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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
TPT; municipalities; audits; guidelines
Purpose
Allows the Arizona Department of Revenue (ADOR) to deny a municipal audit request regarding a taxpayer engaged in business in multiple cities or towns. Requires ADOR's Unified Audit Committee to publish uniform audit guidelines.
Background
ADOR is responsible for collecting and administering any transaction privilege and affiliated excise taxes, including use tax, severance tax, jet fuel excise tax and rental occupancy tax, imposed by any city or town. ADOR and each city or town must enter into an intergovernmental contract or agreement to provide a uniform method of administration, collection, audit and licensing of transaction privilege and affiliated excise taxes imposed by the state or cities or towns. The contract or agreement must include criteria for the denial of a request from a city or town for an audit of a taxpayer that is engaged in business in more than one city or town.
Statute requires the Director of ADOR to establish a Unified Audit Committee with cities and towns to coordinate uniform audit functions. If Arizona statutes and the Model City Tax Code are the same and ADOR has issued written guidance, ADOR's interpretation is binding on cities and towns (A.R.S. §§ 42-6001 and 42-6005).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows ADOR to deny a request by city or town to audit a taxpayer that is engaged in business in more than one city or town.
2. Prohibits a city or town from auditing a taxpayer that is engaged in business in more than one city or town, if ADOR denies the audit request.
3. Requires ADOR's Unified Audit Committee to establish and publish uniform audit guidelines.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date.
House Action
WM 1/24/24 DP 6-4-0-0
3rd Read 2/14/24 54-4-0-0-2
Prepared by Senate Research
February 22, 2024
MG/AB/cs