On June 30, the Arizona Department of Revenue issued a draft Transaction Privilege Tax Ruling TPR 20-XX and the corresponding Transaction Privilege Tax Procedure TPP 20-XX. These tax rulings are the first step formalizing the procedure for late payment penalty abatement due to COVID-19. In the proposed ruling, the Department concludes that the severe impact of the COVID-19 pandemic, the statewide emergency declaration and other measures implemented by the state to protect public health, constitute a reasonable basis for business owners and operators’ inability to file or pay transaction privilege taxes, including county excise taxes and municipal privilege taxes remitted to the Department, in a timely manner. The Department also determined that taxpayers’ failure to timely file or pay does not stem from willful neglect. The draft procedure outlines the steps for filing Arizona Form 290 and requesting abatement, including verification that penalties have been assessed, that all returns have been filed and that payments have been made.

The Department is seeking public comment on the proposed ruling and procedure. Comments are due by July 13, 2020.

For more information, contact Pat Derdenger at pderdenger@lrrc.com or Karen Lowell at klowell@lrrc.com.

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