Assigned to FIN††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† FOR COMMITTEE

 


 

 

 


ARIZONA STATE SENATE

Fifty-Fifth Legislature, First Regular Session

 

FACT SHEET FOR S.B. 1559

 

Native American veterans; tax settlement

Purpose

††††††††††† Extends, retroactive to January 1, 2020, the time period for claims to the Veterans' Income Tax Settlement Fund (VITS Fund) to be accepted to December 31, 2022, and delays the repeal of the VITS refund program.

Background

††††††††††† Laws 2016, Chapter 125 established the VITS Fund for Native American veterans to recover state income taxes that were withheld from active duty military pay. The legislation appropriated $2 million from the state General Fund (GF) to the VITS Fund in FY 2017. A veteran or the veteran's surviving spouse, personal representative, executor or other official of the estate may file a claim for a settlement payment if the veteran: 1) was an enrolled member of a Native American tribe; 2) maintained a domicile within the reservation boundaries of the veteran or veteranís spouse; and 3) had taxes withheld from active duty military pay between September 1, 1993, and January 1, 2006. Laws 2017, Chapter 215 changed the date for withholdings to be eligible for refund from payments that were withheld after July 1, 1977.

††††††††††† A VITS Fund claimant must provide evidence of eligibility, subject to the Arizona Department of Veterans Services (ADVS) approval, including: 1) proof of service; 2) a signed statement attesting to the veteranís tribal status during the period of service; and 3) evidence of the veteranís domicile on a reservation at the time of service. The claimant must provide, subject to the Arizona Department of Revenue (ADOR) approval, evidence of the amount of state income taxes withheld from the veteranís active duty military pay and a signed statement specifying that the veteran has not received a refund for the years for which the claimant is seeking a settlement payment.

††††††††††† The VITS Fund is administered by ADOR and monies left in the fund revert to the state GF on June 30, 2021. Claims are filed with ADVS and ADVS may not accept claims submitted after December 31, 2019. The VITS refund program is repealed January 1, 2022.

††††††††††† S.B. 1559 delays the date that unexpended and unencumbered monies left in the VITS Fund revert to the state GF from June 30, 2021, to June 30, 2024. There may be a fiscal impact to the state GF at that time depending on the VITS Fund balance.

Provisions

1.   Extends the deadline for the ADVS to accept VITS Fund claims from December 31, 2019, to December 31, 2022.

2.   Extends the date that the remaining monies from the VITS Fund revert to the state GF from June 30, 2021, to June 30, 2024.

3.   Extends the last date in which ADOR must annually report on the VITS Fund from October 1, 2021, to October 1, 2024.

4.   Delays the repeal of the VITS program from January 1, 2022, to January 1, 2024.

5.   Makes technical changes.

6.   Becomes effective on the general effective date, retroactive to January 1, 2020.

Prepared by Senate Research

February 15, 2021

MG/gs