ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

Senate: FIN DP 6-1-0-0 | 3rd Read 17-11-2-0-0

House: WM DP 5-4-0-0

SB 1464: tax laws; interpretation; application; hearing

Sponsor: Senator Mesnard, LD 13

Caucus & COW

Overview

Requires the Department of Revenue (DOR) to notify the chairpersons of the Senate Finance committee, House Ways and Means committee or their successor committees if a new interpretation or application of any provision of Title 42 or 43 will adversely affect taxpayers prospectively and requires DOR to testify regarding the necessity of the new interpretation or application if the committees hold a hearing.

History

DOR cannot retroactively apply any newly enacted law retroactively or in a way which would penalize a taxpayer in compliance with previous law unless it is authorized by law. If DOR adopts a new interpretation or application of any provision of Title 42 or 43 or determines that any of those provisions applies to a new or additional category or type of taxpayer, and the change in interpretation or application is not because of a change in law: 1) the change would apply prospectively unless it is favorable to taxpayers; 2) DOR will not assess any tax, penalty or interest retroactively due to the change in interpretation or application; and 3) the change in an affirmative defense in any administrative or judicial action for retroactive assessment of tax, interest and penalties to taxable periods before the adoption of the new interpretation or application.

DOR shall not refund tax liabilities, penalties and interest paid before a new interpretation or application of Title 42, Chapter 5 unless the taxpayer provides satisfactory evidence that the amount refunded will be returned to the person who paid an added charge to cover the tax. Policies and procedures adopted by administrative rule, tax ruling, tax procedure or instructions to a tax return are included as new interpretation or application (A.R.S. § 42-2078).

Provisions

1. Requires DOR, and allows affected taxpayers, to notify the chairpersons of the Senate Finance committee, House Ways and Means committee or their successor committees if a newly proposed interpretation or application of any provision of Title 42 or 43 will adversely affect taxpayers prospectively, before the adoption of a new interpretation or application. (Sec. 1)

2. Requires DOR to testify regarding the reasons why the new interpretation or application is necessary if the chairpersons of the Senate Finance committee, House Ways and Means committee or their successor committees hold a hearing on the new interpretation's or application's impact on taxpayers. (Sec. 1)

3. Makes conforming changes. (Sec. 1)

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7. SB 1464

8. Initials VP/DD Page 0 Caucus & COW

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