*this information for Model City Tax Code purposes only
UAC Guidelines - Information Letters
TG 2000-01:Guidelines - Information Letters - Private Taxpayer Rulings
Arizona Revised Statutes Section 42-6005 formally established a Unified Audit Committee (UAC) composed of the Arizona Department of Revenue and the Cities and Towns which have adopted the Model City Tax Code (MCTC). The UAC is responsible for assuring uniformity and consistency of interpretation between cities on the provisions of the Model Code and for coordinating the uniform audit functions. This Statutory provision, effective July 18, 2000, requires the UAC to adopt and publish uniform interpretations of the Model City Tax Code.
To address the issuance of guidelines, information letters, and private taxpayer rulings the UAC has established the UAC-Ruling Subcommittee (UACRS). All requests for a written response should be forwarded to the UACRS at the following address:
c/o The League of Arizona Cities and Towns
1820 W. Washington Street
Phoenix, AZ 85007
Fax: (602) 253-3874
The UACRS will review the request and draft an appropriate response. Prior to issuance, a draft response will be submitted for consensus to the members of the UAC. Once approved by the UAC, the ruling or guideline will be issued and published on the website maintained by the League of Arizona Cities and Towns (www.modelcitytaxcode.org).
The various forms of written taxpayer guidance issued by the UAC are delineated herein and are accompanied by a statement to the degree of assurance which may be placed on each type of communication to a taxpayer. The procedures for requesting an interpretation or ruling are also contained in this notice accompanied by a UAC Private Taxpayer Ruling Request Form and copy of Model Code Section 597.
Guidelines are general, informative publications issued by the UAC to illustrate differences between Arizona State tax law and the MCTC on the application of tax on a transaction, group of transactions, an industry, or other business grouping which applies to all cities adopting the MCTC. A guideline may also involve an information notice to determine the means of calculating tax credits or the tax liability for businesses subject to city privilege or use tax. These notices are not intended to address a taxpayer’s specific circumstances. Their purpose is to create awareness in the business community that taxation differences between the State Tax Law and the MCTC are present, and that if they are engaging in the same type business transaction, further inquiry is warranted.
If the information contained in a uniform guideline is found to be erroneous and a taxpayer shows reasonable reliance on that information, the taxpayer will only be liable for any tax or interest that may result from following the erroneous advice. All penalties will be abated.
An information letter is a letter that can be requested from the UAC or the Tax Collector of a city or town that has adopted the MCTC. Information letters are only issued in response to written requests from taxpayers. An information letter responds to a taxpayer’s inquiry for general information or an inquiry that does not meet the requirements for a private taxpayer ruling. In many instances the response may simply involve a recitation of the tax law which addresses the issue.
If the information provided by the taxpayer was adequate and accurate and the advice given in an information letter is found to be erroneous, the cities will not assess penalties or interest directly attributable to the erroneous advice. However, the taxpayer will be liable for any tax that may be assessed. If the information provided by the taxpayer is inadequate and/or inaccurate, penalties and interest may also be assessed in addition to the tax.
The request for an information letter should be directed to the city or town in which you conduct business. If conducting business in more than one tax jurisdiction, the request for an information letter should be directed to the UACRS for response as provided above. Since the MCTC provides for code options, which allow cities to adopt variations to the MCTC, a request for information from more than one city must clearly identify the cities for which the information is sought. In this manner any differences which exist between the cities due to adoption of MCTC options by one or more of the cities will be addressed in the response. A city or town receiving a request may deem that the request is beyond the scope of an informational letter from a single tax jurisdiction and may forward the request to the UACRS. The UACRS will review the request and issue either an informational letter or a private taxpayer ruling after approval by the UAC.
Private Taxpayer Rulings
A private taxpayer ruling is a response by the UACRS to a written inquiry by an individual or organization that conforms to the provisions of Model code section 597. A private taxpayer ruling interprets and applies MCTC tax laws to a particular set of facts as described by the requester. A private taxpayer ruling is issued only for a specific fact situation and does not apply to different fact situations of the requesting taxpayer or to other taxpayers. A taxpayer requesting a private taxpayer ruling for business activities occurring in more than one city must identify the cities for which the ruling is sought. The private taxpayer ruling when issued will specify the cities for which the ruling is made in light of any MCTC options which may be applicable. The requesting taxpayer may rely on a private taxpayer ruling unless the request contains a misstatement or omission of material facts by the taxpayer, or the taxpayer’s representative.
If the taxpayer furnished accurate and adequate information in the request and the taxpayer establishes reasonable reliance on the ruling, tax, penalties and interest cannot be assessed if the advice that is provided in a private taxpayer ruling is found to be erroneous.
Attached is a copy of Section 597 of the MCTC that outlines the information necessary for a private taxpayer ruling. In addition, a form is attached that assists the taxpayer requesting a private taxpayer ruling.
City/Town Procedures for Requests for
Written Guidance on Model City Tax Code
UAC Private Taxpayer Ruling Request Form
A.R.S. 42-6005. Unified audit committee; joint audits