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HomeMy WebLinkAboutResolution 2023-116 Approving and Authorizing the Mayor to Execute an IGA between the Arizona Department of Revenue and Town of Marana MARANA RESOLUTION NO. 2023-116 RELATING TO TRANSACTION PRIVILEGE TAX;APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE STATE OF ARIZONA DEPARTMENT OF REVENUE AND THE TOWN OF MARANA FOR THE ADMINISTRATION, COLLECTION, AUDIT, AND LICENSING OF TRANSACTION PRIVILEGE TAXES, USE TAXES, SEVERANCE TAXES, JET FUEL EXCISE AND USE TAXES AND RENTAL OCCUPANCY TAXES IMPOSED BY THE STATE, CITIES OR TOWNS WHEREAS Title 11, Chapter 7, Article 3 (A.R.S. § 11-952) authorizes two or more public agencies to enter into intergovernmental agreements to contract for services if authorized by their legislative or governing bodies; and WHEREAS A.R.S. § 42-6001 et seq. was amended effective January 1, 2015 to provide that the Arizona Department of Revenue (ADOR) shall enter into an intergovernmental contract or agreement (IGA) pursuant to A.R.S. § 11-952 to provide a uniform method of administration,collection,audit and licensing of transaction privilege and affiliated excise taxes imposed by the State, cities or towns; and WHEREAS representatives of ADOR and representatives of Arizona cities and towns, with support from the League of Arizona Cities and Towns, have negotiated the terms of a new IGA to take effect as described within that document, which can be adopted individually by each Arizona city and town, and is the subject of this resolution; and WHEREAS the Town Council finds that entering into this intergovernmental agreement is in the best interests of the Town and its citizens. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, AS FOLLOWS: SECTION 1. The intergovernmental agreement between the Arizona Department of Revenue and the Town of Marana, attached to and incorporated by this reference in this resolution as Exhibit A, is hereby approved and the Mayor is hereby authorized to execute it for and on behalf of the Town of Marana. SECTION 2. The Town's Manager and staff are hereby directed and authorized to undertake all other and further tasks required or beneficial to carry out the terms, obligations, and objectives of the intergovernmental agreement. 00063575.DOCX/1 Resolution No.2023-116 - 1 - PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 21st day of November 2023. p poit..„ ra r a s i Ed Honea ATTEST: AP_ OVED AS TO FORM: 411, . ,k David L. Udall, Town Clerk Ja► - r airall, Town Attorney i 411111 & MARANA ESTABLISHED 1977 00063575.DOCX/1 Resolution No.2023-116 -2- Exhibit A to Resolution No. 2023-116 INTERGOVERNMENTAL AGREEMENT BETWEEN THE ARIZONA DEPARTMENT OF REVENUE AND THE TOWN OF MARANA THIS INTERGOVERNMENTAL AGREEMENT ("Agreement") is entered into this 21 st day of November, 2023, by and between the Arizona Department of Revenue ("Department") and the Town of Marana, an Arizona municipal corporation ("City/Town"). This Agreement shall supersede and replace all previous intergovernmental agreements, including amendments thereto, entered into by the Department and City/Town regarding the administration, collection, audit, and/or licensing of transaction privilege tax, use tax, severance tax, jet fuel excise and use taxes, and rental occupancy taxes (collectively referred to as "Taxes") imposed by the State, City/Town, and other Arizona municipalities. RECITALS WHEREAS, A.R.S. Title 11, Chapter 7, Article 3 (A.R.S. § 11-952 et seq.) authorizes two (2) or more public agencies to enter into intergovernmental agreements to contract for services, if authorized by their legislative or governing bodies. WHEREAS, A.R.S. § 42-6001 et seq. was amended effective January 1, 2015 to provide that the Department shall collect and administer any transaction privilege and affiliated excise taxes imposed by any Arizona municipality and that the Department and each municipality shall enter into an intergovernmental contract or agreement pursuant to A.R.S. § 11-952 to provide a uniform method of administration, collection, audit, and licensing of transaction privilege and affiliated excise taxes imposed by the State and Arizona municipalities. WHEREAS, City/Town has taken appropriate action by ordinance, resolution, or otherwise, pursuant to the laws applicable to the governing body of City/Town, to approve and authorize City/Town to enter into this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, the Department and City/Town enter into this Agreement as follows: 1. Definitions 1.1 A.R.S. means the Arizona Revised Statutes. 1.2 Adoption of an Ordinance means final approval by majority vote of the City/Town council. September 2023 Page 1 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 1.3 Ambassador Program means the Department's provided structure and support of curriculum related to tax administration and compliance education. 1.4 Arizona Management System means the State's professional, results -driven management system that focuses on customer value and vital mission outcomes for citizens. The system is based on principles of Lean, a proven people -centered approach that has delivered effective results in both public and private sectors. Lean focuses on customer value, continuous improvement and engaged employees to improve productivity, quality, and service. 1.5 Audit means an examination and verification of accounts and records to determine taxpayer compliance with A.R.S. Title 42 and the Model City Tax Code, or any other assessment issued pursuant to A.R.S. § 42-1108. 1.6 City Services means the Department's team or successor unit thereof that assists Arizona municipalities with administrative functions and all other activities related to transaction privilege tax licensing, collection, and compliance of any kind. In this Agreement, all references to electronic communications with City Services shall be directed to the team's address at citiesunit@azdor.Rov. 1.7 Closing Agreement means an agreement to settle a tax liability pursuant to A.R.S. § 42-1113. 1.8 Collection means activities to collect established liabilities for transaction privilege taxes, fees, and related penalties and interest that are due and owing. 1.9 Confidentiality Standards means the standards set forth in A.R.S. § 42-2001 et seq., Model City Tax Code § 510, Appendix A of this Agreement, and such other written standards mutually agreed to by the Department and City/Town, and which will be incorporated into Appendix A of this Agreement. 1.10 Development Fees has the same meaning prescribed in A.R.S. § 42-5075(B). 1.11 Desk Review means any assessment issued pursuant to A.R.S. § 42-1109(B). 1.12 Federal Tax Information ("FTI") means Federal income tax returns or return information the Department receives from the Internal Revenue Service, including any information created by the Department derived from that information. Documents obtained from a taxpayer or State income tax returns are not considered Federal Tax Information. The scope of this Agreement does not permit the Department to share FTI with any Arizona municipality. 1.13 Independent Contractor means any individual or entity with which City/Town may enter into an agreement to perform transaction privilege tax administration, collection, audit, licensing, and any other related duties described in this Agreement or A.R.S. § 42-6001 et seq. 1.14 Model City Tax Code means the document defined in A.R.S. § 42-6051. September 2023 Page 2 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 1.15 Municipal Tax or Municipal Taxes means collectively the transaction privilege and affiliated excise taxes, including use tax, severance tax, jet fuel excise and use tax, and rental occupancy tax imposed by City/Town in accordance with the Model City Tax Code and similar taxes imposed by City/Town pursuant to a City/Town code section outside the Model City Tax Code that are collected via the standard transaction privilege tax return. Unless the context provides otherwise, this definition includes municipal privilege tax, municipal privilege tax license fees, and all related penalties, interest and other similar charges collected by the Department on behalf of an Arizona municipality. 1.16 Options Chart means any chart contained in a section of the Model City Tax Code which identifies the various approved standard Options adopted by an Arizona municipality. 1.17 Primary Point of Contact ("PPOC") means a designated City/Town representative with the primary responsibility for communicating with the Department and their respective staff on any matters described within this Agreement. The PPOC must be an individual qualified to receive Tax Information under Section 2.1 of this Agreement and be included on the Master Authorization List referenced in Section 2.3 of this Agreement. 1.18 Profile means a dedicated section of the Model City Tax Code that provides specific information for each Arizona municipality, including contact information, applicable tax rates, and amendments and provisions unique to City/Town. 1.19 Standard Audit Life Cycle Process Map means a document containing the decisions and procedures adopted by the Department and Arizona municipalities from the assignment of audits through final resolution consistent with this Agreement and the Arizona Management System principle of continuous improvement. This document shall be reviewed by the Department and Arizona municipalities as needed, not less than annually, with any changes memorialized in a revised map. In the event of a disagreement regarding proposed changes, the Standard Audit Life Cycle Process Map shall be referred to SMART for resolution. 1.20 Standard Authorization List Update Process Map means a document containing the decisions and procedures adopted by the Department and Arizona municipalities to keep an updated list of current employees and contractors who are authorized to receive Tax Information consistent with this Agreement and with the Arizona Management System principle of continuous improvement. This document shall be reviewed by the Department and Arizona municipalities as needed, not less than annually, with any changes memorialized in a revised map. In the event of a disagreement regarding proposed changes, the Standard Authorization List Update Process Map shall be referred to SMART for resolution. 1.21 Standard Inter -Jurisdictional Transfer Process Map means a document containing the decisions and procedures adopted by the Department and Arizona municipalities to document and authorize the transfer of erroneously reported or September 2023 Page 3 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration allocated tax from one (1) municipality to another based upon a municipality's request or during the audit process consistent with this Agreement and with the Arizona Management System principle of continuous improvement. This document shall be reviewed by the Department and Arizona municipalities as needed, not less than annually, with any changes memorialized in a revised map. In the event of a disagreement regarding proposed changes, the Standard Inter -Jurisdictional Transfer Process Map shall be referred to SMART for resolution. 1.22 State means the State of Arizona. 1.23 State & Municipal Audit Resolution Team ("SMART") means an advisory committee responsible for resolving issues as set forth in Section 15 of this Agreement. 1.24 State Tax or State Taxes means transaction privilege tax and affiliated excise taxes, including use tax, severance tax, and jet fuel excise and use taxes imposed by the State of Arizona or its counties. 1.25 Tax Information means information deemed confidential taxpayer information protected from disclosure pursuant to A.R.S. § 42-2001 et seq. or Model City Tax Code § 510 concerning the business financial affairs or operations of a taxpayer as it relates to Municipal Taxes or State Taxes. Tax Information includes all financial information related to transaction privilege taxes obtained from any source related to an individual taxpayer and all such aggregate financial information related to any group of identified or identifiable taxpayers. (a) Examples of Tax Information include without limitation: (1) Any information provided by the Department to City/Town derived from any source including tax returns, reports, tax license applications, and the New License Report or License Update Report; and (2) Any information received by, recorded by, prepared by, furnished to, or collected by the Department or City/Town with respect to a transaction privilege tax return or the termination or possible existence of liability of any person for any transaction privilege tax and related penalty or interest, such as the taxpayer's identity; the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, taxes withheld, deficiencies, over -assessments, or tax payments; or whether the taxpayer's account was, is being, or will be examined or subject to audit, desk review, investigation, collection, or processing. (b) Taxpayer identifying information obtained by City/Town from any source not identified in Section 1.25(a) of this Agreement is not Tax Information for purposes of this Agreement. September 2023 Page 4 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 1.26 Voluntary Disclosure Agreement means a document used in a voluntary disclosure program designed for eligible taxpayers with exposure for tax liability and/or civil penalties arising from a failure to report and/or pay all Taxes due which allows the taxpayer to come into voluntary compliance. 2. Authorized Access Lists 2.1 Statutory Authority: The disclosure of information relating to State Taxes and Municipal Taxes is governed by A.R.S. § 42-2001 et seq., and, for reporting periods prior to January 1, 2015, by Model City Tax Code § 510. 2.2 Qualified Recipients of Information: The Department and City/Town shall only disclose Tax Information related to State Tax and Municipal Tax pursuant to this Agreement to individuals authorized by law as described in Section 2.1 of this Agreement, including those authorized persons listed on the Authorized Access Lists provided by the Department and Arizona municipalities. Questions related to a listed Department recipient may be directed to City Services at citiesunit@azdor.pov. Questions related to a listed Arizona municipal recipient may be directed to the PPOC of the pertinent Arizona municipality. 2.3 Department's Authorized Access List: Pursuant to Section 2.4(c) of this Agreement, the Department shall maintain, update, and provide a current statewide Master Authorization List of names, job titles, and contact information of the Department staff and Arizona municipal representatives who are authorized by law as described in Section 2.1 of this Agreement to receive State Tax and Municipal Tax information from the Department or Arizona municipalities, as defined in the Standard Authorization List Update Process Map. Updates shall be provided on not less than a monthly basis. The Department shall promptly notify Arizona municipalities of any individual whose authorization to receive State Tax and Municipal Tax information has been revoked for any reason. 2.4 City/Town's Authorized Access List: City/Town shall maintain, update, and provide a current Authorized Access List of names, job titles, and contact information for all persons acting on behalf of City/Town authorized by law as described in Section 2.1 of this Agreement to receive State Tax and Municipal Tax information as defined in the Standard Authorization List Update Process Map. (a) City/Town shall indicate one PPOC on the Authorized Access List to resolve any administrative issues with the Authorized Access List. At its discretion, City/Town may also indicate an additional individual as a back- up or alternate PPOC. (b) City/Town shall ensure all personnel on the Authorized Access List meet the requirements indicated in the Confidentiality Standards (Appendix A) including completing all required confidentiality training certification and recertification as required from time to time, within the time required by the Department. September 2023 Page 5 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (c) Upon execution of this Agreement and on the first day of each calendar quarter thereafter, City/Town shall email to City Services at citiesunit cr azdor.gov a current Authorized Access List of its staff and representatives authorized to receive State Tax and Municipal Tax information from the Department and Arizona municipalities, including additions and deletions, changes in job titles, and contact information. City/Town's PPOC shall promptly notify the Department of any person whose authorization to receive State Tax and Municipal Tax information is revoked for any reason. (d) The Department shall review City/Town's Authorized Access List. If the Department finds that any person on the list has not completed the required confidentiality training in a timely manner or does not meet the Confidentiality Standards in Appendix A of this Agreement, the Department shall notify the City/Town PPOC to resolve the issue. The Department shall not include that person on the Master Authorization List until the issues have been resolved to the satisfaction of the Department. 2.5 Independent Contractors: (a) City/Town may at times choose to enter into a contract with an Independent Contractor to perform the transaction privilege tax administration, collection, audit, desk review, licensing, and other duties described in this Agreement or A.R.S. § 42-6001 et seq. (b) In accordance with A.R.S. §§ 42-1004 and 42-6002, no contract with an Independent Contractor may be entered into on a contingency fee basis for the performance of any transaction privilege tax related functions, including but not limited to license inspections, audits, desk reviews, or collections. (c) Within ten (10) business days of ratification of this Agreement, or subsequent execution of such a contract between City/Town and an Independent Contractor, City/Town shall provide a copy of each such contract to the City Services electronically at citiesunit a,azdor.pov. (d) City/Town shall notify the Department of the expiration, termination, or amendment of any agreement with such Independent Contractors within ten (10) business days of such event. (e) In this Agreement it is presumed that any reference to a municipal employee such as a license inspector, auditor, desk reviewer, collector, supervisor, etc., also refers to an Independent Contractor performing that function on behalf of the Department or City/Town. (f) An Independent Contractor is subject to all training requirements, authorization limitations, and other privileges and restrictions incorporated into this Agreement or provided in statute in the same form and manner as September 2023 Page 6 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration such conditions apply to an employee performing the same function on behalf of the Department or City/Town. (g) When an Independent Contractor issues any correspondence to a taxpayer on behalf of the Department or City/Town, the Independent Contractor shall expressly identify all of the following on such correspondence: the Independent Contractor's name; the name of the Independent Contractor's firm, if applicable; the Independent Contractor's status as a license inspector, auditor, desk reviewer, or collector acting on behalf of the Department or City/Town; the Independent Contractor's mailing address, telephone number, and e-mail address; and the telephone number and e-mail address of a specific person who is an employee of the Department or City/Town capable of responding to the issues raised in the correspondence for the Department or City/Town. (h) The Department and/or City/Town may pursue any remedy authorized by this Agreement or by statute for a violation of this Section by an Independent Contractor. 2.6 Sharing of Authorized Access Lists: The Department shall share the Department's Authorized Access List and the Authorized Access Lists for all Arizona municipalities provided to the Department on the Core SFTP site. The Department shall update the lists on a monthly basis with information provided by each Arizona municipality, or as needed to immediately remove any person whose authorized access has been revoked by the Department or an Arizona municipality. 3. Disclosure of Information by City/Town to the Department or Another Arizona Municipality 3.1 Disclosure and Use of Municipal Tax Information: Any Tax Information released by City/Town to the Department or another Arizona municipality may only be used by persons authorized to receive such Tax Information for tax administration and collection purposes and may not be disclosed to the public in any manner that does not comply with A.R.S. § 42-2003, and/or Model City Tax Code § 510 for reporting periods prior to January 1, 2015. All Tax Information shall be stored and destroyed in accordance with the Confidentiality Standards (Appendix A). 3.2 Municipal Ordinances: City/Town shall provide the Department with a copy of its Municipal Tax Code or any City/Town ordinances imposing the taxes to be collected hereunder within ten (10) calendar days of a request for such information from the Department. This information shall be sent to City Services electronically at eitiesunit(&azdor.gov. (a) Tax Code Changes: City/Town shall provide notice to the Department of any tax code change with a copy of any ordinance adopted by City/Town that imposes or modifies the Municipal Taxes or municipal privilege tax September 2023 Page 7 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration license fees to be collected hereunder within ten (10) calendar days of adoption of the ordinance. This information shall be sent to City Services electronically at citiesunit@azdor.gov. (1) City/Town agrees that any ordinance that changes a tax rate, Option selection, or includes the addition or removal of a unique Model City Tax Code exception shall take effect on the first day of the month that is at least sixty (60) calendar days after the City/Town council adopts the change. City/Town and the Department recognize there may be occasions when the City/Town council establishes an effective date less than sixty (60) calendar days after adoption. If City/Town chooses to propose an ordinance with an effective date that is less than sixty (60) calendar days after adoption, City/Town shall notify the Department as soon as possible after that choice is made. (2) The Department shall incorporate all ordinance changes into the official copy of the Model City Tax Code within ten (10) calendar days of receipt of notice from City/Town. The copy provided to the Department may be an electronic copy but shall reflect the identical language contained in the version adopted by the City/Town and shall contain the required signatures indicating council approval. (3) The Department shall notify City/Town when the tax code change has been incorporated and City/Town is responsible for confirming the change has been correctly entered in the official copy of the Model City Tax Code. (4) Pursuant to A.R.S. § 42-6052, if City/Town fails to notify the Department of a tax code change within ten (10) calendar days after City/Town council approval, the ordinance shall be considered null and void. All tax code changes described in this Section shall have no effect until reflected in the official copy of the Model City Tax Code. (b) Annexation Ordinances: Within fifteen (15) calendar days following the adoption of an annexation ordinance, one (1) copy of the ordinance and notification of the effective date of such ordinance shall be sent to the Department via email at GISgazdor.gov and City Services at citiesunit(a,azdor.gov. City/Town may provide the Department with a list of businesses subject to Municipal Taxes known to be located in the annexed area. (c) Review of the Model City Tax Code: City/Town shall be responsible for reviewing the information contained on its Profile, the Options Charts, tax rates for City/Town, and other information specific to City/Town contained in the official copy of the Model City Tax Code and ensuring it is correct. September 2023 Page 8 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration City/Town affirms that it has an ongoing obligation to notify City Services of any changes needed to such information at citiesunit@azdor.gov. 3.3 Development Fees: Upon request by the Department to City/Town's PPOC, City/Town shall provide to the Department any information regarding Development Fees imposed by City/Town under A.R.S. § 9-463.05 to assist the Department with the auditing of taxpayers and the ordinary billing and collection of taxes. 3.4 Prior Audits: Upon request by the Department, City/Town shall allow inspections and copies of any City/Town tax audits conducted prior to January 1, 2015. 3.5 Other Information: City/Town shall provide other relevant information necessary for tax administration and collection purposes as requested by the Department. 4. Disclosure of Information by Department to City/Town 4.1 Statutory Authority: The Department may disclose information relating to State Taxes and Municipal Taxes to City/Town pursuant to A.R.S. § 42-2003 if the information relates to a taxpayer who is or may be taxable by a county, city, or town or who may be subject to audit by the Department pursuant to A.R.S. § 42-6002. 4.2 Restrictions on Use and Disclosure to Unauthorized Parties: Any Tax Information disclosed by the Department to City/Town is subject to all restrictions provided for in A.R.S. § 42-2003. Tax Information shall only be used by persons authorized to receive such Tax Information for internal tax administration purposes, including audit, desk review, collection, and licensing activity, and may not be disclosed to the public or any unauthorized party in any manner that does not comply with the Confidentiality Standards (Appendix A). 4.3 Liability for Improper Disclosure: The disclosure of confidential information concerning Arizona taxes is governed by A.R.S. § 42-2001 et seq., which strictly controls the accessibility and use of this information. Individuals who receive confidential information relating to State Taxes and Municipal Taxes from the Department are subject to the penalties provided in A.R.S. § 42-2004 and other applicable statutes if they misuse or improperly disclose this information to unauthorized individuals. 4.4 Reporting Potential Disclosure Violations/Incidents: The Department shall not withhold Tax Information from City/Town provided that City/Town complies with A.R.S. § 42-2001 et seq., and the Confidentiality Standards (Appendix A). (a) If City/Town or the Department has information to suggest City/Town or any of its duly authorized representatives has violated A.R.S. § 42-2001 et seq. or the Confidentiality Standards (Appendix A), City/Town or the Department shall immediately notify City Services at citiesunit a.azdor.gov, the Department's Disclosure Officer at DisclosureOfficer@azdor.gov, and the Department's Information Security Team at 1nfoSec ,., gzdor. og_v. September 2023 Page 9 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (b) City/Town and the Department shall fully cooperate with the Department's Disclosure Officer and Information Security Team in investigating the alleged violation and shall promptly address any identified issues. (c) The Department's Disclosure Officer and Information Security Team: (1) Shall send written notice to City/Town's PPOC detailing the alleged breach as understood by the Department and request a response to the allegation within twenty (20) calendar days of the date of the letter, and (2) May inspect City/Town's records, facilities, and equipment to determine whether there has been a violation, and (3) Shall review the written response from City/Town and consider the information contained therein and all relevant circumstances surrounding the alleged violation prior to issuing any determination, and (4) Shall issue a written determination delivered by certified mail to City/Town regarding the alleged violation within sixty (60) calendar days of the date of City/Town's response letter. If the Department determines that a violation has occurred, the Department shall indicate whether a suspension of information is warranted and the length of the suspension. During the period of suspension, City/Town shall not access information maintained or created by the Department related to City/Town. (d) If the Department makes a written determination to suspend sharing of information, City/Town may, within ten (10) calendar days of receiving the written determination, submit a written request to SMART requesting the group review the determination as provided in Section 15 of this Agreement. (e) If there is a suspension of Tax Information sharing with City/Town, the Department shall maintain all information collected or created during the suspension period related to City/Town that would otherwise have been shared with City/Town and shall assist City/Town with accessing the accumulated information for City/Town immediately upon termination of the suspension. (f) Under no circumstances shall the suspension of any right to receive Tax Information adversely impact the Department's delivery or transfer of any City/Town revenues in any manner. 4.5 Information to be Provided: The Department shall provide information pursuant to A.R.S. § 42-6001(B). The Department shall provide such information as outlined September 2023 Page 10 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration in Appendix B and elsewhere in this Agreement, which shall only be modified in accordance with Section 4.7 of this Agreement. (a) The Department shall not provide Federal Tax Information to City/Town. (b) In addition to the information detailed in Appendix B of this Agreement, the Department shall disclose, upon request, the following information to City/Town: (1) Department tax audits, including all information related to all Arizona municipalities included in the tax audit; and (2) Other relevant information necessary for City/Town's tax administration and collection purposes, including all information necessary to verify that City/Town received all revenues collected by the Department on behalf of City/Town. 4.6 Storage and Destruction of Tax Information: All Tax Information provided by the Department to City/Town shall be managed, stored, protected, and destroyed in accordance with the Confidentiality Requirements (Appendix A). 4.7 Specificity of Data: Pursuant to A.R.S. § 42-6001, the Department and City/Town agree that the data fields identified in Appendix B of this Agreement and the JT-I, TPT-2, and TPT-EZ forms in Appendix C of this Agreement (also provided online at www.azdor.gov) meet the specificity requirements of City/Town. The data fields identified in Appendix B and the forms in Appendix C may be revised or replaced only by mutual agreement of the Department and Arizona municipalities, with any unresolved issues being referred to SMART for final determination. 4.8. Notwithstanding any provision to the contrary, nothing in this Section shall prevent the Department from complying with state information security requirements in the situation of a data breach or similar event. 5. Audit The Department shall administer audit functions with City/Town in accordance with the Standard Audit Life Cycle Process Map and with the following provisions. 5.1 Training: All auditors, desk reviewers, and supervisors shall be trained in accordance with the policies of the Department. Auditors and desk reviewers who have not completed the training may only work in conjunction with a trained auditor or supervisor and cannot be the only auditor or desk reviewer assigned to the audit or desk review. The Department shall do all the following: (a) Provide semi-annual audit and desk review training in accordance with A.R.S. § 42-6002(C) and be responsible for the costs of the training, limited to any cost for procuring the site and training materials; September 2023 Page 11 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (b) Notify City/Town of any training sessions at least thirty (30) calendar days before the date of the training session; (c) Permit City/Town auditors, desk reviewers, and supervisors to attend any scheduled training as space permits at any designated training location; (d) Provide additional training, as needed, to inform auditors, desk reviewers, and supervisors regarding changes in State law, the Model City Tax Code, audit and desk review procedures, or Department policy. 5.2 Conflicts of Interest: (a) An auditor, desk reviewer, supervisor, or Independent Contractor trained and authorized to conduct an audit or desk review, in addition to the restrictions provided under A.R.S. Title 38, Chapter 3, Article 8, § 38-501 et seq., shall not conduct any of the following prohibited acts: (1) Represent a taxpayer in any tax matter against the Department or City/Town while employed by or in an Independent Contractor relationship with the Department or City/Town. (2) Attempt to use his/her official position to secure any valuable thing or valuable benefit for himself/herself or his/her family members. (3) Represent a taxpayer before the Department or City/Town concerning any matter in which he/she personally participated for a period of one year after he/she ends employment or the Independent Contractor relationship with the Department or City/Town. (4) Use information he/she acquires in the course of the official duties as an auditor, desk reviewer, supervisor, or Independent Contractor in a manner inconsistent with his/her official duties without prior written approval from the Department. (5) For a period of one (1) calendar year after he/she ends employment by or an Independent Contractor relationship with the Department or City/Town, work in the same firm as a person who represents a taxpayer against the Department or City/Town unless the firm institutes a formal screen or ethical wall to prevent any sharing of information between the person and the remainder of the firm. Documentation of such formal screen or ethical wall shall be provided by the firm to the Department or City/Town upon request. (6) Receive compensation from a source other than City/Town pursuant to an agreement with City/Town for the performance any work or transaction performed expressly on behalf City/Town. September 2023 Page 12 of 39 or of of Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (7) Make any representation of being an employee or contractor of City/Town or the Department in marketing and promotional materials soliciting work or transactions to be performed on behalf of a taxpayer or potential taxpayer. (b) In addition to any other remedies available to the Department and City/Town by statute and under the terms of this Agreement, the Department may revoke an individual's authority to audit or perform desk reviews on behalf of the Department or City/Town and prohibit the use of any auditor, desk reviewer, supervisor, or Independent Contractor who violates this provision. 5.3 Audits and Desk Reviews: (a) City/Town may request the Department conduct an audit or desk review of any taxpayer engaged in business in City/Town, including a taxpayer whose business activity is subject to tax by City/Town but is not subject to tax by the State. The Department and Arizona municipalities shall collaboratively establish and maintain minimum justification standards and procedures City/Town shall adhere to when submitting an audit or desk review request. (b) City/Town may conduct an audit or desk review of a taxpayer engaged in business only in City/Town. Before commencing such audit, City/Town shall submit a Field Audit Request Form. Before commencing such desk review, City/Town shall submit the request using the Desk Review Approval Excel Sheet. The Department shall provide City/Town with a determination of approval or denial of the request within ten (10) calendar days of the notice from City/Town. (c) Except as permitted below, the Department shall conduct all audits and desk reviews of taxpayers having locations in two (2) or more Arizona municipalities. A City/Town auditor may participate in any audit or desk review City/Town requested the Department to perform. (d) City/Town shall notify the Department if it wants to conduct an audit or desk review of a taxpayer having locations in two (2) or more Arizona municipalities and whose business activity is subject to tax by City/Town but is not subject to tax by the State. The Department shall authorize such audits or desk reviews, to be overseen by the Department, unless there is already an audit or desk review of the taxpayer in process, scheduled, or planned, or the Department determines the audit or desk review selection is discriminatory, an abuse of process, or poses other similar defects. The Department shall notify City/Town of its determination within ten (10) calendar days. No initial audit or desk review contact may occur between City/Town and a taxpayer until the Department approves the audit or desk review notice. September 2023 Page 13 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (e) In the case of taxpayers doing business in more than one (1) Arizona municipality: (1) City/Town may request the Department conduct an audit or desk review of a taxpayer having locations in two (2) or more Arizona municipalities and whose primary business is subject to both Municipal Taxes and State Taxes. (2) City/Town may request authorization from the Department for City/Town to conduct an audit or desk review of a taxpayer having locations in two (2) or more Arizona municipalities and whose primary business is subject to both Municipal Taxes and State Taxes. (3) Requests pursuant to (e)(1) or (e)(2) shall be made using the Department's Field Audit Request Form or the Desk Review Approval Excel Sheet, as appropriate. The Department shall notify City/Town of its decision regarding the request within ten (10) calendar days of receipt of the request. (f} The Department may deny, in writing, City/Town's request for the Department to conduct an audit or desk review within ten (10) calendar days of receiving the request for any of the following reasons: (1) An audit or desk review is already in process or is scheduled or planned for the taxpayer within six (6) months of the request; (2) The requested audit or desk review would interfere with strategic tax administration planning; (3) The audit or desk review selection is discriminatory, an abuse of process, or poses other similar defects; (4) The request lacks sufficient information for the Department to determine whether it is appropriate; (5) The Taxpayer was audited within the previous two (2) years; (6) The Department lacks sufficient resources to conduct the audit or desk review; (7) The scope or subject of the audit or desk review does not justify the use of Department resources. (g) If the Department denies a request to conduct an audit or desk review for the reasons provided in (f)(6) or (f)(7), and the audit or desk review is not for a taxpayer that only has a business location in City/Town, then City/Town may request to conduct the audit or desk review itself under the September 2023 Page 14 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration supervision of the Department. No initial audit or desk review contact may occur between City/Town and a taxpayer until City/Town receives written Department approval. (h) Any decision by the Department denying City/Town's request to conduct any audit or desk review may be referred to SMART in accordance with Section 15 of this Agreement. (i) All audits or desk reviews conducted by City/Town shall be in accordance with standard audit procedures defined in the Department audit manual and the Standard Audit Life Cycle Process Map. All auditors and desk reviewers shall be trained in accordance with Section 5.1 of this Agreement. (j) The Department may appoint a Department manager to supervise any audit or desk review conducted by City/Town. (k) All audits shall include all taxing jurisdictions in the State regardless of which jurisdiction's auditors participate in the audit. All desk reviews must include all taxing jurisdictions for which there is information provided by the taxpayer. (1) The Department shall issue all audit or desk review assessments on behalf of all affected taxing jurisdictions in a single notice to the taxpayer. (m) The Department shall issue amendments to audit or desk review assessments on behalf of all affected taxing jurisdictions in a single notice to the taxpayer. 5.4 Claims for Refund: (a) When a taxpayer files a request for refund, including refunds requested by filing amended returns, the Department shall process the request and review it for mathematical errors or for the failure of the taxpayer to properly compute the tax based on the taxable income reported on the return or refund request. (b) The Department shall notify City/Town of all refund requests that are reviewed and approved involving City/Town's Municipal Taxes within thirty (30) calendar days of processing the refund. City/Town may request an audit of the taxpayer as set forth in Section 5.3 of this Agreement. (c) The Department may assign a Department auditor to review requests for refunds. The Department shall notify City/Town of all refunds under review by an auditor pertaining to a taxpayer who engages in business within City/Town within thirty (30) calendar days of initiating the review and may request that City/Town assist with such reviews, with acceptance of such request at the discretion of City/Town. The Department may assign a refund request to a City/Town for review, with acceptance of such assignment at September 2023 Page 15 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration the discretion of City/Town. The Department may only assign refund requests to City/Town if taxes paid to City/Town are included in the refund request. (d) City/Town is responsible for payment of all amounts to be refunded to taxpayers for Municipal Tax incorrectly paid to City/Town. The Department may offset a remittance to City/Town under this Agreement to cover the amounts of allowed Municipal Tax refunds paid by the Department. (e) The Department shall issue refund approvals/denials on behalf of all taxing jurisdictions in a single notice to the taxpayer. City/Town may request copies of such determinations. 5.5 Protests: Taxpayer protests of audit assessments, desk review assessments, and refund denials shall be directed to the Department. Protests of audit assessments, desk review assessments, and refund denials shall be administered pursuant to A.R.S. Title 42, Chapter 1, Article 6. The Department shall notify City/Town of any protests within thirty (30) calendar days of receipt of the protest. 5.6 Status Reports: The Department shall keep all Arizona municipalities apprised of the status of each protested matter involving the imposition of Municipal Taxes. City/Town may request to be on a distribution list for monthly status reports by contacting City Services at citiesunit a.azdor.gov. 6. Voluntary Disclosure Aereements The Department may enter into a Voluntary Disclosure Agreement with a taxpayer. A Voluntary Disclosure Agreement may limit the years subject to audit and waive penalties. If the taxpayer discloses to the Department that it owes Municipal Taxes to City/Town, the Department shall notify City/Town of the Department's intent to enter into a Voluntary Disclosure Agreement and the Department shall provide the taxpayer's identity within thirty (30) calendar days of the identity being disclosed to Department. City/Town may subsequently request an audit of a taxpayer subject to a Voluntary Disclosure Agreement pursuant to Section 5.3 of this Agreement. 7. License Compliance 7.1 License Issuance and Renewal: The Department shall issue new municipal privilege tax licenses and shall annually renew such licenses for City/Town Municipal Tax. The Department shall provide City/Town with information about all persons obtaining and renewing municipal privilege tax licenses as set forth in Appendix B of this Agreement. 7.2 License Checks: The Department and City/Town shall coordinate efforts to conduct mutual tax license compliance checks through canvassing and other compliance methods. September 2023 Page 16 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 7.3 Confidentiality: Any tax license information City/Town obtains from the Department is confidential and may only be disclosed as authorized by A.R.S. § 42-2003. Any tax license information City/Town obtains through its own efforts may be disclosed as allowed by City/Town ordinance or policy. 7.4 Changes to License Fees: Within ten (10) business days following the adoption of an ordinance (or official acknowledgment of an ordinance approved by voters in an election) creating or modifying a municipal privilege tax license fee, one (1) copy of the ordinance and notification of the effective date of such ordinance shall be sent to City Services at citiesunit(a.Agdor.gov. The Department shall not be obligated to begin collection of the new or modified tax license fee any sooner than sixty (60) calendar days after the date the Department received the ordinance from City/Town. 8. Closing Agreements The Department shall notify City/Town before entering into a Closing Agreement and shall seek a range of settlement authority from City/Town related to the tax levied and imposed by City/Town in accordance with the Standard Audit Life Cycle Process. 9. Responsibility for Representation in Litigation 9.1 Administrative Proceedings: Pursuant to A.R.S. § 42-6002, the Department shall coordinate the litigation and defense of assessments and refund denials in any administrative appeals before the Office of Administrative Hearings or the Director of the Department regardless of the jurisdiction that conducted the audit, desk review, or refund review in accordance with the Standard Audit Life Cycle Process Map. The Department shall diligently defend the interests of City/Town and City/Town shall assist the Department in such representation as requested by either party. 9.2 Further Appeals: The Arizona Attorney General is responsible for defending the assessment or refund denial at the Board of Tax Appeals, the Arizona Tax Court, and all higher courts. City/Town shall assist the Attorney General in such representation and litigation as requested by the Attorney General's Office in accordance with the Standard Audit Life Cycle Process Map. 9.3 Mutual Cooperation: The Department and City/Town agree they shall cooperate in the appeal and litigation processes and shall ensure their auditors, desk reviewers, supervisors, and other necessary employees are available to assist the Department and the Attorney General through informal interviews, providing documents and records, preparing for depositions, attending depositions and trial as witnesses, and assisting in trial/hearing preparation, as needed. 9.4 Administrative Decisions: The Department shall provide a copy of all administrative hearing level decisions regarding State Taxes and Municipal Taxes, including Director's decisions issued by the Department, to City/Town within ten (10) business days after issuance of the decision if City/Town requests to be September 2023 Page 17 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration included on a distribution list created by the Department for the purposes of disseminating such decisions. City/Town may request to be on the distribution list by contacting City Services at citiesunit@azdor.gov. Administrative decisions contain Tax Information and must be stored and destroyed in accordance with the Confidentiality Standards (Appendix A). 10. Collection of Municipal Taxes 10.1 Tax Returns: Taxpayers who are subject to City/Town Municipal Taxes are required to pay such taxes to the Department utilizing a form prescribed by the Department. 10.2 Delinquent Tax Collections: Pursuant to A.R.S. § 42-6001, the Department shall collect any delinquent Municipal Tax imposed by City/Town recorded on the Department's tax accounting system. In the event this Agreement is terminated, the Department shall continue to collect delinquent Municipal Taxes recorded on the Department's accounting system on behalf of City/Town and distribute any such amounts collected to City/Town. 10.3 City/Town Assistance in Delinquent Tax Collections: To expand the Department's State Tax and Municipal Tax collection efforts by leveraging City/Town resources, City/Town may choose to provide collection efforts by deploying City/Town collectors to work in conjunction with the Department on the following terms: (a) Training: All City/Town collectors authorized to collect obligations in cooperation with the Department shall be trained in accordance with the policies of the Department. Training shall be provided in the same manner as set forth in Section 5.1 of this Agreement. (b) Conflict of Interest: A collector trained and authorized under this provision to perform collections activity shall not conduct any of the following prohibited acts: (1) Represent a taxpayer in any tax matter against the Department or City/Town while employed by City/Town. (2) Attempt to use his/her official position to secure any valuable thing or valuable benefit for himself/herself or his/her family members. (3) Represent a taxpayer before the Department or City/Town concerning any matter in which he/she personally participated for a period of one (1) calendar year after he/she ends employment with City/Town. (4) Use information he/she acquires in the course of the official duties as a collector in a manner inconsistent with his/her official duties without prior written approval from the Department. September 2023 Page 18 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (5) For a period of one (1) calendar year after he/she ends employment with City/Town, work in the same firm as a person who represents a taxpayer against the Department or City/Town unless the firm institutes formal barriers to prevent any sharing of information between the trained collector and the remainder of the firm. (c) Revocation: The Department may revoke the authorization of City/Town or of any individual City/Town employee to collect obligations under this Section. A revocation determination may be subject to review by SMART upon request by the individual or City/Town. 10.4 State of Arizona Liquor License Affidavit: City/Town may request that the Department issue a liquor license affidavit. The Department shall respond to the request via secured e-mail to indicate the status of completion of the request with a note stating complete, in -process, or unable to complete. 10.5 Uncollectible/Discretionary Write-offs: The Department shall share the annual list of uncollectible/discretionary write-offs of City/Town's Municipal Taxes prior to the write-off event at the end of the fiscal year. City/Town shall have forty-five (45) calendar days to submit feedback. 10.6 Remittance: All amounts collected by the Department for City/Town's Municipal Taxes under this Agreement shall be remitted to City/Town weekly on the basis of actual collections. To the extent possible, the Department shall initiate the electronic payment by Noon on the Monday after the end of the week in which the collections were received by the Department. If the Monday falls on a holiday, payment will be initiated by Noon on the Tuesday after the end of the week in which the collections were received by the Department. Remittance shall be made in the form of immediately available funds transferred electronically to the bank account designated by City/Town. 10.7 Abatement: Pursuant to A.R.S. § 42-1004, the Department, with the approval of the Attorney General, may abate tax under certain circumstances including Municipal Taxes. During the ordinary course of business, the Department may determine that certain taxpayer accounts shall be closed or cancelled. The Department shall seek input from City/Town or SMART before abating Municipal Taxes or closing accounts with Municipal Taxes due. The Department may request a telephonic meeting of SMART if time or circumstances require immediate action. 10.8 Funds Owed to City/Town: At all times and under all circumstances, payments remitted by a taxpayer to the Department for City/Town Municipal Taxes shall be considered property of City/Town. The Department may not retain or fail to remit such funds to City/Town for any reason not specifically set forth in this Agreement including, but not limited to, during the course of a dispute between City/Town and the Department. September 2023 Page 19 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 10.9 Adjustments to Reported Taxes: If the Department determines that a payment remitted by a taxpayer incorrectly identifies the city or town to which the payment should be made, the Department may temporarily hold the payment until the distribution of the payment is corrected to ensure the appropriate city or town receives the payment. If a payment by the Department has been made to an incorrect City/Town, the Department and affected Arizona municipalities shall follow the Standard Inter -Jurisdictional Transfer Process Map. 10.10 Collection Reports: The Department shall keep all Arizona municipalities apprised of the status of every open case in a collection status involving the imposition of Municipal Taxes. City/Town may request to be on a distribution list for monthly status reports by contacting Cities Collections at c i tiescollection@azdor.gov. 11. Taxpayer Rulinss and Uniformity The Department shall be responsible for issuing the official responses to taxpayer ruling requests and requests for interpretation of the Model City Tax Code. City/Town acknowledges that pursuant to A.R.S. § 42-6005(B), when the state statutes and Model City Tax Code are the same and where the Department has issued written guidance, the Department's interpretation is binding on Arizona municipalities and interpretation of Model City Tax Code. The Department acknowledges that in all other situations, interpretation of the Model City Tax Code is the sole purview of Municipal Tax Code Commission or its designee. This Section is not intended to affect procedures for appeals and litigation as outlined in Section 5.5 and Section 9 of this Agreement. 12. Financing Collection of Taxes The costs incurred by the Department in administering this Agreement shall be financed through the State general fund appropriation to the Department. This provision does not relieve City/Town of any financial obligation imposed by statute. 13. Inter -Jurisdictional Transfers ("Ws") The Department shall administer Inter -Jurisdictional Transfers of Municipal Tax monies in accordance with the Standard Inter -Jurisdictional Transfer Process Map. The affected Arizona municipalities shall agree on any amounts to be transferred before notifying the Department of such amounts to be transferred under this Section. 14. Education and Outreach Efforts To further its focus on serving taxpayers and its commitment to funding Arizona's future through enhanced customer service, continuous improvement, and innovation, the Department is expanding its outreach and education program to connect with all citizens of Arizona by strategically working with taxpayer and industry groups, tax practitioners, and Arizona's municipalities to ensure consistent tax education is widely available. September 2023 Page 20 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration Any City/Town may further this mission, at its own expense, in providing education and outreach to taxpayers. Education and outreach programs and content shall be consistent with applicable law and the Department's written guidance. Increased education and outreach efforts undertaken by the Department and Arizona municipalities will ensure collaborative partnerships beneficial to both parties, emphasize an ongoing two-way exchange of information, enhance communication on issues of common interest, and promote cooperation in areas of overlapping special projects. Therefore, upon request, City/Town shall provide information to the Department concerning such education and outreach efforts. The Department shall implement an Ambassador Program, whereby the Department provides curriculum, structure, and support for education related to tax administration and compliance. City/Town shall be provided a standard work process when participating in Department -led educational events. 15. State & Municipal Audit Resolution "Team ("SMART") 15.1 Members: The SMART committee shall consist of four (4) primary (voting) members representing municipal taxing jurisdictions and four (4) primary (voting) members representing the Department. There shall also be two (2) alternate members representing each party, who are non -voting representatives unless required to vote due to the absence, recusal, or disqualification of a primary (voting) member. All primary and alternate members are required to attend all meetings unless excused. 15.2 Selection: The Director of the Department shall appoint Department employees to serve as primary and alternate members representing the Department. Arizona municipalities shall collectively appoint municipal employees to serve as primary and alternate members representing the Arizona municipalities. The members representing either party may be changed at any time following the standard work process agreed upon by both parties. 15.3 Meetings: SMART shall meet monthly unless there is no business to be conducted. Additional meetings can be scheduled as necessary to timely discuss issues presented. 15.4 Issues: The Department or City/Town may refer issues to SMART for resolution including but not limited to: (a) Decisions by the Department to not audit a taxpayer; (b) Amendments to Department audit procedures or manuals; (c) Closing Agreements or a range of settlement authority; (d) Abatement or account closure in collections; September 2023 Page 21 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (e) Suspension of disclosure of Tax Information to City/Town; (f) Disagreements regarding proposed changes to the process maps defined in Sections 1.19, 1.20, and 1.21 of this Agreement; (g) Revocation of collection authority; and (h) Other issues as authorized by the Director of the Department or agreed upon by the parties, subject to the limitations described in Section 29 of this Agreement. 15.5 Recommendations: SMART shall make recommendations to the Director of the Department or Director's designee. If the recommendation is approved by at least five (5) members of SMART, the Director shall accept the recommendation of SMART. If SMART cannot reach a recommendation agreeable to at least five (5) members of the group, the Director or Director's designee may act as they deem to be in the best interests of all parties. Notwithstanding the above, upon request by City/Town, the Director shall submit their decision to the Attorney General's Office for review. 15.6 Voting: Any voting member of the committee may request the vote be held by secret ballot. 15.7 Procedures: SMART shall develop procedures concerning the operation of the committee consistent with this Agreement. 16. Funding of Additional Auditors by City/Town 16.1 Funding: At the sole discretion of City/Town, City/Town may contribute funding to the Department to pay for additional auditors to assist the Department in the performance of audits of Municipal Tax owed to City/Town. Such additional auditors funded by City/Town shall at all times be deemed to be employees of the Department and under no circumstances shall be deemed to be employees or agents of City/Town. It is the Parties' intention that any City/Town funding provided pursuant to this Section shall be used to increase the resources and capabilities of the Department to perform Municipal Tax audits and not to subsidize or replace State funding required for audit and collection of taxes. 16.2 Use of Funds: City/Town funding for additional auditors under this Section shall be used to fund the auditors' salaries and related expenses and shall not be used to pay for Department office space, utilities, equipment, supplies, or similar kinds of overhead. 16.3 Pool of Funds: The Department may pool any City/Town funding with any other similar funding provided by other Arizona municipalities to pay for additional auditors dedicated to serving those jurisdictions. The Department shall separately account for such funds in its annual budget. September 2023 Page 22 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 16.4 Accounting: The Department shall provide an annual accounting to City/Town, by August 31 each year describing how City/Town funding was used during the prior fiscal year. 17. Satellite Offices for I)epartmcnt Auditors 17.1 Funding: City/Town, at its own expense and at its sole discretion, may provide one (1) or more satellite offices and associated amenities for use by Department employees to provide audit and/or customer service to taxpayers. Use of such facilities by Department employees shall be at the sole discretion of the Department. Nothing in this Section shall require the Department to make use of such facilities provided by City/Town. 17.2 Requirements: Any Department employee using a City/Town satellite office must meet reasonable requirements of City/Town related to the use of the facility. City/Town shall be responsible for notifying the Department of any concerns and the Department shall be responsible for taking appropriate actions to resolve those concerns. 17.3 Termination: Once a satellite office is established, City/Town shall provide at least one hundred eighty (180) calendar days' written notice to the Department prior to the termination or relocation of a satellite office. The Department may discontinue the use of a satellite office at any time upon notice to City/Town and shall promptly remove all Department property. 17.4 License: All requirements of City/Town and the Department related to the satellite office shall be outlined in a mutually acceptable form of license and subject to separate approval. 17.5 Workers' Compensation for Satellite Offices and Certain Site Visits: If employees of City/Town or Department are working at the facility of the other public agency pursuant to this Agreement, it is agreed that: (a) Each employee will be deemed an employee of both public agencies for the purposes of A.R.S. § 23-1022(D) and Arizona workers' compensation laws. (b) Each employee's primary employer (i.e., the State of Arizona for a Department employee, and City/Town for a City/Town employee or Independent Contractor) shall be solely liable for the payment of workers' compensation benefits. (c) Each public agency for which employees of City/Town or Department are working at the facility of the other public agency under this Agreement shall post a notice complying with A.R.S. § 23-1022(E). (d) In all circumstances other than as provided in the foregoing, nothing in this Agreement shall be construed to result in any person being the officer, September 2023 Page 23 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration agent, employee, or servant of either party when such person, absent this Agreement and the performance thereof, would not in law have such status. 18. Non -availability of Funds Every payment obligation of the Department and City/Town pursuant to this Agreement is conditioned upon the availability of funds appropriated or allocated for the payment of such obligation, except for the rendering of funds to City/Town paid by a taxpayer for Municipal Taxes or municipal privilege tax license fees of City/Town. If funds are not appropriated, allocated, and available, or if the appropriation is changed resulting in funds no longer being available for the continuance of this Agreement, this Agreement may be terminated at the end of the period for which funds are available. No liability shall accrue to the State or City/Town, as applicable, in the event this provision is exercised and the State or City/Town, as applicable, shall not be obligated or liable for any future payments or for any damages as a result of termination under this Section. The termination of this Agreement shall not entitle the Department to retain any Municipal Tax collected on behalf of City/Town pursuant to this Agreement. 19. Waiver Nothing in this Agreement should be interpreted as City/Town relinquishing its legal rights under the Arizona Constitution or other applicable law, nor that City/Town is conceding the administration and collection of its Municipal Tax is not of a local interest or should not be under local control. 20. Cancellation The requirements of A.R.S. § 38-511 apply to this Agreement. The Department or City/Town may cancel this Agreement, without penalty or further obligation, if any person significantly involved in initiating, negotiating, securing, drafting, or creating this Agreement on behalf of the Department or City/Town is, at any time while this Agreement or any extension is in effect, an employee, agent, or consultant of the other party with respect to the subject matter of this Agreement. The obligation of the Department to remit City/Town taxes shall survive cancellation. 21. Notice (a) When any Notice to City/Town is required under the terms of this Agreement, such Notice shall be sent by electronic correspondence to: (b) When any Notice to the Department is required under the terms of this Agreement, such Notice shall be sent by electronic correspondence to City Services at citiesunitna,azdor.gov. September 2023 Page 24 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 22. Non-discrimination ADOR and City/Town shall comply with Executive Order 2023-01, which prohibits discrimination based on race, color, sex, pregnancy, childbirth or medical conditions related to pregnancy or childbirth, political or religious affiliation or ideas, culture, creed, social origin or condition, genetic information, sexual orientation, gender identity or expression, national origin, ancestry, age, disability, military service or veteran status, or marital status, by persons performing state contracts or subcontracts. ADOR and City/Town also agree to comply with Executive Orders 2003-22 and 2009-09 as amended by Executive Order 2023-01, all other applicable State and Federal employment laws, rules, and regulations, including the Americans with Disabilities Act of 1990. ADOR and the City/Town shall also comply with Executive Order 2023-09 prohibiting race -based hair discrimination. 23. Compliance with Immigration Laws and A.R.S. 4 41-4401 23.1 The Department and City/Town shall comply with all Federal immigration laws and regulations relating to employees and warrants compliance with A.R.S. § 23- 214 which reads in part: "After December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the E-Verify program." 23.2 A breach of compliance with immigration laws and regulations shall be deemed a material breach of this Agreement and may be grounds for the immediate termination of this Agreement. 23.3 The Department and City/Town retain the legal right to confirm the authorized presence and work authorization of any employee who works under this Agreement to ensure the Department and City/Town are complying with the applicable Federal immigration laws and regulations, and State statutes as set forth above. 24. Audit of Records City/Town and the Department shall retain all data, books, and other records ("Records") relating to this Agreement for at least six (6) years (a) after termination of this Agreement, and (b) following each annual renewal thereof. All Records shall be subject to inspection by the Department at reasonable times. Upon request, the Department and City/Town shall produce any or all such records. This Agreement is subject to A.R.S. § 35-214 and A.R.S. § 35-215. 25. Amendments Any amendments to the enumerated provisions or Appendices A, B, and C of this Agreement must be executed in writing in accordance with the provisions of this September 2023 Page 25 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration Agreement. The Standard Process Maps described within certain enumerated provisions are not themselves part of this Agreement. 26. Mutual Cooperation In the event of a disagreement between the parties regarding the terms, provisions, and requirements of this Agreement, or in the event of the occurrence of any circumstances bearing upon or affecting this Agreement, parties hereby agree to mutually cooperate to resolve the said disagreement or deal with the said circumstance. 27. Arbitration To the extent required by A.R.S. § 12-1518 and as provided for in A.R.S. § 12-133, the parties agree to resolve any dispute arising out of this Agreement by arbitration. The parties agree that any lawsuit filed by City/Town relating to the issues outlined in Section 19 of this Agreement is not considered to be a dispute arising out of this Agreement. 28. In]plementation The implementation and execution of the provisions of this Agreement shall be the responsibility of the Director of the Department or his/her designee and the Mayor of City/Town, his/her designee, or another party with designated authority pursuant to applicable law or City/Town charter to act on behalf of City/Town. 29. Limitations Nothing in this Agreement shall be construed as limiting or expanding the statutory responsibilities of the parties in performing functions beyond those granted to them by law, or as requiring the parties to expend any sum in excess of their appropriations. 30. Duration 30.1 The term of this Agreement shall commence from the latest date as indicated in Section 33 of this Agreement and continue in force through December 31 st of the following calendar year unless canceled or terminated as provided herein. The term of this Agreement shall automatically be extended for successive one (1) year terms commencing on January 1 st and ending on December 31 st of each year thereafter unless canceled or terminated as provided herein. 30.2 Amendments to this Agreement that are negotiated and agreed to by a simple majority of the review committee referenced in Section 30.9 of this Agreement shall thereafter be executed by the parties hereto by a separate signed amendment and incorporated herein to be effective during the term of this Agreement and any extensions. 30.3 This Agreement may be canceled or terminated effective on December 31 st of any year by either party by providing written notice no later than sixty (60) calendar days prior to the expiration of the term then in effect. September 2023 Page 26 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 30.4 This Agreement shall expire on December 31 st of any year the Department is subject to sunset review by the legislature. Upon expiration, cancellation, or termination, any subsequent Agreement must be ratified through signature by both parties. 30.5 If State legislation enacted subsequent to the date of this Agreement substantially affects the performance of this Agreement by either party or substantially diminishes the benefits either party would receive under this Agreement, either party may then terminate this Agreement by giving at least thirty (30) calendar days' notice to the other party. The termination shall become effective immediately upon the expiration of the notice period unless otherwise agreed to by the parties. 30.6 Notwithstanding any provision to the contrary herein, both parties may by mutual agreement provide for the termination of this Agreement upon such terms and at such time as is mutually agreeable to them. 30.7 Any notice of termination shall be mailed and served on the other party in accordance with Section 21 of this Agreement. 30.8 In the event of a partial or complete termination of this Agreement, if the parties have shared or exchanged property the parties will return the property to its original owner or dispose of it in a manner required by the original owner as described in this Agreement. 30.9 During the term of this Agreement, the terms and conditions of this Agreement shall undergo an annual review to be initiated no later than June 1 st of each year. The review shall be performed by a committee made up of equal parts representatives of the Department and representatives of the municipal taxing jurisdictions entering into an IGA with the Department for the administration and collection of Municipal Taxes. 31. Choice of Law The laws and regulations of the State of Arizona shall govern the rights of the parties, the performance of this Agreement, and any disputes arising from this Agreement. 32. Entire Agreement This document, including the specific appendices attached hereto, and any approved subcontracts, amendments, and modifications made thereto, shall constitute the entire Agreement between the parties and shall supersede all other understandings, oral or written. 33. Signature Authority September 2023 Page 27 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 33.1 By signing below, the signer certifies he or she has the authority to enter into this Agreement on behalf of his or her respective party, and he or she has read the foregoing and agrees to accept the provisions herein on said parry's behalf. 33.2 This Agreement may be executed in counterpart. For the Department: For Citv/Town: Signature Date Signature Date Robert Woods, Director Ed Honea, Mayor Typed Name and Title Typed Name and Title Arizona Department of Revenue Town of Marana Entity Name Entity Name 1600 W. Monroe St. 11555 W. Civic Center Drive Address Address Phoenix Arizona 85007 Marana AZ 85653 City State Zip City State Zip RESERVED FOR THE ATTORNEY GENERAL: RESERVED FOR CITY/TOWN ATTORNEY: This agreement between public agencies has been This agreement between public agencies has been reviewed pursuant to A.R.S. § 11-952 by the undersigned reviewed pursuant to A.R.S. § 11-952 by the undersigned Assistant Attorney General who has determined that it is City/Town Attorney who has determined, on behalf of the in proper form and is within the powers and authority City/Town only, that it is in proper form and is within the granted under the laws of the State of Arizona to the powers and authority granted under the laws of the State Arizona Department of Revenue represented by the of Arizona to the City/Town. Attorney General. KRIS MAYES APPROVED AS TO FORM AND AUTHORITY: The Attorney General BY: Signature BY: Assistant Attorney General CITY/TOWN ATTORNEY Date: Date: September 2023 Page 28 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration APPENDIX A ARIZONA DEPARTMENT OF REVENUE CONFIDENTIALITY REQUIREMENTS Confidential Information 1.1 "Confidential Information" is defined in A.R.S. § 42-2001. Confidential Information may not be disclosed except as provided by statute. A.R.S. §§ 42-2001 through 42-2004. 1.2 "Tax Information" as defined in this Agreement is Confidential Information. 1.3 Disclosure of aggregated financial information. Under no circumstance shall aggregated financial information related to transaction privilege taxes allow any person who is not authorized to receive Tax Information to identify or discover the financial information of an individual taxpayer. (a) Except as provided in Section 1.3(b) of this Appendix, City/Town will disclose aggregated financial information in accordance with the Department's standard: (1) City/Town shall only disclose aggregated financial information from not less than ten (10) taxpayers within the political boundaries of City/Town. (2) No individual taxpayer's financial information should be discernible due to its relative size compared to other members of the aggregated group. For example, if one of the taxpayers in the data set represents 90% or more of the data point, then that data point must not be disclosed, regardless of the number of taxpayers. (b) City/Town may disclose its aggregated financial information from less than ten (10) taxpayers provided City/Town first determines the aggregated data could not potentially reveal the financial information of an individual taxpayer. Such a determination shall take all the following into consideration: (1) Ownership. All taxpayers with common ownership entities shall be considered a single taxpayer for aggregation purposes; and (2) Proportionality. No individual taxpayer's financial information should be discernible due to its relative size compared to other members of the aggregated group; and September 2023 Page 29 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration (3) Any other factor that might allow any person who is not authorized to receive Tax Information to identify or discover the financial information of an individual taxpayer. 2. Protecting Information 2.1 City/Town must identify all places, both physical and logical, where City/Town receives, processes, and stores Tax Information and create a plan to adequately secure those areas. 2.2 Tax Information must be protected during transmission, storage, use, and destruction. City/Town must have written policies, standards, and procedures to document how it protects its information systems, including Tax Information so that it conforms to the State of Arizona statutes A.R.S. §§ 42-2001 through 42-2004 and policies, standards, and procedures found on the Arizona Strategic Enterprise Technology ("ASET") website at aset.az.gov/resources/policies-standards-and- procedures or ASET's successor agency or website and Arizona Department of Homeland Security's website at https://azdohs.gov/information-security-policies- standards-and-procedures. 2.3 Department staff and authorized City/Town staff are prohibited from inspecting Tax Information unless they have a business reason. Browsing through Tax Information concerning friends, neighbors, family members, or people in the news is strictly prohibited. 2.4 All removable media, including paper and CDs, containing Tax Information must be secured when not in use and after normal business hours by placing all materials in a locked drawer or cabinet. During use, Tax Information must be protected so that it is not visible to members of the public or anyone without a business need for the information. 2.5 All individuals accessing or storing Tax Information from an alternative work site must enter into a signed agreement that specifies how the Tax Information will be protected while at that site. Only trusted employees shall be permitted to access Tax Information from alternative sites. Tax Information may not be accessed while in public places such as restaurants, lounges, or pools. 2.6 Tax Information may not be discussed in elevators, restrooms, the cafeteria, or other public areas. Terminals should be placed in such a manner that prohibits public viewing of Tax Information. 2.7 When transporting confidential materials, the materials should be covered so that others cannot see the Tax Information. When sending Tax Information by fax, a cover sheet should always be used. 2.8 Any person with unsupervised access to Tax Information shall receive training on the confidentiality laws and requirements to protect such information before being given access to such information and annually thereafter. They must sign September 2023 Page 30 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration certificates after the training acknowledging that they understand their responsibilities. City/Town must keep records to document this training and certification and submit a copy of the certification to the Department. 3. Disclosure of Information 3.1 Tax Information may only be disclosed as permitted by A.R.S. § 42-2003. 3.2 Tax Information is protected by statute and, therefore, shall not be disclosed in response to a public records request except as authorized by law. A state agency, including political subdivisions (City/Town), may deny inspection of public records if the records are deemed confidential by statute. Berry v. State, 145 Ariz. 12, 13 699 P.2d 387, 388 (App. 1985). 3.3 A taxpayer may designate a person to whom Tax Information may be disclosed by completing an Arizona Department of Revenue Form 285 or Form 285B, or such other form that contains the authorizing information included in those forms. City/Town may contact the Department's Disclosure Officer at DiselosureOfficer@azdor.gov if there are any questions concerning this requirement. 4. Retention and Disposal of Information 4.1 All records received from the Department must be kept for the duration of the records retention period as listed in the official records retention schedules approved by the Secretary of State Library Archives and Public Records Division ("LAPR") published on the LAPR website. (a) The Department's custom records retention schedule is published on the LAPR website at apps.azlibrary.gov/records/schedules.aspx. (b) In the event of a legal hold (such as a litigation hold or investigative hold), Department and/or City/Town may be required to retain records beyond the retention period. 4.2 The Department and City/Town shall follow the legal requirements for reporting the disposition and destruction of records to the Arizona State Library Archives, & Public Records Division under A.R.S. § 41-151.19. Certificate of Records Destruction Forms are found at: azlibrary.gov/arm/forms. 4.3 All removable media containing Tax Information must be returned to the Department or sanitized before disposal or release from the control of City/Town. 4.4 Tax Information must be destroyed by shredding or burning the materials when the retention period has been met and no legal holds are in place. Tax Information may not be disposed of by placing the materials in the garbage or recycle bins. Destruction of Tax Information may be performed by a third -party vendor. September 2023 Page 31 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration City/Town must take appropriate actions to protect the Tax Information in transit and storage before it is destroyed, such as periodic inspections of the vendor. 4.5 Computer system components and devices, such as copiers and scanners, which have been used to store or process Tax Information may not be repurposed for non - tax administration uses unless the memory or hard drive of the device is sanitized to ensure under no circumstances Tax Information can be restored or recovered. 5. Information Security 5.1 Systems containing Tax Information must be protected in accordance with the State of Arizona Policies, Standards, and Procedures that govern State data found at htttps://azdohs.gov/information-security-policies-standards-and procedareS, particularly Policies and Standards 8000-8410 and the Arizona NIST Security Baseline Controls. 5.2 City/Town is responsible for creating architectural diagrams of any systems connecting to the Department's systems and depicting the flow of State Tax Information. Architectural diagrams for systems connecting to the ADOR shall be shared with the ADOR and updated after any architectural changes. 5.3 Incident Reporting. City/Town is required to notify the Department in the event of a suspected or actual unauthorized disclosure of Tax Information, data loss, breach, or other security concern regarding Tax Information by reporting the incident to the Department's: 1) City Services Manager by email at citiesunit@azdor.Qov, 2) Disclosure Officer by email at Disc losureOfficer n,azdor.gov, and 3) Chief Information Security Officer's Information Security Team by email at lnfoSec@azdor.gov. 5.4 The Department may send employees or auditors to inspect any of City/Town information systems and/or facilities used to process, store, or transmit any Department data at any time to ensure that Department information is adequately protected. City/Town shall provide audit records and evidence of system and application hardening to the department's information security team upon request. Hardening evidence can include, but is not limited to: RiskSense, CIS benchmarks, SCSEMs, STIGs, or other security best practices. If City/Town hires a third -party for any system or information support, all security provisions apply. 6. Wireless Access (if accessing, State Confidential Information from a wireless network) City/Town must: 6.1 Establish restrictions, configuration/connection requirements, and implementation guidance for wireless access. 6.2 Authorize wireless access to the information system prior to allowing such connections. September 2023 Page 32 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration 6.3 Employ a wireless intrusion detection system to identify rogue wireless devices and to detect attack attempts and potential compromises/breaches to the information system. 39 September 2023 Page 33 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration APPENDIX B REQUIRED REPORTS AND DATA FIELDS At a minimum, the Department of Revenue shall provide the following reports which display all of fields identified below, per report: NEW LICENSE REPORT and LICENSE UPDATE REPORT o Region Code o Run Date o Report Start Date o Report End Date o Update Date o ID Type o ID o Account ID o Entity Name o Ownership Type o License ID o OTO/Applied For indicator o Bankruptcy Indicator o Filing Frequency o Issue Date o Account Start Date o Business Start Date o Arizona Start Date o Doc Loc Nbr o Accounting Method o Close Date o Close Code o Business Description o NAICSI o NAICS2 o NAICS3 o NAICS4 o Mailing Streetl o Mailing Street2 o Mailing Street3 o Mailing City o Mailing State o Mailing ZIP o Mailing Country o Mailing Phone Number o Mailing Address Add date o Mailing Address End Date September 2023 Page 34 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration o Audit Streetl o Audit Street 2 o Audit Street 3 o Audit City o Audit State o Audit Zip o Audit Country o Audit Phone Number o Audit Address Add Date o Audit Address End Date o Location Code o Business Codes o Location Name (DBA) o Number of Units o Location Street 1 o Location Street 2 o Location Street 3 o Location City o Location State o Location Zip o Location Country o Location Phone Number o Location Start Date o Location End Date o Primary Location Street 1 o Primary Location Street 2 o Primary Location Street 3 o Primary Location City o Primary Location State o Primary Location Zip Code o Primary Location Country o Primary Location Phone Number o Primary Location Start Date o Primary Location End Date o Owner Name o Owner Title o Owner Name 2 o Owner Title 2 o Owner Name 3 o Owner Title 3 CITY PAYMENT JOURNAL o Run Date o Report Start Date o Report End Date o GL Accounting Period September 2023 Page 35 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration o Period End Date o Payment received date o Return received date o Payment process date o Return process date o Filing Frequency o License ID o Entity Name o Location Code o Location Name (DBA) o Location Street 1 o Location Street 2 o Location Street 3 o Location City o Location State o Location Zip o Location Country o NAICS o Business Code o Doc Loc Nbr o Pmt Loc Nbr o Gross Receipts o Total Deductions o Tax or Fee Collected o P & I Collected o Audit Collections o Tran Type o Tran Subtype o Rev Type CITY PAYMENT JOURNAL SUMMARY o Region Code o Run Date o Report Start Date o Report End Date o GL Accounting Period o Business Code o Number of Accounts o Collections NO MONEY REPORT o Region Code o GL Accounting Period o Period End Date o Payment received date o Return received date September 2023 Page 36 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration o Payment process date o Return process date o Filing Frequency o License ID o Entity Name o Location Code o Location Name (DBA) o Location Street 1 o Location Street 2 o Location Street 3 o Location City o Location State o Location Zip o Location Country o NAICS o Business Code o Doc Loc Nbr o Pmt Loc Nbr o Gross Receipts o Total Deductions o Tax or Fee Collected o P & I Collected o Audit Collections o Tran Type o Tran Subtype DEDUCTION REPORT o Region Code o Run Date o Report Start Date o Report End Date o GL Accounting Period o Period End Date o License ID o Entity Name o Location Code o Location Name (DBA) o Business Code o Doc Loc Nbr o Deduction Code o Deduction Amount o Tran Type o Tran Subtype o Rev Type September 2023 Page 37 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration FUND DISTRIBUTION REPORT o Region Code o Run Date o Report Start Date o Report End Date o GL Accounting Period o Period End Date o Payment Received Date o Return Received Date o Payment Processed Date o Return Processed Date o License ID o Entity Name o Location Code o Location Name (DBA) o Business Code o Doc Loc Nbr o Fund Allocation Code o Amount Distributed FUND DISTRIBUTION SUMMARY REPORT o Region Code o Run Date o Report Start Date o Report End Date o GL Accounting Period o Fund Allocation Code o Amount Distributed September 2023 Page 38 of 39 Exhibit A to Resolution No. 2023-116 ADOR-Municipal IGA for TPT Administration APPENDIX C REQUIRED FORMS JT-1 Joint Tax Application for a TPT License ADOR Form 10196 2. TPT-2 Transaction Privilege, Use and Severance Tax Return (filing periods beginning on or AFTER June 1, 2016) ADOR Form 11249 3. TPT-EZ Transaction Privilege, Use and Severance Tax Return ADOR Form 11263 September 2023 Page 39 of 39