The Arizona Department of Revenue announced Tuesday it is working with its tax software vendor to automatically amend any filed 2021 individual income tax returns impacted by the recent overturning of Proposition 208.
The 3.5 percent surcharge on individual income over $250,000 ($500,000 married filing jointly) hit taxpayers starting in 2021, but last week a Maricopa County Superior Court judge struck down Prop 208 as unconstitutional.
Taxpayers who have already filed their Arizona individual income tax returns using current forms and instructions will not need to file an amended return, according to ADOR.
“The Department will hold these returns and process them correctly once it has modified its tax system to remove the surcharge and amend the tax bracket rates,” the statement reads. “At that time, ADOR will automatically adjust the returns to provide for the correct distribution of monies.”
The court ruling which voided Prop 208 will not, however, actually impact an individual’s overall tax liability. The reason, according to ADOR, is legislation signed into law last year by Gov. Doug Ducey which counteracted the surcharge by reducing the state’s top income tax rate for those subjected to the additional tax.
With the Prop 208 surcharge now dropped to 0 percent, the top income tax rate will return to 4.5 percent, ADOR noted.
“Arizona taxpayers will neither owe more tax nor receive a larger refund due to the voiding of the Prop 208 Surcharge,” the statement reads.
Taxpayers who have not yet filed a 2021 individual income tax return are reminded of Arizona’s April 18 filing deadline. ADOR is working as quickly as possible to revise the 2021 tax forms and adjusting the individual income tax brackets to the now proper rates.
State officials are also working with various tax software companies like TurboTax and H&R Block to ensure changes are made to those programs as well.
An effort to pass an emergency state law limiting what information can be disclosed about a child’s immunization records and to whom is expected to move forward in the State Senate this week.
The Arizona Department of Health Services has long utilized a Child Immunization Reporting System to collect, store, analyze, release and report immunization data. Identifying information in the system is confidential as per state law, while the federal Health Information Portability and Accountability Act (HIPAA) also addresses privacy standards for the electronic exchange of medical information.
The State has also approved Health Current, a non-profit, to serve as the health information exchange organization that connects more than 500 Arizona healthcare entities, including first responders, hospitals, labs and providers of community behavioral health, physical health, post-acute care, and hospice providers.
Senate Bill 1167 was introduced by Sen. T.J. Shope in January to allow Health Connect to “receive, use and redisclose confidential information regarding child immunizations and communicable diseases.” The bill initially passed the Senate’s Health & Human Services Committed last month with bipartisan support, but has received recent pushback.
Critics of the bill argue Health Connect should not be allowed to receive data from the Child Immunization Reporting System unless a parent or guardian specifically opts-in. There is also concern that the data could be used for inclusion in a federal vaccine database or to infringe upon the rights of individuals due to their vaccination status.
Senator Nancy Barto (R-LD15) proposed an amendment to Shope’s bill last Thursday to address those concerns. Her amendment failed, but Shope (R-LD8) then proposed his own amendment without a parental or guardian opt-in provision.
Shope’s amendment was adopted on the Senate Floor. The current language of SB1167 limits Health Connect’s use of confidential child immunization and communicable disease information “to only the purposes permitted by HIPAA privacy standards.”
In addition, the organization would be prohibited from “using or disclosing” identifying information from the childhood immunization reporting system for inclusion in a federal vaccine database. Health Connect would also be prohibited using or disclosing data “for any purpose that serves to discriminate against individuals based on their vaccination status.”
SB1167 would become law effective immediately upon the governor’s signature due to the inclusion of an emergency provision that the legislation is necessary “to preserve the public peace, health or safety.” But to get there, SB1167 needs to clear the Senate and then the House by a two-thirds margin in both chambers.
Several healthcare organizations support SB1167, including Banner Health Arizona, United Healthcare Services, and the Arizona Hospital & Healthcare Association.
The Arizona Court of Appeals will be asked to overturn a decision by the Arizona Department of Gaming which denied the state’s longest operating professional horse racing company a sports wagering license, AZ Free News has confirmed.
TP Racing LLLP, dba as Turf Paradise, contends the future of horse racing in Arizona is at risk if the company cannot securean Event Wagering Operator (EWO) License from the Arizona Department of Gaming.
Last month Judge Daniel J. Kiley of the Maricopa County Superior Court upheld the Department of Gaming’sdetermination that Turf Paradise in Phoenix did not meet the criteria of “an Arizona professional sports franchise” under the state’s new sports betting law. The company filed a notice of appeal with the Arizona Court of Appeals on March 8.
The criteria to obtain a EWO license requires an applicant to be either the owner of an Arizona professional sports team “or franchise,” an Arizona Indian tribe, or the operator of an in-state NASCAR race or PGA Tour event. The definition of a sports team or franchise as it pertains to the license is one which is “conducted at the highest level league or organizational play for its respective sport.”
The law then lists specific sports: baseball, basketball, football, golf, hockey, motorsports, and soccer.
Officials with the Department of Gaming rejected Turf Paradise’s argument last year that it was a sports franchise and that the Arizona Legislature had an opportunity to specifically exclude horse racing from eligibility for an EWO license if that the lawmakers’ intent. The department’s determination was backed up by an Arizona Administrative Law Judge who concurred Turf Paradise did not meet the criteria under current law.
TP Racing LLLP then appealed to superior court. A statement by the company at that time noted the facility “has been one of the premier destination racetracks for the highest-level professional thoroughbred and quarter horse racing in the nation” since 1956.
“By denying Turf Paradise’s license application while permitting others to operate sports betting throughout the State, the Department is threatening the very existence of the horse racing industry in Arizona,” the statement said.
However, Kiley’s Feb. 14 under advisement ruling noted Turf Paradise simply does not meet any of the relevant definitions written into the state’s current gaming law. The company must now follow-up its notice of appeal with formal opening appellate brief, after which the Department of Gaming will file an answer.
The appeals process could take months. However, court records show there is a more immediate option for resolving the EWO criteria dispute – the Arizona Legislature could amend the gaming statute to include horse racing facilities as a sports franchise.
Several Arizona legislators along with the Free Enterprise Club and the Goldwater Institute are celebrating a major court victory for Arizona taxpayers after a Maricopa County Superior Court judge struck down the largest tax hike in state history on Friday.
Today, @maricopacounty Superior Court Judge John Hannah ruled against Prop 208, determining that the $$ raised from the tax would exceed the constitutional spending limit for education.
Judge John Hannah’s ruling bars enforcement of Proposition 208, which imposed a significant income tax surcharge on small-business owners and individuals making over $250,000 a year. Prop 208, also called the Invest in Education Act, was narrowly passed by voters in November 2020 and was immediately challenged in court on multiple grounds, including a conflict with Arizona’s Constitution.
Governor Doug Ducey called Hannah’s ruling “a win for Arizona taxpayers,” adding that it is marks “another step in undoing the damage of Prop 208 and making sure we continue to benefit from having the lowest flat income tax rate in the nation.”
The Goldwater Institute-sponsored lawsuit was filed in February 2021 on behalf of numerous taxpayers, small business owners, and legislators. Last summer, the Arizona Supreme Court agreed with the plaintiffs’ argument that the surcharge taxes from Prop 208 were considered “local revenues” subject to spending limits under the state’s Constitution. The Justices sent the case back Hannah for a determination of whether Prop 208’s Local Revenues Provision runs afoul of the Constitution’s Education Expenditure Clause by violating that limitation. In a decision today, the judge agreed that Proposition 208 violated the Constitution.
“This Court understands the remand order as a direction to declare Proposition 208 unconstitutional in its entirety, and to enjoin its operation permanently, if the Court finds as a fact that the annual education spending limits imposed by the Arizona Constitution will prevent Arizona’s public schools from spending a ‘material’ amount of Proposition 208 tax revenue in 2023,” Hannah wrote in his ruling. “On that basis, the Court is obligated to strike down Proposition 208.”
Reaction to the ruling came swiftly, despite a possibility the Justices may be asked by the losing parties to review Hannah’s order later this year.
“While we expect the ruling may be appealed, we are confident the Arizona Supreme Court will find 208 unconstitutional, as they did last year. Arizona is – and will remain – a state that knows how to prioritize education while keeping taxes low and attracting jobs,” Gov. Ducey said.
Senate President Karen Fann, one of the plaintiffs, called Friday’s ruling “a major victory” against an initiative she said misled voters by trying to get the tax-and-spend hike around the Constitution.
“Out-of-state special interests tried to deceive our voters,” Fann said after Hannah released his ruling. “We are thrilled that this job-killing tax hike won’t go into effect.”
Many attributed the success of the lawsuit to the work of the Goldwater Institute which pointed out concerns with Prop 208’s constitutionality well before Election Day in 2020.
“Today’s decision puts a nail in the coffin of the unconstitutional, job-killing Proposition 208, and it cements Arizona’s position as the national leader in lower taxes and building a stronger economy,” said Victor Riches, President and CEO of the Goldwater Institute.
All 11 members of Arizona’s Congressional delegation have come together to ask President Joe Biden to approve a non-presidential state funeral when the last surviving Congressional Medal of Honor recipient from World War II passes away.
Hershel “Woody” Williams, who is 98, became the last living Medal of Honor recipient from World War II in April 2021. A state funeral would serve as a tribute to Williams’ heroic actions in battle as well as “each soldier that bravely fought for our country,” according to Rep. David Schweikert (AZ-06).
“The heroes from World War II deserve every honor our country can give them, and that includes paying our respects to the last surviving Medal of Honor recipient from this war when he dies,” Schweikert said Wednesday. “By doing this, our nation can offer a final honor and salute to Mr. Williams and the millions of American heroes from World War II.”
According to his biography, Williams served in the U.S. Marine Corps and took part in the Battle of Guam in 1944 and the Battle of Iwo Jima in 1945. It was for his heroism during the Battle of Iwo Jima that President Harry S. Truman would later present Williams with the Medal of Honor, the military’s highest decoration of valor, from for actions “above and beyond the call of duty.”
After the war, Williams went to work for the U.S. Department of Veterans Affairs as a counselor. He continued in the Marine Corps Reserve until 1969 and stayed with his VA job for more than three decades. The Navy warship USS Hershel “Woody” Williams was commissioned in March 2020.
Four Arizonans received the Medal of Honor for their actions during World War II: Captain Joseph Foss, U.S. Marine Corps; Private First Class Silveste Herrera, U.S. Army; Sergeant Manuel V. Mendoza, U.S. Army; and Sergeant Max Thompson, U.S. Army. https://avhof.org/inductees/medal-of-honor-recipients/
Also signing the letter to President Biden were Rep. Rep. Tom O’Halleran (AZ-01), Rep. Ann Kirkpatrick (AZ-02), Rep. Raúl Grijalva (AZ-03), Rep. Paul Gosar (AZ-04), Rep. Andy Biggs (AZ-05), Rep. Ruben Gallego (AZ-07), Rep. Debbie Lesko (AZ-08), and Rep. Greg Stanton (AZ-09). Arizona’s two U.S. Senators signed too.
