Arizona House Bill HB2818

Arizona 2025 Regular Session

• Introduced: 2/12/25

Caption

TPT; reporting; penalty

Impact

The effect of HB2818 is expected to standardize and potentially increase enforcement actions taken by the Arizona Department of Revenue. By streamlining penalty structures, the bill aims to discourage late filings and noncompliance among taxpayers. The preemptive nature of the penalties may lead to enhanced revenue collection for the state, but could also create a burden for taxpayers who encounter genuine difficulties in timely filing or payment.

Summary

House Bill 2818 amends Section 42-1125 of the Arizona Revised Statutes, focusing on civil penalties in tax administration. The bill significantly increases the penalties for taxpayers who fail to file or pay their taxes on time. The initial penalty for failing to make and file a return is set at four and one-half percent of the tax due for each month of delay, capping at a total of twenty-five percent maximum penalty. Additionally, specific further penalties are introduced for failures to furnish required information or for filing a frivolous return.

Contention

Notable points of contention surrounding the legislation include concerns from taxpayer advocacy groups over the fairness of imposing such stringent penalties, especially for those who may have reasonable causes for late filings. Opponents of the bill argue that these higher penalties disproportionately affect lower-income taxpayers and those operating small businesses, leading to increased financial strain and discouragement in administrative compliance.