ARIZONA STATE SENATE

RESEARCH STAFF

GARRETT COLLIER

LEGISLATIVE  INTERN

SEAN LAUX

LEGISLATIVE RESEARCH ANALYST

FINANCE COMMITTEE

Telephone: (602) 926 -3171

Facsimile: (602) 926 -3833

TO:                  SENATOR DEAN MARTIN                       

DATE:                        April 11, 2006

SUBJECT:      House Changes to S.B. 1151 – tax credits; withholding tax reductions

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            As passed by the Senate, S.B. 1151 allows an employee to elect a reduced withholding by the amount of the tax credit for contributions to a school tuition organization and to a public school in support of extracurricular fees or character education programs.

            The House of Representatives amended the bill as follows:

1. Requires an employee’s request to reduce withholding to be in writing.

2. Requires the employee’s request to include the name and address of a designated qualified charitable organization, school tuition organization or public school.

3. Provides the employer with 30 days to reduce the withholding amount by the amount of the credit.

4. Requires the employer to pay the entire amount of the withholding reduction to the employee’s designated charitable organization, public school or school tuition organization within 15 days after the close of each pay period.

5. Holds the employee responsible and accountable for the accuracy of all contributions to the designated charitable organization.  The employer is responsible and accountable for actually making the required payments.

6. Classifies an employer’s fraudulent appropriation or concealment with the intention to commit fraud related to a reduced withholding amount as a class 4 felony.

7. Requires the employer to furnish to each electing employee and the Department of Revenue with a statement of the amount withheld and paid on the employee’s behalf during the year within 30 days after each calendar year or 15 days after the termination of an employee.

8. Includes information provided by the employee to the employer pertaining to the reduced withholding request as confidential taxpayer information.

Senate Action House Action

FIN                 1/9/06     DPA     9-0-0                       WM                 3/13/06     DPA     6-0-0-3

3^rd Read           2/6/06                  24-3-3                      3^rd Read           4/11/06                  36-20-4-0

SL/GC/jas

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