STATE OF ARIZONA

STATE OF ARIZONA

2021 Tax Handbook

JLBC

Prepared by the Staff of the Joint Legislative Budget Committee

CONTENTS

Page No.

Foreword ..................................................................................................................................................................

i

Overview of Arizona Taxes .......................................................................................................................................

ii

GENERAL FUND

SALES AND USE TAXES

A. Transaction Privilege Tax...................................................................................................................................

1

B. Use Tax .............................................................................................................................................................. 36

C. Severance Tax on Metalliferous Minerals ......................................................................................................... 39

D. Jet Fuel Excise and Use Tax ............................................................................................................................... 41

INCOME TAXES A. Individual Income Tax........................................................................................................................................ 45 B. Corporate Income Tax ....................................................................................................................................... 88

APPENDIX A ? Renewable Energy Tax Incentives ..................................................................................................... 107 APPENDIX B ? Public and Private School Tax Credits................................................................................................ 113 APPENDIX C ? Statutory Ending Dates of Tax Credits............................................................................................... 115

PROPERTY TAXES ...................................................................................................................................................... 117

PAYMENTS IN LIEU OF PROPERTY TAXES A. In Lieu Tax on Private Railroad Car Companies ................................................................................................. 133 B. Voluntary Contributions by Districts ................................................................................................................. 135

LUXURY TAXES AND LICENSES A. Luxury Tax on Cigarettes and Tobacco .............................................................................................................. 137 B. Luxury Tax on Liquor ......................................................................................................................................... 144 C. Alcoholic Beverage License Fees ....................................................................................................................... 147

INSURANCE PREMIUM TAX ...................................................................................................................................... 155

OTHER GENERAL FUND REVENUE SOURCES A. Bingo License and Lieu Tax ................................................................................................................................ 163 B. Boulder Canyon Projects - In Lieu Payments ..................................................................................................... 165 C. Commercial Nuclear Generating Station Assessment ....................................................................................... 166 D. Gaming Fees..................................................................................................................................................................... 169 E. Unclaimed Property Collections ........................................................................................................................ 173

Contents

OTHER FUNDS

PAYMENTS IN LIEU OF PROPERTY TAXES A. Aircraft License Tax............................................................................................................................................ 179 B. Flight Property Tax ............................................................................................................................................ 182 C. Voluntary Contributions by the Game and Fish Commission............................................................................ 185 D. Watercraft Registration Fee .............................................................................................................................. 187 E. Government Property Lease Excise Tax ............................................................................................................ 190

HIGHWAY USER TAXES/FEES A. Highway User Revenue Fund Overview ............................................................................................................ 197 B. Motor Vehicle Fuel Tax...................................................................................................................................... 204 C. Use Fuel Tax....................................................................................................................................................... 207 D. Vehicle License Tax............................................................................................................................................ 209 E. Motor Carrier Fee .............................................................................................................................................. 216 F. Highway Safety Fee ........................................................................................................................................... 219

OTHER FUND REVENUE SOURCES A. Aviation Fuel Tax ............................................................................................................................................... 221 B. Hospital Assessment.......................................................................................................................................... 223 C. Insurance Guarantee Fund Assessments........................................................................................................... 227 D. Marijuana Excise Tax....................................................................................................................................................... 231 E. Pari-Mutuel Tax ................................................................................................................................................. 233 F. Telecommunications Services Excise Tax .......................................................................................................... 239 G. Tribal Gaming Contributions......................................................................................................................................... 241 H. Underground Storage Tank Tax......................................................................................................................... 245 I. Unemployment Insurance Tax........................................................................................................................... 250 J. Utility Corporation Assessments ....................................................................................................................... 259 K. Water Use Tax ................................................................................................................................................... 262 L. Workers' Compensation Insurance Premium Tax ............................................................................................. 264

APPENDIX D - Fiscal Impact of Statutory Tax Changes ............................................................................................. 267

Joint Legislative Budget Committee 1716 West Adams

Phoenix, Arizona 85007 Phone: (602) 926-5491 Email: jlbcwebmaster@ JLBC Website:

November 2021

FOREWORD

The 2021 Tax Handbook provides a description of each state tax and certain other revenue categories. The Handbook also includes a 20-year history of the collections and distributions for each revenue category, as well as summaries of all statutory revisions between the 2015 and 2021 legislative sessions. A listing of statutory changes prior to the 2015 legislative session is available on the Joint Legislative Budget Committee (JLBC) website located at . Appendix D provides the estimated dollar value of individual tax law changes enacted by the Legislature since FY 1989. The Tax Handbook includes tables that provide the estimated impact of tax credits and exemptions to the Sales Tax, Individual Income Tax, Corporate Income Tax, and Insurance Premium Tax sections. These tables were prepared by the Office of Economic Research and Analysis at the Arizona Department of Revenue. Each entry in the Tax Handbook includes the following sections (where applicable): ? Description ? a comprehensive narrative description of the tax or revenue source. ? Distribution ? a 20-year history of collections and a description of how the tax is distributed by fund or shared

with other jurisdictions such as cities and towns. ? Who Pays ? a description of who is legally responsible for the payment of the tax or fee. ? Revenue Base and Rate ? a definition of the tax base, a discussion of exemptions, if any, and a description of

the tax rate(s). ? Tax Refunds and/or Credits ? a description of circumstances under which tax refunds are made, and/or credits

are allowed. ? Payment Schedule ? due dates, delinquency dates, and payment schedules, as well as an explanation of how

the tax or fee is remitted to the state. ? Impact of Statutory Changes ? includes statutory changes from 2015 through 2021. As noted above, statutory

changes prior to 2015 are available on the JLBC website.

i

OVERVIEW OF ARIZONA TAXES

The revenues from Arizona's different taxes are deposited in a number of funds. The largest fund is the General Fund. In FY 2021, ongoing General Fund revenue was $14.9 billion. This amount excludes urban revenue sharing and one-time financing sources. While revenues from numerous taxes are deposited in the General Fund, 4 taxes constitute the bulk of General Fund collections: sales tax, individual income tax, corporate income tax, and insurance premium tax. In FY 2021, these 4 taxes represented 95.6% of ongoing General Fund revenue. As shown in the chart below, the largest category in FY 2021 was the sales tax tax, which represented 43.6% of General Fund revenue collections. After adjusting for the impact of the deferral of the tax-filing due date from April 15, 2020 to July 15, 2020, individual income tax, corporate income tax, and insurance premium tax represented 41.8%, 5.9%, and 4.3% respectively, of General Fund revenue.

The state levies many other taxes, fees, and assessments. Some of the other taxes generate sizable amounts of revenue, but their collections are not deposited in the General Fund. For example, the motor vehicle fuel tax generated $508 million in FY 2021 and the unemployment insurance tax generated $496 million. However, these collections were deposited in the Highway User Revenue Fund and the Unemployment Compensation Fund, respectively. This handbook provides a listing and description of the taxes levied by the State of Arizona. Additionally, it shows the amount of revenue collections and tax distributions by fund.

ii

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download