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HomeMy WebLinkAboutOrdinance 96.43 Amending chapter 8 of the town code relating to transaction privilege tax MARANA ORDINANCE NO. 96.43 AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF MARANA, ARIZONA, AMENDING CHAPTER 8 OF THE MARANA TOWN CODE BY ADOPTING THAT CERTAIN DOCUMENT ENTITLED "THE 1996 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF MARANA, ARIZONA" BY REFERENCE; ESTABLISlllNG AN EFFECTIVE DATE; PROVIDING PENALTIES FOR VIOLATIONS; AND REPEALING ALL RESOLUTIONS, ORDINANCES, AND RULES OF THE TOWN OF MARANA IN CONFLICT THEREWITH. WHEREAS, that document herein referred to as "THE 1996 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF MARANA, ARIZONA" has been made a public record by the adoption of Resolution No. 96-102 on November 19, 1996 by the Mayor and Council of Marana; and WHEREAS, it has been determined that the adoption of that public record herein referred to as "THE 1996 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF MARANA, ARIZONA" is in the best interests of the citizens of the Town of Mar ana. NOW, THEREFORE BE IT ORDAINED by the Mayor and Council of the Town of Maran a Arizona, as follows: .~- Section 1. That certain document entitled "THE 1996 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF MARANA, ARIZONA", three copies of which are on file in the office of the town clerk of the Town ofMarana, Arizona, said document having been made a public record by Resolution No. 96-102 of the Town of Maran a, Arizona, is hereby referred to and made a part hereof as if fully set out in this ordinance and is hereby adopted and amends chapter 8 of the Marana Town Code. Section 2. The provisions of this ordinance and the public record adopted herein are effective from and after December 31, 1996. Section 3. Any person found guilty of violating any provision of these amendments to the tax code shall be guilty of a class one misdemeanor. Each day that a violation continues shall be a separate offense punishable as herein above described. Section 4. The various town officers and employees are authorized and directed to perform all acts necessary or desirable to give effect to this ordinance and portion of the Town Code. Section 5. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof - Marana, Arizona Ordinance 96.43 Page 1 of2 PASSED AND ADOPTED by the Mayor and Council of the Town of Maran a, Arizona this 19th day of November, 1996. ATTES'f"~ .....~\ i (~- - Marana, Arizona Ordinance 96.43 Page 2 of2 ~ It~~ Mayor ONEA 1./ Section -100. Definitions Two definitions are changed in the proposed amendment as follows: 1. The term "prosthetic devices" is amended to add glucose test strips and durable medical equipment for use in the home which meets certain federal criteria to the definition. This means that both will be exempt from sales tax. ' 2. The term "taxpayer problem resolution officer" is added for those cities and towns collecting their own tax and for those cities and towns performing supplementary local audits while in the state collection system." For those cities with a population over 50,000, the taxpayer problem resolution officer must be an employee of the city. For other jurisdictions, this can be a contracted function, if desired. Section -230. Determination of gross income based upon method of reporting. This amendment is a conforming change to reflect the provisions of Chapter 99 of the Laws of 1996. This new law preempts municipal authority to tax certain items/functions including, as amended in this section, interest on finance cOf!tracts if separately stat~d. -, " '. ,- . Section -240. Exclusion of cash discounts, etc. This is also a conforming ch'ange to reflect the provisions of Chapter 99 of the Laws of 1996. It precludes including a manufacturer's cash rebate on auto sales in the calculation of gross income subject to tax. . " "c."-,, ;:: .-- , , , 'dC,' ' ' ,:' ',,' . ' . ':.,?o.: ,'- - , - . ( . . ,- -,';" . - . ". ,-, Section - 260. Exclusion of fees and taxes ~~om gross incol!'e; Iimitations~ -: . ... ....~ ,.. '. --...~._- ~..~,',- - ',;.";..; ;"':~:'" ",:-. '- ~"'::"-'. . -,;.,.. In this Section, a number of fees are excluded when calcUlating gross income' including the 911, excise tax, waste tire disposal fees and auto dealer documentation fees. Part of this amendment is due to the provisions of Chapter 99 of the Laws of 1996; the remainder is to conform our exemptions for these items to the state exemptions.' - , Section -350. Recordkeeping requirements.- This change will allow businesses to file their 'transaction privilege taxes electronically under the same rules and conditions as the state imposes. ' Section -460. Retail sales: measure of tax; burden of proof; exclusions. This amendment contains conforming language to reflect the deletion of Section -567, which dealt with the allocation of taxes when more than one city or town has nexus, basically a claim, over the sale. Section -465. Retail sales: exemptions Part of this amendment is also a conforming change to reflect the provisions of Chapter 99 of the Laws of 1996, including the exemption of sales of motor vehicles to non-residents if the vehicles are shipped out of state. The amendment also includes new subsections to exempt sales of natural gas used in motor vehicles and food products by the producers of the products from tax. The latter is required pursuant to state law. 3 Section -480. Utility services. Amendments to this section include exemptions for natural gas and liquefied petroleum gas used to propel a motor vehicle and for contributions received in aid of construction by utilities. The latter exemption, which conforms tax code language to state law, was requested by the major utilities in a separate submission to the Commission but also included in the amendments submitted by the League. Note: The amendments to Sections -500 through -597, with the exception of the deletion of Section -567, are all part of the recommended taxpayer bill of rights. Section -500. Administration of this Chapter; rule making. A new subsection (d) has been added to this section, and cities and towns "'{ill have different language in this subsection depending on whether they collec~ their own tax, contract with the state for collection or do supplementary auditing. For those jurisdictions under the state collection system, this amendment verifies that the provisions of the s!ate taxpayer bill ofrights apply to collections made by the State on your behalf. In ~eeping witJ:1 thec~rrent format of the tax code, this subsection . is "reserved" for those jurisdictions not under the state coll~ction system. The new local taxpayer . bill of rights which is part of this package of 1996 amendments will apply to the collections of those citiesandtowris.,'._:;: _ "'.".' .... . ..."'......:. ~. . " '.' .... . "- . . ." - . . Section -515. Duties of the taXpayer problemre~~hitiono!ficer.,OR (Rese~ed)*' _ . ,,~~--~~~~_~:~:~.~;~:r":'~;;~::~~:' ;~.: .~-.-~:;-..::.'j:_: .:~:~~~t~;_;~ .~.: :-..:,:.:.-t':-"':::"_:~.~'~:, :-. .~. .... -', -__~'~:\;<~ . ,:."" ..:~':.~:~~' _ . For cities and towns collecting their own tax and for-~ cities and. towns doing supplementary local . auditing inrelatiori to those audits~ ttJi~fainendmentrequires !he appointrnent of a taxpayer problem.'. " resolution,officer. . This does- Qot require that' a n~w employee be hired for this purpose; the duties . . can. be' assigned to 'an ~xistiri~femployee.-_ Essentially; ~his person will be an ombudsman, fo'r the . , taxpayer with very broad powers to intervene on the taxpayer's behalf. Patterned directly' after a - .. similar position at the State,' this person will also be required to' report quarterly to the mayor and council. .,' '. ,. " - .-- - . . Section. -516. Taxpayer a~sistan~e orders. OR (ReSe~ed)~ This new section giv~~ 'the taxpayer ~roblem resolution officer the authority to issue a taxpayer assistance order which can essentially stop the actions of the cityltown tax collector as they relate to a specific taxpayer, if the taxpayer problem resolution officer believes that a significant hardship will result to the taxpayer if the proposed action continues. Such an order can also release a lien issued under the tax code. There are limitations on what such an assistance order can cover. A taxpayer assistance order can be rescinded by the city/town manager or the chief administrative officer if there is no city/town manager. Section -517. Basis for evaluating employee performance. OR (Reserved)* This section requires that the tax collector solicit evaluations from taxpayers of employees who work for the tax collector and include such evaluations in the performance appraisal of those employees. It also prohibits basing an employee evaluation on how much the employee has assessed or collected in taxes. * This section will only apply to those cities and towns collecting their own tax or when a city or town in the state collection system is performing a supplementary local audit. 4 Section -540. Interest and civil penalties. This section contains a number of amendments relating to when and how interest and penalties can be assessed. Interest charges must now be calculated on a daily basis or be forgiven for a partial month's late filing. Penalties, except in the case of fraud or tax evasion, are capped at 25%, and additional consideration must be given to taxpayer explanations of why payment was late. It also expands provisions on waiving or adjusting penalties and defines "negligence" for the purposes of this section. Section -541. Erroneous advice or misleading statements by the tax collector; abatement of penalties and interest; definition. OR (Reserved)* This new section requires the abatement of penalties and interest if the tax collector has distributed incorrect forms or instructions or provided erroneou? advice to a taxpayer. - ,-", - Section -546. Closing agreements in cases of extensive taxpayer misundersta!1ding or misapplication; approval; rules.~ OR (Res.~rved)*, " ,., 1 : ; ~ -' . - This new section sets up a procedure for entering into closing agreements with taxpayers when there has been extensive misunderstanding or misapplication of the tax cOde and includes a reporting, requirement to the rriayor and council on an an,nual basis of activities under the section. A closing agreement can abate tax, 'penalties and interest or provide ,that the activity will only be taxed prospectively; such an agreement can only be issued with proper approval by the city or town., - " '. ,~''-S,Z:x.0~~.~~E!-.:<;-.~'~':~-:?: ' -.' ,-~, ~',""'...' '-~>:"_~!::~~.{i.~_" , S~ction-?5Q. _~iinitati~n' periods~j:;j'_: " .,;~~..... "', - ;;:, ",. . ..: '~~ _:::':-''':.,>T:,::~:;~~:~;::~i''-;_:~':~~:/;;''-:}:L:-~:''~:',__ .....,;}_~~~~;;~_::;:..t~:,.. . '-;. '_ . . :. -',.-- '_' . :.,> "_:~:-".':.,:..:i;:.-~_-.~~ -..~/ ~..;:._~ This amendment changes 'the' compUtation of time for which additional taxes can bf3'assessed. and restri~ts the "no limitation period" to cases in which there was an intent to ,evade tax or failure or refusal to file aratUm. _ There are no changes to this section for cities and towns in the state collection system ex~pt when they are performing 10~~J audi~. ' , . , - ' .- Section -555., Tax~lIector may exa~ine books and other records; failure to provide records. . '-,- :"- '"I' -.. - , The changes to this seCtion give the taxpayer a time frame in which to provide requested information before penalties can be assessed and make other conforming amendments. For cities and towns in the state collection system, the only change to this section is to remove the burden that the taxpayer has to prove that the auditing procedures do not meet "generally accepted auditing standards" . Section -556. No additional audits or proposed assessments; exceptions. OR (Reserved)* This is all new language to limit any additional audits of the same taxpayer for the same time period once an audit is completed and written notice has been sent to the taxpayer of the amount due except under limited circumstances. Also prohibits the increase in any assessment of taxes due unless the taxpayer failed to perform his responsibilities or there has been a court decision which would cause the assessment to increase. * This section will only apply to those cities and towns collecting their own tax or when a city or town in the state collection system is performing a supplementary local audit. 5 Section -560. Erroneous payment of tax; credits and refunds; limitations. The amendment to this section allows credits to be claimed for tax penalties and interest paid in excess of the amount actually due and requires. that interest be paid on such refunds from the date the claim is made for the refund. It also expands the grounds on which a refund can be claimed. For cities and towns in the state collection system, the change to this section provides that interest on refunds must only be paid from the date of the claim. Section -565. Payment of tax by the incorrect taxpayer or to the incorrect Arizona city or . town. . This section is expanded from its current application to when the wrong city or town is paid to include situations in which tax is paid by the. incorrect taxpayer and defines how such monies will be transferred to correct the error. Section -567. Allocation 'of tax on retail sales when more than one Arizona city or town has nexus. . . , -. A'-'-'" This section is now reserved for all taxing jurisdictions. The repeal of this section is designed to simplify the reporting process for businesses which drop-ship items into various Arizona municipalities while maintainif"!g a sales office in another municipality. The tax code currently requires tax collections to be divided between the municipalities involved; the change will allow the tax to be remitted only to the city/town wher~ the sales office is located. .~. . '. _.- ~,.-.~~' .~;,~>.),:,;~.~.,~~'.''''';.'- '..~-'~: - ...~, ":-'~'~_:'-. :~/--'" -' ." ",' Section -570.' Administrative review; petition for hearing or for red~termination; hearing or - -:, ..;~:,. redetermination ; finality of order. ,"':-: . . ' . _. _ .... _ :-. :". ::~.:J:t~.-:.,'.'~' -.... - ':.:.. ~,:...- .~_.:,\':". - ' - :.,' - ",:.. . - ',' - The amendment to thissectiori' removes the limitations on payment of taX under protest; requires that a taxpayer be given ari extension of time when a petition has n~t been submitted in proper form;- prescribes a time frame for notices of refunds or adjusted assessments and makes other minor changes to the process following administrative hearings. For cities and towns in the state collection syste~. ,if also clarifies that the state taxpayers bill of rights applies to th~ir taxpayers.... . - - '. - .' Sectio~ ~572. Expedited review of jeopardy assessme~ts. OR {Rese~ed}: .This is all new language to establish a process for quick (within 15 days) review of jeopardy assessments by the tax collector and a time frame during which court action can be commenced by the taxpayer after an adverse ruling on the assessment . Section -575. Judicial review. OR {Reserved}* This section has been amended to remove the requirement that taxes found due by the hearing officer must be paid prior to bringing a court action to challenge the tax. The case will be a trial de novo, but the tax collector is restricted from bringing up issues not raised during the administrative hearing process. Section -578. Reimbursement of fees and other costs; definitions. OR {Reserved}* This new section requires. reimbursement to a taxpayer for costs incurred in an administrative hearing if the taxpayer is the winning party at the hearing on the most significant issue or set of issues and the tax collector's position was not substantially justified. The costs are for attorney fees, expert witnesses, etc. and are capped at $20,000 per case. The taxpayer problem resolution officer will be in charge of determining how much of the taxpayer's costs will be reimbursed up to the maximum subject only to review by a court. * This section will only apply to those cities and towns collecting their own tax or when a city or town in the state collection system is performing a supplementary local audit. 6 Section -596. Agreement for installment payments of tax. OR (Reserved). This new section will allow a city or town to enter into an agreement for payment of tax due in installment payments. If the tax collector refuses to enter into such an agreement, the taxpayer can appeal to the taxpayer problem resolution officer who can reverse or modify the decision. Section -597. Private taxpayer rulings; request; revocation or modification; definition. OR (Reserved)* This section requires the issuance of a private taxpayer ruling upon request of a taxpayer and sets up a procedure for issuing such rulings. Also allows taxpayers to rely on rulings issued by the Department of Revenue on a state statute substantially identical to the tax code provisions, unless a city/town taxpayer ruling has been issued. Section -610. Use tax: imposition of tax & Section -620. Use tax: liability for tax Only those cities and towns which tax warranty, maintenance and service contracts and have a use tax will have amendments to these two sections of the code. Chapter 99 of the Laws of 1996 preempted the taxation of such contracts and the amendments to these two sections makes the conforming changes. " . Section -660. Use tax: exemptions. (If YOl:1r city or town has not adopted a use ~, you will not have this section.) The sa~~ ~a~ges 'as were made to ~~c~on -465 are made here for the use tax. ~" _.~':.-. :," .. -,' ",,< Regulation~16.2 Re~,(Jnst~L1ction'~ontraf;ting. . " . . . ~~"; .'- . The amendment to this regulation establishes how property value will be determined under recons~ction contracts by referencing litle 42 of the Arizona Revised Statutes. The value will be the same as the full cash value for secondary tax purposes with some exceptions in which case it will be the fair market value. ~. , . Regulations -450.2, 450.5 and 465.2 The changes to all three of these regulations is necessitated by the passage of Chapter 99 of the Laws of 1996. If you do not currently tax warranty, maintenance and service contracts, Regulation -465.2 will not appear in your amendment. * This section will only apply to those cities and towns collecting their own tax or when a city or town in the state collection system is performing a supplementary local audit. 7