Appendix I - Modifications to Model City Code for Cities/Towns in State Collection System

*This information is for Model City Tax Code purposes only.

Appendix I - Modifications to Model City Code for Cities/Towns in State Collection System

Cities or towns in the State Collection system should make the following changes to the Model City Code:

Replace Sec.  -370(a) with:

(a) All deductions, exclusions, exemptions and credits provided in this Chapter are conditional upon adequate proof and documentation of such as may be required under A.R.S. Section 42-5022 or by this Chapter or Regulation.

Replace Sec.  -500(a), (c), and (d) with:

(a) The administration of this Chapter is vested in and exercised by the City of ______________________, and except as otherwise provided, and all payments shall be made to the City of ______________________.  The City may, pursuant to an intergovernmental agreement, contract with the State of Arizona Department of Revenue for the administration of the tax.  In such cases, "Tax Collector" shall also mean the Arizona Department of Revenue, when acting as agent in administering this tax.

...

(c) Except where such Regulations would conflict with administrative regulations adopted by the City Council or with provisions of this Chapter, all regulations on the Transaction Privilege Tax adopted by the Arizona Department of Revenue under the authority of A.R.S. 42-1005 shall be considered Regulations of this Chapter and enforceable as such.

(d) Taxpayers shall be subject to the State taxpayer bill of rights (A.R.S. § 42-2051 et. seq.).

Replace entire Sec.  -515 with:

Sec. ___-515.  (Reserved)

Replace entire Sec. -516 with:

Sec. ___-516.  (Reserved)

Replace entire Sec. -517 with:

Sec.___-517.  (Reserved)

Replace Sec.  -520(a) with:

(a) The taxpayer shall be required to use the report form authorized by the Tax Collector and shall mail or deliver the same, together with remittance for the amount of tax due, payable to the City of _____________, to the Tax Collector or any City representative or agent authorized to receive such payment.  The tax return shall be signed by the taxpayer or his authorized agent, and such signature shall be evidence that the person signing the return verifies the accuracy of the information supplied in the return.

Replace the body of Sec.  -530 with:

(a) Except as otherwise specified in this Section, the taxes levied under this Chapter shall be due, payable, and delinquent on the dates specified for the State Transaction Privilege Taxes in A.R.S. Section 42-5014. The taxpayer shall report on the taxes imposed by this Chapter at such frequency to be identical to the taxpayer's reporting frequency for the reporting of State Transaction Privilege Taxes.

(b) (Reserved)

(c) (Reserved)

(d) (Reserved)

(e) The Tax Collector may for good cause extend the date for making any return required under the provisions of this Section as prescribed by A.R.S.  Section 42-1107.

Replace the body of Sec.  -540 with:

Any taxpayer who shall have failed to timely pay any taxes imposed by this Chapter, or file a report for the same in a timely manner, or fail or refuse to allow examination of records by the Tax Collector, shall be subject to any interest or civil penalties on such tax in like manner as such interest and penalties are provided in A.R.S. Sections 42-1123 and 42-1125 for the State Transaction Privilege Tax.

(a) (Reserved)

(b) (Reserved)

(c) (Reserved)

(d) (Reserved)

(e) (Reserved)

(f) (Reserved)

(g) (Reserved)

(h) (Reserved)

(i) (Reserved)

Replace entire Sec. -541 with:

Sec. ___-541.  (Reserved)

Replace Sec.  -545(a) with:

(a) If a taxpayer has failed to file a return or if the Tax Collector is not satisfied with the return or payment of tax required, the Tax Collector may redetermine the tax due, plus penalties and interest, and notify the taxpayer, as provided and prescribed by A.R.S. Sections  42-1108 and 42-1109.

(1) (Reserved)

(2) (Reserved)

Replace entire Sec. -546 with:

Sec. ___-546.  (Reserved)

Replace Sec. -550(a),(b) and (c) with:

(a) Except as provided elsewhere in this Chapter, deficiency assessments for the taxes imposed by this Chapter must be issued within the limitation periods prescribed in A.R.S. Section 42-1104, and must meet the provisions of A.R.S.  Section 42-1108.

(b) (Reserved)

(c) In cases of failure to file a return or a false or fraudulent return, the limitation period shall be as prescribed in A.R.S. Section 42-1109.

Replace entire Sec.  -553 with:

Sec.___-553. (Reserved)

Replace Sec.  -555(b),(c) and (f) with:

(b) (Reserved)

(c) (Reserved)

...

(f) (Reserved)

Replace entire Sec. -556 with:

Sec. ___-556.  (Reserved)

Replace Sec.  -560(a) through (j) with:

(a) Except as provided in Section ____-565, the period within which a claim, meeting the requirements of subsection (c) of this Section, for credit may be filed, or refund allowed or made if no claim is filed, shall be as provided in A.R.S. Sections 42-1106 and 42-1118. For purposes of this Section, "claimant" means a taxpayer that has paid a tax imposed under this article and has submitted a credit or refund claim under this Section. Except where the taxpayer has granted a customer a power of attorney to pursue a credit or refund claim on the taxpayer's behalf, claimant does not include any customer of such taxpayer, whether or not the claimant collected the tax from customers by separately stated itemization.

(b) (Reserved)

(c) A credit or refund claim submitted by a claimant for credit or refund of any taxes, penalties, or interest paid must be in writing and:

(1) identify the name, address and city tax identification number of the taxpayer; and

(2) identify the dollar amount of the credit or refund requested; and

(3) identify the specific tax period involved; and

(4) identify the specific grounds upon which the claim is based.

(d) (Reserved)

(e) (Reserved)

(f) Interest shall be allowed on the overpayment of tax for any credit or refund authorized pursuant to this Section at the rate and in the manner set forth in Section ____-540(a). Interest shall be calculated from the date the Tax Collector receives the claimant's written claim meeting the requirements of subsection (c) of this Section.

(g) The denial of a refund by the Tax Collector is subject to the provisions of A.R.S. Section 42-1119.

(h) Claimants shall be subject to the State taxpayer bill of rights (A.R.S. Section 42-2051 et. seq.), except that reasonable fees and other costs may be awarded and are not subject to the monetary limitations of A.R.S. Section 42-2064 if the Tax Collector's position was not substantially justified or was brought for the purpose of harassing the claimant, frustrating the credit or refund process or delaying the credit or refund. For the purposes of this Section, "reasonable fees and other costs" means fees and other costs that are based on prevailing market rates for the kind and quality of the furnished services, not to exceed the amounts actually paid for expert witnesses, the cost of any study, analysis, report, test, project or computer program that is found to be necessary to prepare the claimant's case and necessary fees for attorneys or other representatives.

(i) (Reserved)

(j) Any refund paid under the provisions of this Section shall be paid from the Privilege Tax revenue accounts.

Replace body of Sec.  -570 with:

(a) Closing agreements between the Tax Collector and a taxpayer have no force of law unless made in accordance with the provisions of A.R.S. Section 42-1113.

(b) Administrative review.

(1) Petitions of appeal shall be made to, and hearings shall be conducted by, the Arizona Department of Revenue, in accordance with the provisions of A.R.S. Section  42-1251, as modified by Section ___-571.

(2) (Reserved)

(3) (Reserved)

(4) (Reserved)

(5) Hearings shall be held by the Arizona Department of Revenue in accordance with the provisions of A.R.S. Section 42-1251.  The Department's decision may be appealed to the State Board of Tax Appeals, in accordance with the provisions of A.R.S. Section 42-1253.

Replace body of Sec.  -570 with (continued):

(6) (Reserved)

(7) (Reserved)

(8) (Reserved)

(c) (Reserved)

(d) (Reserved)

(e) Taxpayers shall be subject to the State taxpayer bill of rights (A.R.S. § 42-2051 et. seq.).

Replace the body of Sec.  -571 with:

(a) If the Tax Collector believes that collection of any amounts imposed by this Chapter will be jeopardized by delay, he shall issue notice to the taxpayer in accordance with the provisions of A.R.S. Section 42-1111.

(b) In cases where such jeopardy notice has been issued, the taxpayer must meet the provisions of A.R.S. Section 42-1111, concerning appeals of jeopardy assessments, before any request for administrative review shall be honored.  Any bond or collateral that may be required shall meet the provisions of A.R.S. Section 42-1102.

(c) (Reserved)

(d) (Reserved)

(e) (Reserved)

Replace entire Sec. -572 with:

Sec. ___-572.  (Reserved)

Replace Sec.  -575(a)-(d) with:

(a) Appeal of a State Board of Tax Appeals decision to the courts is valid only if all the provisions of A.R.S. Section 42-1254 are met.

(b) (Reserved)

(c) (Reserved)

(d) (Reserved)

Replace entire Sec.  -577 with:

Sec. ___-577.  (Reserved)

Replace entire Sec. -578 with:

Sec. ___-578.  (Reserved)

Replace Sec.  -590(b) with:

(b) Actions to recover tax. The Arizona Department of Revenue, or any agent or representative authorized by that Department, may bring action, in the name of the City, to recover taxes as provided in A.R.S. Section 42-1114.

Replace entire Sec. -596 with:

Sec. ___-596.  (Reserved)

Replace entire Sec. -597 with:

Sec. ___-597.  (Reserved)

Replace entire Reg.  -520.1 with:

Reg. ___-520.1.  (Reserved)

Replace entire Reg.  -555.1 with:

Reg. ___-555.1.  (Reserved)