Signed by Governor Doug Ducey

Vote Smart's Synopsis:

Vote to pass a bill that amends existing tax laws.

Highlights:

• Specifies an unemployed individual is eligible to receive benefits concerning any week only if the department finds that the individual (Sec. 3.A):

• Has registered for work at and thereafter has continued to report at an employment office following the regulations prescribed by the department;

• Has claimed benefits; and

• Can work.

• Requires the Department of Revenue to do the following to ensure program integrity (Sec. 6.A):

• Obtain current and actual employment and earned income information in real-time via verification services from external data sources, including third-party vendors, as part of the department's employment and earned income verification process to accurately determine an individual's eligibility for unemployment benefits;

• Verify the identity of an individual by incorporating an identity verification process that may include digital or physical identity authentication factors, or both, using external data sources, including third-party vendors; and

• Minimize erroneous communications to employers generated from fraudulent claim applications.

• Establishes the gross proceeds of sales or gross income derived from sales of the following categories of tangible personal property will be deducted from the tax base (Sec. 8-62.B):

• Machinery, or equipment, used directly in manufacturing, processing, fabricating, job printing, refining, or metallurgical operations. The terms "manufacturing", "processing", "fabricating", "job printing", "refining" and "metallurgical." "Metallurgical operations" include leaching, milling, precipitating, smelting, and refining; Mining machinery, or equipment, used directly in the process of extracting ores or minerals from the earth for commercial purposes, including equipment required to prepare the materials for extraction and handling, loading, or transporting such extracted material to the surface. "Mining" includes underground, surface, and open-pit operations for extracting ores and minerals;

• Tangible personal property sold to persons engaged in business classified under the telecommunications classification, including a person representing or working on behalf of such a person and consisting of central office switching equipment, switchboards, private branch exchange equipment, microwave radio equipment, and carrier equipment including optical fiber, coaxial cable, and other transmission media that are components of carrier systems; and

• Machinery, equipment, or transmission lines used directly in producing or transmitting electrical power, but not including distribution. Transformers and control equipment used at transmission substation sites constitute equipment used in producing or transmitting electrical power.

• Establishes gross proceeds of sales or gross income derived from the following will be deducted from the tax base for the retail classification (Sec. 8.I):

• Sales made directly to the United States government or its departments or agencies by a manufacturer, modifier, assembler, or repairer;

• Sales made directly to a manufacturer, modifier, assembler or repairer if such sales are of any ingredient or part of products sold directly to the United States government or its departments or agencies by the manufacturer, modifier, assembler, or repairer;

• Overhead materials or other tangible personal property that is used in performing a contract between the United States government and a manufacturer, modifier, assembler, or repairer, including property used in performing a subcontract with a government contractor who is a manufacturer, modifier, assembler, or repairer, to which title passes to the government under the terms of the contract or subcontract; and

• Sales of overhead materials or other tangible personal property to a manufacturer, modifier, assembler, or repairer if the gross proceeds of sales or gross income derived from the property by the manufacturer, modifier, assembler, or repairer will be exempt.

• Specifies the tax levied by this article does not apply to the storage, use, or consumption in this state of the following described tangible personal property (Sec. 9.A):

• Tangible personal property, sold in this state, the gross receipts from the sale of which are included in the measure of the tax imposed;

• Tangible personal property, the sale or use of which has already been subjected to an excise tax at a rate equal to or exceeding the tax imposed by this article under the laws of another state of the United States. If the excise tax imposed by the other state is at a rate less than the tax imposed by this article, the tax imposed by this article is reduced by the amount of the tax already imposed by the other state.

• Tangible personal property, the storage, use, or consumption of which the constitution or laws of the United States prohibit this state from taxing or to the extent that the rate, or imposition of tax is unconstitutional under the laws of the United States.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that amends existing tax laws.

Highlights:

• Specifies an unemployed individual is eligible to receive benefits concerning any week only if the department finds that the individual (Sec. 3.A):

• Has registered for work at and thereafter has continued to report at an employment office following the regulations prescribed by the department;

• Has claimed benefits; and

• Can work.

• Requires the Department of Revenue to do the following to ensure program integrity (Sec. 6.A):

• Obtain current and actual employment and earned income information in real-time via verification services from external data sources, including third-party vendors, as part of the department's employment and earned income verification process to accurately determine an individual's eligibility for unemployment benefits;

• Verify the identity of an individual by incorporating an identity verification process that may include digital or physical identity authentication factors, or both, using external data sources, including third-party vendors; and

• Minimize erroneous communications to employers generated from fraudulent claim applications.

• Establishes the gross proceeds of sales or gross income derived from sales of the following categories of tangible personal property will be deducted from the tax base (Sec. 8-62.B):

• Machinery, or equipment, used directly in manufacturing, processing, fabricating, job printing, refining, or metallurgical operations. The terms "manufacturing", "processing", "fabricating", "job printing", "refining" and "metallurgical." "Metallurgical operations" include leaching, milling, precipitating, smelting, and refining; Mining machinery, or equipment, used directly in the process of extracting ores or minerals from the earth for commercial purposes, including equipment required to prepare the materials for extraction and handling, loading, or transporting such extracted material to the surface. "Mining" includes underground, surface, and open-pit operations for extracting ores and minerals;

• Tangible personal property sold to persons engaged in business classified under the telecommunications classification, including a person representing or working on behalf of such a person and consisting of central office switching equipment, switchboards, private branch exchange equipment, microwave radio equipment, and carrier equipment including optical fiber, coaxial cable, and other transmission media that are components of carrier systems; and

• Machinery, equipment, or transmission lines used directly in producing or transmitting electrical power, but not including distribution. Transformers and control equipment used at transmission substation sites constitute equipment used in producing or transmitting electrical power.

• Establishes gross proceeds of sales or gross income derived from the following will be deducted from the tax base for the retail classification (Sec. 8.I):

• Sales made directly to the United States government or its departments or agencies by a manufacturer, modifier, assembler, or repairer;

• Sales made directly to a manufacturer, modifier, assembler or repairer if such sales are of any ingredient or part of products sold directly to the United States government or its departments or agencies by the manufacturer, modifier, assembler, or repairer;

• Overhead materials or other tangible personal property that is used in performing a contract between the United States government and a manufacturer, modifier, assembler, or repairer, including property used in performing a subcontract with a government contractor who is a manufacturer, modifier, assembler, or repairer, to which title passes to the government under the terms of the contract or subcontract; and

• Sales of overhead materials or other tangible personal property to a manufacturer, modifier, assembler, or repairer if the gross proceeds of sales or gross income derived from the property by the manufacturer, modifier, assembler, or repairer will be exempt.

• Specifies the tax levied by this article does not apply to the storage, use, or consumption in this state of the following described tangible personal property (Sec. 9.A):

• Tangible personal property, sold in this state, the gross receipts from the sale of which are included in the measure of the tax imposed;

• Tangible personal property, the sale or use of which has already been subjected to an excise tax at a rate equal to or exceeding the tax imposed by this article under the laws of another state of the United States. If the excise tax imposed by the other state is at a rate less than the tax imposed by this article, the tax imposed by this article is reduced by the amount of the tax already imposed by the other state.

• Tangible personal property, the storage, use, or consumption of which the constitution or laws of the United States prohibit this state from taxing or to the extent that the rate, or imposition of tax is unconstitutional under the laws of the United States.

Full Bill Text