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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
luxury tax; record inspection; penalty
Purpose
Subjects a person who knowingly fails or refuses to allow the Arizona Department of Revenue (ADOR) to examine luxury privilege tax records to a civil penalty of up to $500.
Background
Arizona imposes a luxury privilege tax on the privilege of selling cigarettes, tobacco and liquor to customers for consumption. The luxury tax on liquor is levied on wholesalers of spirituous, vinous, and malt liquors and every farm winery, microbrewery, craft distiller, or winery holding a direct shipment license to sell vinous or malt liquors. The luxury tax on cigarettes and tobacco is imposed on cigarettes, cigars, cavendish, and chewing tobacco, but not on electronic cigarettes and vapor products (A.R.S. § 42-3052; JLBC)
Wholesalers, distributors, and retailers of items subject to the Arizona luxury privilege tax must maintain sales and purchase records that are accessible for inspection by ADOR during normal business hours. An inspection that begins outside of normal business hours necessitates a judicial warrant or prior written consent. Wholesalers, distributors, and retailers utilizing electronic records must grant ADOR access to the records at their business location during normal business hours, regardless of the data's storage location. Any individual who knowingly fails or refuses to allow lawful examination of books, papers, accounts, records, or other memoranda by ADOR or its authorized agents or employees is in violation of the law and subject to a class two misdemeanor and, if applicable, additional civil and criminal penalties outlined in statute (A.R.S. §§ 42-3151 and 42-3154).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Subjects a person who knowingly fails or refuses to allow ADOR to examine luxury privilege tax records, in addition to a class two misdemeanor, to a civil penalty of up to $500, rather than any applicable statutorily prescribed civil or criminal penalty.
2. Makes technical changes.
3. Becomes effective on the general effective date.
Prepared by Senate Research
February 7, 2024
MG/JC/cs