paragraph if the court-appointed trustee, receiver or other person winds up the business within sixty days after the order is issued. A licensee shall apply for a new license if it changes its legal entity status or otherwise changes the legal structure of its business.

2. Shall be valid for one year unless earlier canceled or revoked by the department.

3. Shall be displayed in a conspicuous place at the licensee's place of business. If the licensee operates from more than one place of business, the licensee must display a copy of its license in a conspicuous place at each location.

D. As a condition of licensure under this section, an applicant agrees to the following conditions:

1. A person may not hold or store any tobacco products, whether within or outside of this state, for sale or distribution in this state by or on behalf of a distributor at any place other than a location that has been disclosed to the department pursuant to subsection A of this section. This paragraph does not include a person holding or storing tobacco products by or on behalf of the distributor when the tobacco products are in transit to a distributor or retailer as part of a lawful sale.

2. All tobacco products held or stored, whether within or outside of this state, for sale or distribution in this state by or on behalf of a distributor:

(a) Shall be accessible to the department during normal business hours without a judicial warrant or prior written consent of the distributor.

(b) May not be held or stored in a vehicle, except as allowed under section 42-3403, subsection B.

(c) May not be held or stored at a residential location, unless the sole luxury for sale or distribution by or on behalf of the distributor is taxed as a cigar under section 42-3052, paragraph 8 or 9 and the product weight of the cigars is not more than five hundred pounds. If the product is held or stored at a residential location, as a condition of licensure, the distributor shall provide written consent and allow access to the department to inspect the stock of luxuries and all books, papers, invoices, records and electronically stored data showing sales, receipts and purchases of luxuries. The distributor shall submit the written consent to the department with the license application or on demand of the department.

3. Tobacco products may be sold, transferred or distributed to a retailer located on an Indian reservation in this state only if the retailer is registered with, and has a registration identification number issued by, the department.

E. A person who is convicted of an offense described in section 42-1127, subsection E is permanently ineligible to hold a license issued under this section.

F. The department may not issue or renew a license to an applicant and may revoke a license issued under subsection C of this section if any of the following applies:

1. The applicant or licensee owes $1,000 or more in delinquent taxes imposed on tobacco products under this chapter that are not under protest or subject to a payment agreement.

2. The department has revoked any license held by the applicant or licensee within the previous two years.

3. The applicant or licensee has been convicted of a crime that relates to stolen or counterfeit cigarettes.

4. The applicant or licensee has imported cigarettes into the United States for sale or distribution in violation of 19 United States Code section 1681a.

5. The applicant or licensee has imported cigarettes into the United States for sale or distribution without fully complying with the federal cigarette labeling and advertising act (P.L. 89-92; 79 Stat. 282; 15 United States Code section 1331).

6. The applicant or licensee is in violation of section 13-3711 or section 36-798.06, subsection A.

7. Pursuant to section 44-7111, section 6(a), the applicant or licensee is in violation of section 44-7111, section 3(c).

8. The civil rights of the applicant or licensee have been suspended under section 13-904. An applicant or licensee whose civil rights have been suspended is ineligible to hold a license for a period of five years following the restoration of the applicant's or licensee's civil rights.

G. In addition to any other civil or criminal penalty and except as otherwise provided in this section, the department may deny the issuance or renewal of or revoke a license issued under subsection C of this section if the person violates any requirement under this title commits a violation more than two times within a three-year period or fails to otherwise maintain the conditions of licensure in this section. For the PURPOSES of this subsection, "violation" means any of the following:

1. Failure to submit a timely required return under SECTION 42-3501.

2. Failure to submit a timely payment with a return required under section 42-3501.

3. Failure to amend any error on a required return within THIRTY days after receiving written notice from the department.

H. The department shall publish on its website the names of each person who is issued a license under subsection C of this section, including any trade names or business names used by the licensee. The department shall update the published names at least once each month.

I. A person may not apply for or hold a distributor's license if that person does not engage in the activities described in subsection A of this section. In addition to any other applicable penalty, the department may cancel the license of any licensee that fails to incur any tax liability under this chapter for twelve consecutive months.

J. Any revocation, cancellation or denial of a license issued under this section by the department must comply with section 41-1092.11, subsection B.

K. Notwithstanding any other law, for the purposes of subsection F, paragraphs 1 and 2 of this section, section 42-1127, subsection C and section 42-3461, subsection B, if a distributor has listed in its application more than one place of business, any revocation, cancellation, denial or nonrenewal of the distributor's license shall apply only with effect to remove the place of business or business location at which the activity occurred from the distributor's license. If such a removal occurs, the distributor shall be subject to restrictions that the department prescribes by rule. END_STATUTE

Sec. 7. Section 42-5009, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5009. Certificates establishing deductions; liability for making false certificate; tax exclusion; definitions

A. A person who conducts any business classified under article 2 of this chapter may establish entitlement to the allowable deductions from the tax base of that business by both:

1. Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the tax base.

2. Obtaining a certificate executed by the purchaser indicating the name and address of the purchaser, the precise nature of the business of the purchaser, the purpose for which the purchase was made, the necessary facts to establish the appropriate deduction and the tax license number of the purchaser to the extent the deduction depends on the purchaser conducting business classified under article 2 of this chapter and a certification that the person executing the certificate is authorized to do so on behalf of the purchaser. The certificate may be disregarded if the seller has reason to believe that the information contained in the certificate is not accurate or complete.

B. A person who does not comply with subsection A of this section may establish entitlement to the deduction by presenting facts necessary to support the entitlement, but the burden of proof is on that person.

C. The department may prescribe a form for the certificate described in subsection A of this section. Under such rules as it may prescribe, the department may also describe transactions with respect to which a person is not entitled to rely solely on the information contained in the certificate provided for in subsection A of this section but must instead obtain such additional information as required by the rules in order to be entitled to the deduction.

D. If a seller is entitled to a deduction by complying with subsection A of this section, the department may require the purchaser that caused the execution of the certificate to establish the accuracy and completeness of the information required to be contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

E. If a seller is entitled to a deduction by complying with subsection B of this section, the department may require the purchaser to establish the accuracy and completeness of the information provided to the seller that entitled the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection B of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

F. The department may prescribe a form for a certificate used to establish entitlement to the deductions described in section 42-5061, subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3. Under rules the department may prescribe, the department may also require additional information for the seller to be entitled to the deduction. If a seller is entitled to the deductions described in section 42-5061, subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

G. If a seller claims a deduction under section 42-5061, subsection A, paragraph 25 and establishes entitlement to the deduction with an exemption letter that the purchaser received from the department and the exemption letter was based on a contingent event, the department may require the purchaser that received the exemption letter to establish the satisfaction of the contingent event within a reasonable time. If the purchaser cannot establish the satisfaction of the event, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not been furnished the exemption letter. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029. For the purposes of this subsection, "reasonable time" means a time limitation that the department determines and that does not exceed the time limitations pursuant to section 42-1104.

H. The department shall prescribe forms for certificates used to establish the satisfaction of the criteria necessary to qualify the sale of a motor vehicle for the deductions described in section 42-5061, subsection A, paragraph 14, paragraph 28, subdivision (a) and paragraph 44 and subsection U. Except as provided in subsection J of this section, to establish entitlement to these deductions, a motor vehicle dealer shall retain:

1. A valid certificate as prescribed by this subsection completed by the purchaser and obtained before the issuance of the nonresident registration permit authorized by section 28-2154.

2. for the purposes of the deductions provided by section 42-5061, subsection A, paragraph 14, subdivision (b) and section 42-5061, subsection U, a copy of the nonresident registration permit authorized by section 28-2154.

3. A legible copy of a current valid driver license issued to the purchaser by another state or foreign country that indicates an address outside of this state. For the sale of a motor vehicle to a nonresident entity, the entity's representative must have a current valid driver license issued by the same jurisdiction as that in which the entity is located.

4. For the purposes of the deduction provided by section 42-5061, subsection A, paragraph 14, subdivision (a), a certificate documenting the delivery of the motor vehicle to an out-of-state location.

I. Notwithstanding subsection A, paragraph 2 of this section, if a motor vehicle dealer has established entitlement to a deduction by complying with subsection H of this section, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that entitled the motor vehicle dealer to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the motor vehicle dealer would have been required to pay under this article and under articles IV and V of the model city tax code as defined in section 42-6051. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and any tax imposed under article VI of the model city tax code as defined in section 42-6051. The amount shall be treated as tax revenues collected from the motor vehicle dealer in order to designate the distribution base for purposes of section 42-5029.

J. To establish entitlement to the deduction described in section 42-5061, subsection A, paragraph 44, a public consignment auction dealer as defined in section 28-4301 shall submit retain a copy of the valid certificate prescribed by subsection H of this section to the department and retain a copy for its records.

K. Notwithstanding any other law, compliance with subsection H of this section by a motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in section 42-6004, subsection A, paragraph 4.

L. The department shall prescribe a form for a certificate to be used by a person that is not subject to tax under section 42-5075 when the person is engaged by a contractor that is subject to tax under section 42-5075 for a project that is taxable under section 42-5075. The certificate permits the person purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement to provide documentation to a retailer that the sale of tangible personal property qualifies for the deduction under section 42-5061, subsection A, paragraph 27, subdivision (b). A prime contractor shall obtain the certificate from the department and shall provide a copy to any such person working on the project. The prime contractor shall obtain a new certificate for each project to which this subsection applies. For the purposes of this subsection, the following apply:

1. The person that is not subject to tax under section 42-5075 may use the certificate issued pursuant to this subsection only with respect to tangible personal property that will be incorporated into a project for which the gross receipts are subject to tax under section 42-5075.

2. The department shall issue the certificate to the prime contractor on receiving sufficient documentation to establish that the prime contractor meets the requirements of this subsection.

3. If any person uses the certificate provided under this subsection to purchase tangible personal property to be used in a project that is not subject to tax under section 42-5075, the person is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this section exempts the person from liability for any tax imposed under article 4 of this chapter. The amount shall be sourced under section 42-5040, subsection A, paragraph 2.

M. Notwithstanding any other law, compliance with subsection L of this section by a person that is not subject to tax under section 42-5075 entitles the person to the exemption allowed by section 465, subsection (k) of the model city tax code when purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement.

N. The requirements of subsections A and B of this section do not apply to owners, proprietors or tenants of agricultural lands or farms who sell livestock or poultry feed that is grown or raised on their lands to any of the following:

1. Persons who feed their own livestock or poultry.

2. Persons who are engaged in the business of producing livestock or poultry commercially.

3. Persons who are engaged in the business of feeding livestock or poultry commercially or who board livestock noncommercially.

O. A vendor who has reason to believe that a certificate prescribed by this section is not accurate or complete will not be relieved of the burden of proving entitlement to the exemption. A vendor that accepts a certificate in good faith will be relieved of the burden of proof and the purchaser may be required to establish the accuracy of the claimed exemption. If the purchaser cannot establish the accuracy and completeness of the information provided in the certificate, the purchaser is liable for an amount equal to the transaction privilege tax, penalty and interest that the vendor would have been required to pay if the vendor had not accepted the certificate.

P. Notwithstanding any other law, an online lodging operator, as defined in section 42-5076, shall be entitled to an exclusion from any applicable taxes for any online lodging transaction, as defined in section 42-5076, facilitated by an online lodging marketplace, as defined in section 42-5076, for which the online lodging operator has obtained from the online lodging marketplace written notice that the online lodging marketplace is registered with the department to collect applicable taxes for all online lodging transactions facilitated by the online lodging marketplace, and transaction history documenting tax collected by the online lodging marketplace, pursuant to section 42-5005, subsection L.

Q. The department shall prescribe the form of a certificate to be used by a person purchasing an aircraft to document eligibility for a deduction pursuant to section 42-5061, subsection B, paragraph 8, subdivision (a), item (v) or an exemption pursuant to section 42-5159, subsection B, paragraph 8, subdivision (a), item (v), relating to aircraft. The person must provide this certificate and documentation confirming that the operational control of the aircraft has been transferred or will be transferred immediately after the purchase to one or more persons described in section 42-5061, subsection B, paragraph 8, subdivision (a), item (i), (ii), (iii) or (iv) or section 42-5159, subsection B, paragraph 8, subdivision (a), item (i), (ii), (iii) or (iv). Operational control of the aircraft must be transferred for at least fifty percent of the aircraft's flight hours. If such operational control is not transferred for at least fifty percent of the aircraft's flight hours during the recapture period, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus penalty and interest. The recapture period begins on the date that operational control of the aircraft is first transferred and ends on the later of the date the aircraft is fully depreciated for federal income tax purposes or five years after operational control was first transferred. For the purposes of this subsection, operational control of the aircraft must be within the meaning of federal aviation administration operations specification A008, or its successor, except that:

1. If it is determined that operational control has been transferred for less than fifty percent but more than forty percent of the aircraft's flight hours, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus interest.

2. If the aircraft is sold during the recapture period, the seller is not liable for the amount determined pursuant to this subsection unless the operational control of the aircraft had not been transferred for at least fifty percent of the aircraft's flight hours at the time of the sale.

R. Notwithstanding any other law, a shared vehicle owner is entitled to an exclusion from any applicable taxes for a shared vehicle transaction that is facilitated by a peer-to-peer car sharing program and for which the peer-to-peer car sharing program has collected and remitted applicable taxes.

S. For the purposes of this section, "peer-to-peer car sharing program", "shared vehicle owner" and "shared vehicle transaction" have the same meanings prescribed in section 28-9601. END_STATUTE

Sec. 8. Section 42-5122, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5122. Tax exemption; sales to Indian tribes, tribally owned businesses, tribal entities and affiliated Indians

The taxes imposed by this chapter do not apply to the gross proceeds of sales or gross income derived from any of the following:

1. Business activities performed by an the Indian tribe, a tribally owned business, a tribal entity or an affiliated Indian if the business activity takes place on an the Indian reservation.

2. Business activities performed by a nonaffiliated Indian or non-Indian vendor on an Indian reservation for an the Indian tribe, a tribal entity or an affiliated Indian.

3. Contracting activities performed on an Indian reservation by an the Indian tribe, a tribally owned business, a tribal entity or an affiliated Indian.

4. Contracting activities performed for an the Indian tribe, a tribally owned business, a tribal entity or an affiliated Indian on an the Indian reservation by a nonaffiliated Indian or non-Indian contractor.

5. Retail sales of tangible personal property to an the Indian tribe, a tribally owned business, a tribal entity or an affiliated Indian if the sale of tangible personal property takes place on an the Indian reservation. A sale is deemed to take place on an the Indian reservation if the tangible personal property is ordered from and delivered on an Indian reservation.

6. The sale of a motor vehicle to an enrolled member of an Indian tribe who resides on the Indian reservation established for that Indian tribe. END_STATUTE

Sec. 9. Repeal

Section 42-11057, Arizona Revised Statutes, is repealed.

Sec. 10. Section 42-13004, Arizona Revised Statutes, is amended to read:

START_STATUTE42-13004. Data processing equipment and systems

A. County assessors shall use data processing systems that are prescribed by the department, but a county assessor who has a data processing system that is compatible with the system prescribed by the department may continue to use that system if it is coordinated with the system prescribed by the department.

B. A county may contract with a private supplier or with another political subdivision for equipment or services that are necessary to meet the requirements of the department if the data processing system is compatible and coordinated with the system prescribed by the department.

C. If a county does not own, lease or contract for data processing equipment or services that are necessary to meet the department's requirements, the department may contract with the county to furnish the equipment or services to the county.

D. On application by the board of supervisors, the department shall authorize a county to prepare its own tax rolls and assessment abstracts if the data processing system used by the county in preparing the rolls and abstracts is compatible and coordinated with the system prescribed by the department.

E. The office of the county assessor is responsible for paying the cost of its data processing system and permanent records that are prescribed by the department.

F. Monies collected by the department pursuant to subsections C and E of this section shall be distributed as follows:

1. The first sixty cents per parcel collected pursuant to an intergovernmental agreement between the department and the county assessor for data processing services shall be deposited in the state general fund.

2. Any additional monies collected in excess of sixty cents per parcel shall be deposited in the client county equipment capitalization fund established in section 42-11057.

G. The unencumbered fiscal year-end fund balance shall not exceed three hundred thousand dollars. Any unencumbered fiscal year-end balance in excess of three hundred thousand dollars shall be transferred to the state general fund. END_STATUTE

Sec. 11. Section 42-15101, Arizona Revised Statutes, is amended to read:

START_STATUTE42-15101. Annual notice of full cash value; amended notice of valuation

A. Except as provided by section 42-13254, on any date before March 1 of each year the county assessor shall notify each owner of record, or purchaser under a deed of trust or an agreement of sale, of property that is valued by the assessor as to the property's full cash value and the limited property value, if applicable, to be used for assessment purposes.

B. The notice under this section shall be in writing and shall be mailed, delivered by common carrier, or on request of the taxpayer transmitted electronically to the person's last known mailing, delivery or electronic address. With respect to any property transferred by a beneficiary deed pursuant to section 33-405, until the county assessor is notified by the beneficiary in writing, accompanied by a certified copy of the last surviving owner's death certificate and the change of address, mailing of the notice to the last known address of the deceased owner is deemed a mailing to the beneficiary's last known mailing, delivery or electronic address as required by this section.

C. On the same date each year the assessor shall certify to the board of supervisors and the department the date on which all notices under this section were mailed.

D. The director may extend the final date for mailing notices beyond March 1 for a period of not more than thirty days for delays caused by an act of God, flood or fire or any other extenuating circumstance as deemed applicable by the director. If the director extends the mailing date, the extension applies to all property valued by the assessor.

E. Within sixty days after the mailing of the notice of valuation pursuant to this section, if the assessor discovers that property characteristic data applicable to a grouping of properties delineated by neighborhood or classification resulted in an incorrect opinion of value, the assessor may amend the notice of valuation and, if amended, shall notify the property owner of the amended value pursuant to subsection B of this section. The assessor shall transmit any proposed amendments made under this subsection to the department as provided by section 42-11056, subsections B and C, in a format prescribed by the department. The assessor shall not mail the amended notices of valuation until the proposed amendments are transmitted to the department and the department approves the amended values. The assessor shall certify the amended notices of valuation pursuant to subsection C of this section.

F. After the mailing date of the notice, any person who owns, claims, possesses or controls property that is valued by the assessor may inquire of and be advised by the assessor as to the valuation of the property determined by the assessor, but the assessor shall not change the roll except as provided by chapter 16, article 2 of this title or as otherwise provided by law. END_STATUTE

Sec. 12. Section 42-16209, Arizona Revised Statutes, is amended to read:

START_STATUTE42-16209. Service on defendants

A. A copy of the notice of appeal shall be served on the defendant or defendants and on the department within ten days after filing in the manner provided for service of process in the rules of civil procedure or by certified mail.

B. In an appeal taken by the county or the department, service shall be on the person in whose name the property is listed at the address shown on the current tax roll within ten days after filing.

C. An affidavit showing service shall be filed with the clerk of the court. END_STATUTE

Sec. 13. Section 43-1014, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1014. Entity-level tax election; partnerships; S corporations; rules

A. For taxable years beginning from and after December 31, 2021, the partners or shareholders of a business that is treated as a partnership or S corporation for federal income tax purposes may consent to be taxed at the entity level at a tax rate that is the same as the highest tax rate prescribed by section 43-1011 applicable to the entire portion of its taxable income that is attributable to its resident partners or shareholders and the portion of its taxable income derived from sources within this state that is attributable to its nonresident partners or shareholders for that taxable year. The election under this subsection must be made on or before the due date or extended due date of the business's return under this title.

B. If the election is made under subsection A of this section, all of the following apply:

1. The taxable income of the partnership or S corporation is as follows:

(a) For a partnership, the Arizona taxable income determined under chapter 14 of this title.

(b) For an S corporation, the total of all distributive income passed through to the shareholders under section 43-1126, subsection B.

2. If the partnership or S corporation does not pay the amount owed to the department as a result of the election under this section, the department may collect the amount from the partners or shareholders based on the proportionate share of income that is attributable to each partner or shareholder for Arizona tax purposes.

3. The partnership or S corporation shall pay estimated tax pursuant to section 43-581 as necessary.

C. The election under subsection A of this section does not apply to the following:

1. Partners or shareholders that are not individuals, estates or trusts. The portion of the taxable income attributable to a partner or shareholder that is not an individual, estate or trust is not included in the entity-level tax under subsection A of this section.

2. Partners or shareholders who are individuals, estates or trusts and who opt out of the election pursuant to subsection D of this section. The portion of the taxable income attributable to a partner or shareholder who is an individual, estate or trust and who opts out of the election pursuant to subsection D of this section is not included in the entity-level tax under subsection A of this section.

D. A partnership or S corporation that intends to make the election under subsection A of this section shall notify all partners or shareholders who are individuals, estates or trusts of the intent to make the election and that each partner or shareholder who is an individual, estate or trust has the right to opt out of the election. The notice shall allow each partner or shareholder who is an individual, estate or trust at least sixty days after receiving the notice to notify the partnership or S corporation that the partner or shareholder who is an individual, estate or trust is exercising the partner's or shareholder's right to opt out of the election. If the partner or shareholder who is an individual, estate or trust does not respond within the sixty-day period or waives the right to opt out, the partner or shareholder will be included in the election.

E. The department shall adopt rules and prescribe forms and procedures as necessary to administer this section. END_STATUTE

Sec. 14. Section 43-1088, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1088. Credit for contribution to qualifying charitable organizations; definitions

A. Except as provided in subsections B and C of this section, a credit is allowed against the taxes imposed by this title for voluntary cash contributions by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G during the taxable year to a qualifying charitable organization, other than a qualifying foster care charitable organization, not to exceed:

1. $400 in any taxable year for a single individual or a head of household.

2. $800 in any taxable year for a married couple filing a joint return.

B. A separate credit is allowed for voluntary cash contributions during the taxable year to a qualifying foster care charitable organization. A contribution to a qualifying foster care charitable organization does not qualify for, and shall not be included in, any credit amount under subsection A of this section. If the voluntary cash contribution by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G is to a qualifying foster care charitable organization, the credit shall not exceed:

1. $500 in any taxable year for a single individual or a head of household.

2. $1,000 in any taxable year for a married couple filing a joint return.

C. Subsections A and B of this section provide separate credits against taxes imposed by this title depending on the recipients of the contributions. A taxpayer, including a married couple filing a joint return, in the same taxable year, may either or both:

1. Contribute to a qualifying charitable organization, other than a qualifying foster care charitable organization, and claim a credit under subsection A of this section.

2. Contribute to a qualifying foster care charitable organization and claim a credit under subsection B of this section.

D. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.

E. For the purposes of this section, a contribution for which a credit is claimed and that is made on or before the fifteenth day of the fourth month following the close of the taxable year may be applied to either the current or preceding taxable year and is considered to have been made on the last day of that taxable year.

F. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry forward the amount of the claim not used to offset the taxes under this title for not more than five consecutive taxable years' income tax liability.

G. The credit allowed by this section is in lieu of a deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.

H. For taxable years beginning from and after December 31, 2022, the department shall adjust the dollar amounts prescribed in subsection A, paragraphs 1 and 2 of this section and subsection B, paragraphs 1 and 2 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall be raised to the nearest whole dollar. The dollar amounts may not be revised below the amounts prescribed in the prior taxable year.

I. Taxpayers taking a credit authorized by this section shall provide the name of the qualifying charitable organization and the amount of the contribution to the department of revenue on forms provided by the department.

J. A qualifying charitable organization shall provide the department of revenue with a written certification that it meets all criteria to be considered a qualifying charitable organization. The organization shall also notify the department of any changes that may affect the qualifications under this section.

K. The charitable organization's written certification must be signed by an officer of the organization under penalty of perjury. The written certification must include the following:

1. Verification of the organization's status under section 501(c)(3) of the internal revenue code or verification that the organization is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901.

2. Financial data indicating the organization's budget for the organization's prior operating year and the amount of that budget spent on services to residents of this state who either:

(a) Receive temporary assistance for needy families benefits.

(b) Are low-income residents.

3. A statement that the organization plans to continue spending at least fifty percent of its budget on services to residents of this state who receive temporary assistance for needy families benefits, who are low-income residents or who are individuals who have a chronic illness or physical disability.

4. A statement that the organization does not provide, pay for or provide coverage of abortions and does not financially support any other entity that provides, pays for or provides coverage of abortions.

L. The department shall review each written certification and determine whether the organization meets all the criteria to be considered a qualifying charitable organization and notify the organization of its determination. The department may also periodically request recertification from the organization. The department shall compile and make available to the public a list of the qualifying charitable organizations.

M. For the purposes of this section:

1. "Individuals who have a chronic illness or physical disability" means individuals whose primary diagnosis is a severe physical condition that may require ongoing medical or surgical intervention.

2. "Low-income residents" means persons whose household income is less than one hundred fifty percent of the federal poverty level.

3. "Qualified individual" means any of the following:

(a) A foster child as defined in section 8-501.

(b) A person who is participating in an independent living program as prescribed in section 8-521.

(d) A person who is participating in an extended foster care program as prescribed in section 8-521.02.

(e) A person who is under twenty-seven years of age and whose reason for leaving foster care is any of the following:

(i) Reaching eighteen years of age.

(ii) Adoption or legal guardianship after reaching fifteen years of age.

(iii) Reunification after reaching fourteen years of age.

4. "Qualifying charitable organization" means a charitable organization that is exempt from federal income taxation under section 501(c)(3) of the internal revenue code or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901. The organization must spend at least fifty percent of its budget on services to residents of this state who receive temporary assistance for needy families benefits, to low-income residents of this state and their households or to individuals who have a chronic illness or physical disability and who are residents of this state. Taxpayers choosing to make donations through an umbrella charitable organization that collects donations on behalf of member charities shall designate that the donation be directed to a member charitable organization that would qualify under this section on a stand-alone basis. Qualifying charitable organization does not include any entity that provides, pays for or provides coverage of abortions or that financially supports any other entity that provides, pays for or provides coverage of abortions.

5. "Qualifying foster care charitable organization" means a qualifying charitable organization that is exempt from federal income taxation under section 501(c)(3) of the internal revenue code or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901 and that each operating year provides services to at least two hundred qualified individuals in this state and spends at least fifty percent of its budget on services to qualified individuals in this state.

6. "Services" means:

(a) For a qualifying charitable organization, cash assistance, medical care, child care, food, clothing, shelter, job placement and job training services or any other assistance that is reasonably necessary to meet immediate basic needs and that is provided and used in this state.

(b) For a qualifying foster care charitable organization, cash assistance, medical care, behavioral health services, child care, food, including snacks at the qualifying foster care charitable organization's foster youth event events, clothing, shelter, job placement services, job training services, character education programs, workforce development programs, secondary education student retention programs, housing or financial literacy services or any other assistance that is reasonably necessary to meet basic needs or provide normalcy and that is provided and used in this state. For the purposes of this subdivision:

(i) "Behavioral health services" has the same meaning prescribed in section 36-401.

(ii) "Character education program" means any program described in section 15-719, subsection B that is offered by a qualifying foster care charitable organization.

(iii) "Job training services" has the same meaning as vocational and technical preparation as defined in section 15-781.

(iv) "Normalcy" means the condition of experiencing a typical childhood by participating in activities that are age or developmentally-appropriate, as defined in 42 United States Code section 675.

(v) "Workforce development program" means any program recognized by the workforce Arizona council pursuant to section 41-5401. END_STATUTE