Assigned to FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR S.B. 1464
tax laws; interpretation; application; hearing
Purpose
Requires the Arizona Department of Revenue (ADOR) to notify the Legislature of a
proposed interpretation or application of tax law that will adversely affect taxpayers before the
new interpretation or application is adopted and allows the Legislature to hold hearings on the
proposed interpretation or application.
Background
ADOR administers and enforces statutes regarding taxation by: 1) formulating policies,
plans and programs to effectuate the missions and purposes of ADOR; 2) providing information
and advice within the scope of ADOR's duties; and 3) advising with and making recommendations
to the Governor and Legislature on all matters concerning ADOR's objectives.
ADOR may not apply any newly enacted law retroactively or in a manner that will penalize
a taxpayer for complying with prior law. If ADOR adopts a new interpretation or application of
any provision of tax law or determines that any of those provisions apply to a new or additional
category or type of taxpayer, and the change in interpretation or application is not due to a change
in the law: 1) the change in interpretation or application applies prospectively unless it is favorable
to taxpayers; 2) ADOR may not assess any tax, penalty or interest retroactively based on the
change in interpretation or application; and 3) the change is an affirmative defense in any
administrative or judicial action for retroactive assessment of tax, interest and penalties to taxable
periods before the new interpretation or application was adopted. New interpretation or
application includes policies and procedures adopted by administrative rule, tax ruling, tax
procedure or instructions to a tax return (A.R.S. ยงยง 42-1004 and 42-2078).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Requires ADOR, and allows an affected taxpayer, to notify the Chairpersons of the Senate
Finance Committee and the House of Representatives Ways and Means Committee, or their
successor committees, if a proposed new interpretation or application of any provision of tax
law will adversely affect taxpayers prospectively, before the new interpretation or application
is adopted.
2. Allows the Chairpersons of the Senate Finance Committee and the House of Representatives
Ways and Means Committee, or their successor committees, to hold a hearing on the proposed
new interpretation's or application's impact on taxpayers and recommend that ADOR adopt or
reject the proposed new interpretation or application. FACT SHEET
S.B. 1464
Page 2
3. Stipulates that, if the Legislature is notified of a proposal during the legislative session and a
hearing is not held within 60 days, the new interpretation or application takes effect.
4. Stipulates that, if the Legislature is notified of a proposal during the interim and a hearing is
not held within 60 days after the start of the next legislative session, the new interpretation or
application takes effect.
5. Makes conforming changes.
6. Becomes effective on the general effective date.
Prepared by Senate Research
February 6, 2025
MG/KP/ci