State of Arizona
Second Regular Session
SENATE BILL 1021
amending section 42-1105, Arizona Revised Statutes; amending title 42, chapter 1, article 3, Arizona Revised Statutes, by adding section 42‑1131; amending section 43-321, Arizona Revised Statutes; relating to the department of revenue.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 42-1105, Arizona Revised Statutes, is amended to read:
42-1105. Taxpayer identification, verification and records; retention
A. The federal taxpayer identification number, assigned pursuant to section 6109 of the internal revenue code, is the taxpayer identifier for purposes of the taxes administered pursuant to this article. Each person who is required to make a return, statement or other document shall include the identifier in order to secure the person's proper identification. If the return, statement or other document is made, electronically or otherwise, by another person on behalf of the taxpayer, the taxpayer shall furnish the identifier to the other person, and the person shall furnish both the taxpayer's identifier and the person's own identifier with the return, statement or document.
B. The department may prescribe by administrative rule alternative methods for signing, subscribing or verifying a return, statement or other document required or authorized to be filed with the department that have the same validity and consequence as the actual signature or written declaration of the taxpayer or other person required to sign, subscribe or verify the return, statement or other document. While the department is adopting a rule prescribing alternative methods for signing, subscribing or verifying a return, statement or other document, the director, by tax ruling, may waive the requirement of a signature for a particular type or class of return, statement or other document required to be filed with the department. This subsection does not apply if the alternative method for signing a return, statement or other document is an electronic signature. The department shall accept or require electronic signatures in the manner prescribed in section 42-1131. For purposes of this subsection, "tax ruling" has the same meaning prescribed in section 42‑2052.
C. A person who is a return preparer or an electronic return preparer shall furnish a completed copy of the return, statement or other document to the taxpayer no later than the time the return, statement or other document is presented for the taxpayer's signature.
D. Except as provided in section 42‑3010, every person who is subject to the taxes administered pursuant to this article shall keep and preserve copies of filed tax returns, including any attachments to the tax return, any signature documents used for the tax return, suitable records and other books and accounts necessary to determine the tax for which the person is liable for the period prescribed in section 42‑1104. The books, records and accounts shall be open for inspection at any reasonable time by the department or its authorized agent.
E. Except as provided in section 42‑3010, a return preparer or electronic return preparer shall keep copies of the return, statement or other document for six years for transaction privilege and use tax returns and four years for all other returns, statements and other documents following the date on which the return, statement or other document was due to be filed or was presented to the taxpayer for signature, whichever is later.
F. Except as provided in section 42‑3010, the department may require by administrative rule electronic return preparers to keep for each prepared return, statement or other document the following documents for six years for transaction privilege and use tax returns and four years for all other returns, statements and other documents following the later of either the date on which the return, statement or other document was due to be filed with the department or was presented to the taxpayer for signature:
1. The signature document or tax return form bearing the taxpayer's original signature in a manner prescribed by the department by administrative rule or tax ruling.
2. Any attachments to the return, statement or other document required to be submitted to the department if the return, statement or other document had not been electronically transmitted to the department.
G. The operator of a swap meet, flea market, fair, carnival, festival, circus or other transient selling event shall maintain a current list of vendors conducting business on the premises as sellers. The list shall include each vendor name, business name and business address. On written notice, the department may require an operator to submit a copy of the list at any time to the department.
H. For at least the period of time prescribed by section 42‑1104, the department shall retain any return, statement or other document, as defined in section 42-1101.01, as a record pursuant to sections 41‑151.14, 41‑151.15, 41‑151.16, 41‑151.17 and 41‑151.19. Anything submitted with the return, statement or other document as defined in section 42-1101.01 that is not required, authorized or requested by the department is not part of the record and may be destroyed, unless it is, at the department's reasonable discretion, of more than de minimis value. Copies of original documents of which the department reasonably expects the taxpayer has retained any originals are presumed to be of de minimis value for purposes of this section. If the department determines that any document that is not required, authorized or requested by the department pursuant to this subsection is of more than de minimis value, within ten days after receipt the department shall notify the taxpayer in writing or by electronic means of its intent to destroy the document. If the taxpayer requests the return of any document included in the notice, the department shall immediately comply, although the director may require the taxpayer to pay any shipping costs to return the document. If the taxpayer does not request the return of the documents within thirty days after the date on the notice or the taxpayer consents to the destruction of the documents, whichever occurs first, the department may destroy the documents included in the notice.
Sec. 2. Title 42, chapter 1, article 3, Arizona Revised Statutes, is amended by adding section 42-1131, to read:
42-1131. Electronic signatures; definition
A. The department shall accept or require an electronic signature to serve as a functional equivalent of a written signature on a document that is submitted to the department. The electronic signature has the same force and effect as a written signature.
B. An electronic signature must meet all of the following requirements:
1. Be executed or adopted by a person with the intent to sign the document so as to indicate the person's approval of the information contained in the document.
2. Be attached to or logically associated with the information contained in the document being signed.
3. Be capable of reliable identification and authentication of the person as the signer. Identification and authentication may be accomplished through additional security procedures or processes if reliably correlated to the electronic signature.
4. Be linked to the document in a manner that would invalidate the electronic signature if the document is changed.
5. Be linked to the document so as to preserve its integrity as an accurate and complete record for the full retention period of the document.
6. Be compatible with standards and technology for electronic signatures that are generally used in commerce and industry and by state governments.
C. For documents that are signed electronically, the department shall prescribe the following:
1. The type of electronic signature required.
2. The manner and format in which the electronic signature must be affixed to the electronic record.
D. For the purposes of this section, "electronic signature" has the same meaning prescribed in section 44‑7002.
E. Notwithstanding any other provision of this section, the department's use and acceptance of electronic signatures are subject to the standards and requirements of title 44, chapter 26, article 3.
Sec. 3. Section 43-321, Arizona Revised Statutes, is amended to read:
43-321. Information required in returns
Each return required to be filed under this title shall contain the following:
1. It shall contain or be verified by a declaration that it is made under penalties of perjury. The declaration shall be written or in a form prescribed by the department pursuant to section 42‑1105, subsection B or section 42-1131.
2. A specific statement of the items of the taxpayer's gross income and the adjustments, deductions and credits allowed by this title.
Sec. 4. Exemption from rulemaking
For the purposes of this act, the department of revenue is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.
APPROVED BY THE GOVERNOR JUNE 5, 2020.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 5, 2020.