Lewis Roca Blog

The Arizona Court of Appeals held that state and local governments were categorically preempted from imposing property taxes on permanent improvements located on Tribal lands, regardless of the ownership of those improvements, reversing an earlier decision of the Arizona Tax Court.

The following update provides an overview of Arizona tax developments that occurred in 2020, with a focus on this past year’s tax legislation and court cases. We hope that you will find this annual compilation useful and interesting.

The following summarizes the latest news in the Southwest relating to state tax and the COVID-19 pandemic.

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.

As the COVID-19 pandemic continues, states are clarifying their position on certain tax relief provisions available to taxpayers. Additionally, taxpayers in the Southwest and nationwide should be aware that the July 15 extended filing deadline for 2019 corporate and personal income tax at the federal and state levels is rapidly approaching.

As stay-at-home orders and the economic fallout of the COVID-19 pandemic continue, states continue to update the tax relief available to taxpayers. The following summarizes the latest news in the Southwest.

In a Frequently Asked Questions (FAQs) issued on April 10, the IRS clarified the interaction between the employer relief provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the loan forgiveness provision for employers that receive a Paycheck Protection Program (PPP) loan.

Since the IRS announced that the due date for filing and payment of individual, corporate, and fiduciary income tax returns have been extended to July 15, 2020, the states have followed suit, including the Southwestern states that Lewis Roca Rothgerber Christie covers — Arizona, California, Colorado, Nevada, New Mexico, and Texas.  This alert will look at how these Southwestern states have implemented income tax relief and what relief these states have provided for sales tax and property tax filing and payment deadlines. This is current as of April 8 but States may take action after this date to provide tax relief.

Arizona’s speculative builder’s tax is a hidden real property transfer tax imposed by Arizona cities but is not imposed by the state. The speculative builder’s tax is a sales tax on the sale of “improved real property.” It is triggered for commercial buildings if the property is sold within 24 months of substantial completion.