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I.L • <br /> ('ITVUF PRESCOTT <br /> COUNCIL AGENDA MEMO <br /> MEETING DATE/TYPES: COMBINED WORKSHOP AND 12-2-14 <br /> REGULAR VOTING SESSION <br /> DEPARTMENT: Finance <br /> AGENDA ITEM: Adoption of Resolution No. 4261-1470 approving an Agreement with <br /> the Arizona Department of Revenue for performing municipal transaction privilege tax <br /> licensing services for Calendar Year 2015 (City Contract No. 2015-072) <br /> Approved By: Date: <br /> Director: Woodfill, Mark 10/31/2014 <br /> City Manager: McConnell, Craig gta; , !(_1�_ <br /> 1 <br /> Item Summary <br /> The "TPT Simplification" legislation HB 2111 (2013) and the technical corrections bill HB <br /> 2389 (2014) require that the Arizona Department of Revenue (DOR) provide a single <br /> point of administration for licensing, reporting , and paying both state and city taxes. The <br /> effective date of certain of these provisions has been delayed until January 1, 2016, to <br /> enable DOR to be capable of taking full control. A contract is needed for the Calendar <br /> Year 2015 due to the unique session law language that requires DOR to handle these <br /> licensing tasks. All eighteen (18) non-program cities, including Prescott, will continue to <br /> license and collect TPT from their taxpayers for one additional year. <br /> Background <br /> The Director, David Raber, announced in an open letter dated October 7, 2014 that the <br /> Department of Revenue needed to delay implementation of the TPT Simplification <br /> requirement to create a single online portal for licensing, reporting, and paying state and <br /> city sales taxes until January 1, 2016. Other aspects of the legislation are not delayed, <br /> including the changes to construction contracting and the centralized audit, appeal, and <br /> compliance duties. <br /> The ARS 42-5015 requires DOR systems to "capture data with sufficient specificity to <br /> meet the needs of all taxing jurisdictions." The level of detail required by the cities cannot <br /> be met with the current DOR tax system, namely, the location-based data elements. <br /> DOR will not be ready with the programming necessary for the additional level of detail, <br /> so the delay was deemed necessary. <br />