Assigned to FIN                                                                                                                 AS PASSED BY COW

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

AMENDED

FACT SHEET FOR H.B. 2360

TPT; estimated payments; liability threshold

Purpose

            Increases the tax liability threshold, above which a taxpayer is required to pay an estimated tax payment in June.

Background

            Current statute requires transaction privilege and affiliated excise taxes to be paid monthly in a required form to the Arizona Department of Revenue (ADOR) by the 20th day of the month following the month in which the tax accrues. If the business entity under which a taxpayer reports and pays income tax has an annual total tax liability of $1,000,000 or more, based on the actual tax liability in the preceding calendar year, the taxpayer shall report on a form prescribed by ADOR and pay an estimated tax payment by June 20. The estimated tax paid is credited against the taxpayer's tax liability. The estimated tax payment shall equal either: 1) one-half of the actual tax liability plus one-half of any telecommunication service excise tax and county excise tax liability for May of the current calendar year; or 2) the actual tax liability plus any telecommunication service excise tax and county excise tax liability for the first 15 days of June of the current calendar year (A.R.S. § 42-5014).

            There will be a shift in revenue to the state General Fund between fiscal years as the tax liability threshold increases. ADOR projects $10,322,623 will shift from FY 2020 to FY 2021, $10,005,032 from FY 2021 to FY 2022, $9,974,302 from FY 2022 to FY 2023 and $10,074,837 from FY 2023 to FY 2024.

Provisions

1. Increases the annual total tax liability, above which a taxpayer is required to report on a form prescribed by ADOR and pay an estimated tax payment in June, from $1,000,000 or more in 2019 to:

a) $1,600,000 or more in 2020;

b) $2,300,000 or more in 2021;

c) $3,100,000 or more in 2022; and

d) $4,100,000 or more in 2023 and each year thereafter.

2. Makes technical changes.

3. Becomes effective on the general effective date.

Amendments Adopted by Committee of the Whole

· Limits the tax liability threshold to increases through 2023.

House Action Senate Action

WM                 2/13/19      DPA     9-0-0-1              FIN                 3/6/19        DP       8-0-2

3^rd Read          2/25/19                    60-0-0               3^rd Read          5/22/19                  30-0-0

Prepared by Senate Research

May 22, 2019

CS/kja