Sec. 19-560. Erroneous payment of tax; credits and refunds; limitations.

   (a)   The tax collector may authorize either credits or payments of refunds for any taxes, penalties or interest paid in excess of the amount actually due. Any credit authorized by the tax collector shall be canceled from the accounts of the city if no timely filed request for credit or refund is made by the claimant claiming same within one (1) year following the date of determination and notice by the tax collector of the excess payment. For purposes of this section, "claimant" means a taxpayer that has paid a tax imposed under this article and has submitted a credit or refund claim under this section. Except where the taxpayer has granted a customer a power of attorney to pursue a credit or refund claim on the taxpayer's behalf, claimant does not include any customer of such taxpayer, whether or not the claimant collected the tax from customers by separately stated itemization.

   (b)   No credit shall be allowed or refund paid except under one of the following conditions:

   (1)   As provided in section 19-565.

   (2)   Upon examination of filed returns for any period not excluded by section 19-550 and not to exceed the tax, penalty, or interest actually paid with such returns.

   (3)   Upon audit or other examination of the books and records of the taxpayer but only for periods as provided in section 19-550. In the case of an examination performed at the taxpayer's request, credit shall be allowed or refund paid only for any taxes, penalties, or interest actually paid within the limitation period provided in section 19-550, such period to be calculated from the date of receipt of the taxpayer's request by the tax collector. Requests by taxpayers for audits to authorize credits shall be honored unless, in the opinion of the tax collector, the taxpayer has made excessive requests for audits.

   (4)   Upon the claimant's submission of a written claim for credit or refund of any taxes, penalties, or interest paid to the city by the claimant.

   (c)   A credit or refund claim submitted by a claimant pursuant to subsection (b)(4) of this section must:

   (1)   Identify the name, address and city tax identification number of the taxpayer;

   (2)   Identify the dollar amount of the credit or refund requested;

   (3)   Identify the specific tax period involved; and

   (4)   Identify the specific grounds upon which the claim is based.

   (d)   When a written claim for credit or refund is submitted pursuant to subsection (b)(4) of this section, no credit shall be allowed or refund paid except for those taxes, penalties, or interest paid in excess of the amount due within the limitation period provided in section 19-550. The credit or refund limitation period shall be calculated from the date the tax collector receives the claimant's written claim meeting the requirements of subsection (c) of this section.

   (e)   The following additional requirements apply to the tax collector and the claimant for claims for credit or refund submitted pursuant to subsection (b)(4) of this section:

   (1)   The tax collector shall notify the claimant that the claim for credit or refund has been received and shall indicate whether the claim meets the requirements of subsection (c) of this section. If the claim does not meet the requirements of subsection (c) of this section, the tax collector shall identify the deficiency in writing. Any claim that does not meet the requirements of subsection (c) of this section shall not secure the limitation period pursuant to section 19-550.

   (2)   The tax collector may request, in writing, additional information or documentation from the claimant to support the requested credit or refund. Such information or documentation must be reasonably related to the claim and required to be maintained under this chapter in the normal course of business.

   (A)   The claimant may request in writing one or more extensions to supply the requested information or documentation. The tax collector may reject an extension request only by denying the claim in whole or in part, subject to appeal by the claimant pursuant to section 19-570.

   (B)   Claimant aggrieved by a request for information or documentation under this subsection may file an appeal in the manner provided for in section 19-570 regarding the scope of the request for information or documentation. Such petition must be filed no later than the last day by which requested information or documentation must be provided to the tax collector, including any extensions. The decision of the Hearing Officer regarding a request for information or documentation may not be appealed by either party until the claim has been approved or denied, in whole or in part, under subsection (h) of this section or through subsections (e)(3) or (e)(4) of this section. A claimant shall not be barred from raising the issue of the reasonableness of the tax collector's information or documentation request in an appeal filed under subsection (h) of this section or through subsections (e)(3) or (e)(4) of this section through a lack of filing a petition under this subsection.

   (3)   If the tax collector fails to request additional information or documentation pursuant to this section and fails to issue a determination on any claim for credit or refund within six (6) months after the claim is filed, the claimant may consider the claim denied and may file an appeal pursuant to section 19-570.

   (4)   If the tax collector fails to issue a determination within six (6) months of receiving all requested additional information or documentation, the claimant may consider the claim for credit or refund denied and may file an appeal pursuant to section 19-570.

   (5)   The burden of proof to show that a notice, request, determination, or other communication was received by the claimant in this section is on the tax collector and will be satisfied by receipt of notice. The burden of proof to show that a claim or additional information or documentation was received by the tax collector is on the claimant and will be satisfied by receipt of notice.

   (f)   Interest shall be allowed on the overpayment of tax for any credit or refund authorized pursuant to subsections (b)(3) or (b)(4) of this section at the rate and in the manner set forth in section 19-540(a) as follows:

   (1)   For credits or refunds authorized pursuant to subsection (b)(3) of this section, interest shall be calculated from the date the tax collector receives the claimant's written claim following the date of notice to the claimant authorizing the credit or refund.

   (2)   For credits or refunds authorized pursuant to subsection (b)(4) of this section, interest shall be calculated from the date the tax collector receives the claimant's written claim meeting the requirements of subsection (c) of this section.

   (g)   The tax collector shall give the claimant a written notice of determination for a claim made under subsection (b) of this section. If the determination is a denial of a claim, in whole or in part, the determination must state that the claim for credit or refund has been denied in whole or in part, with the reason for denial, and must include the claimant's rights of appeal pursuant to section 19-570.

   (h)   A determination by the tax collector under this section, whether an approval of a claim or a denial of a claim, in whole or in part, shall become final forty-five (45) days from the date of receipt of the notice by the claimant, unless an appeal is made pursuant to section 19-570. If the claimant is the prevailing party in an appeal of a determination under this section, section 19-578 shall apply, except that reasonable fees and other costs may be awarded either by the hearing officer or court and are not subject to the monetary limitations of subsection 19-578(e) if the tax collector's position was not substantially justified or was brought for the purpose of harassing the claimant, frustrating the credit or refund process, or delaying the credit or refund. For the purposes of this section, "reasonable fees and other costs" means fees and other costs that are based on prevailing market rates for the kind and quality of the furnished services, not to exceed the amounts actually paid for expert witnesses, the cost of any study, analysis, report, test, project, or computer program that is found to be necessary to prepare the claimant's case and necessary fees for attorneys or other representatives.

   (i)   The amendments to this section as enacted in Ordinance No. 10287 shall be effective as follows:

   (1)   For any claim for refund or credit received by the tax collector before October 1, 2005:

   (A)   The provisions of this section as it existed prior to the adoption of Ordinance No. 10287 shall apply, except that interest shall be allowed from and after October 1, 2005, as provided in subsection (f) of this section.

   (B)   Except as noted in subsection (1)(A), the amendments to this section as enacted in Ordinance No. 10287 shall not be cited or considered in the construction or the interpretation of the city tax refund or credit provisions, interest provisions, or appeal provisions in effect prior to October 1, 2005.

   (2)   The provisions of this section enacted by Ordinance No. 10287 shall apply to all claims for refund or credit, for any periods as determined by subsections (d) or (e) of this section, received by the tax collector from and after October 1, 2005, except for claims that, in whole or in part, had been received by the collector prior to October 1, 2005.

   (j)   Any refund paid under the provisions of this section shall be paid from the privilege tax revenue accounts.

(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8784, § 19, 12-2-96; Ord. No. 10287, § 3, 6-13-06)

Sec. 19-565. Payment of tax by the incorrect taxpayer or to the incorrect Arizona city or town.

   (a)   When it is determined that taxes have been reported and paid to the city by the wrong taxpayer, any taxes erroneously paid shall be transferred by the city to the privilege tax account of the person who actually owes and should have paid such taxes, provided that the city receives an assignment and waiver signed by both the person who actually paid the tax and the person who should have paid the tax.

   (b)   An assignment and waiver provided under this section, must:

   (1)   Identify the name and city privilege license number of the person who erroneously paid the tax and the person who should have paid the tax.

   (2)   Provide that the person who erroneously paid the tax waives any right such person may have to a refund of the taxes erroneously paid.

   (3)   Authorize the city treasurer to transfer the erroneously paid tax to the privilege tax account of the person who should have paid the tax.

   (c)   When it is determined that taxes have been reported and paid to the wrong Arizona city or town, such taxes shall be remitted to the correct city or town, provided that the city or town to whom the taxes were erroneously paid receives an assignment and waiver signed by both the person who actually paid the tax and the person who should have paid the tax. Where the person who actually paid the tax and the person who should have paid the tax are one and the same, no assignment and waiver need be provided. The city shall neither pay nor charge any interest or penalty on any overpayment or underpayment except such interest and penalty actually paid by the taxpayer relating to such tax.

   (d)   This section in no way limits or restricts the applicability of any remedies which may otherwise be available under A.R.S. § 42-6003. The limitations and procedures set forth in A.R.S. § 42-6003 shall apply to all payments under this section.

   (e)   When reference is made in this section to this city or an Arizona city or town, and payments made to or requested from this city or an Arizona city or town, the provisions shall be applicable to the state department of revenue when it is acting for or on behalf of this city or an Arizona city or town.

(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8784, § 20, 12-2-96; Ord. No. 10361, § 13, 12-19-06)

Sec. 19-567. Reserved

   Editors Note: Ordinance No. 8784, § 21, adopted December 2, 1996, deleted § 19-567 in its entirety. Formerly, such section pertained to allocation of tax on retail sales when more than one Arizona city or town has nexus and derived from Ord. No. 6674, § 3, 3-23-87.

Sec. 19-570. Administrative review; petition for hearing or for redetermination; finality of order.

For the purposes of this section, municipal tax hearing office means the administrative offices of the municipal tax hearing officer.

   (a)   Informal conference. A taxpayer shall have the right to discuss any proposed assessment with the auditor prior to the issuance of any assessment, but any such informal conference is not required for the taxpayer to file a petition for administrative review.

   (b)   Administrative review.

   (1)   Filing a petition. Other than in the case of a jeopardy assessment, a taxpayer may contest the applicability or amount of any tax, penalty, or interest imposed upon or paid by him pursuant to this article by filing a petition for a hearing or for redetermination with the tax collector as set forth below:

   (A)   within forty-five (45) days of receipt by the taxpayer of notice of a determination by the tax collector that a tax, penalty, or interest amount is due, or that a request for refund or credit has been denied; or

   (B)   by voluntary payment of any contested amount when accompanied by a timely filed return and a petition requesting a refund of the protested portion of said payment; or

   (C)   by petition accompanying a timely filed return contesting an amount reported but not paid; or

   (D)   by petition requesting review of denial of waiver of penalty as provided in subsection 19-540(g).

   (2)   Extension to file a petition. In all cases, the taxpayer may request an extension from the tax collector. Such request must be in writing, state the reasons for the requested delay, and must be filed with the tax collector within the period allowed above for originally filing a petition. The tax collector shall allow a forty-five (45) day extension to file a petition when such written request has been properly and timely made by the taxpayer. The tax collector may grant an additional extension and may determine the corresponding time of any such extension at his sole discretion.

   (3)   Requirements for petition.

   (A)   The petition shall be in writing and shall set forth the reasons why any correction, abatement, or refund should be granted, and the amount of reduction or refund requested. The petition may be amended at any time prior to the time the taxpayer rests his case at the hearing or such time as the hearing officer allows for submitting of amendments in cases of redeterminations without hearings. The hearing officer may require that amendments be in writing, and in that case, he shall provide a reasonable period of time to file the amendment. The hearing officer shall provide a reasonable period of time for the tax collector to review and respond to the petition and to any written amendments.

   (B)   The taxpayer, as part of the petition, may request a hearing which shall be granted by the hearing officer. If no request for hearing is made the petition shall be considered to be submitted for decision by the hearing officer on the matters contained in the petition and in any reply made by the tax collector.

   (C)   The provisions of this section are exclusive, and no petition seeking any correction, abatement, or refund shall be considered unless the petition is timely and properly filed under this section.

   (4)   Transmittal to hearing officer. The city shall designate a hearing officer, who may be other than an employee of the city. The tax collector, if designated to receive petitions, shall forward any petition to the municipal tax hearing office (MTHO) within twenty (20) days after receipt, accompanied by documentation as to timeliness. In cases where the Hearing Officer determines that the petition is not timely or not in proper form, he shall notify both the taxpayer and the tax collector; and in cases of petitions not in proper form only, the hearing officer shall provide the taxpayer with an extension up to forty-five (45) days to correct the petition.

   (5)   Hearings shall be conducted by a hearing officer and shall be continuous until the hearing officer closes the record. The taxpayer may be heard in person or by his authorized representative at such hearing. Hearings shall be conducted informally as to the order of proceeding and presentation of evidence. The hearing officer shall admit evidence over hearsay objections where the offered evidence has substantial probative value and reliability. Further, copies of records and documents prepared in the ordinary course of business may be admitted, without objection as to foundation, but subject to argument as to weight, admissibility, and authenticity. Summary accounting records may be admitted subject to satisfactory proof of the reliability of the summaries. In all cases, the decision of the hearing officer shall be made solely upon substantial and reliable evidence. All expenses incurred in the hearing shall be paid by the party incurring the same.

   (6)   Redeterminations upon a "petition for redetermination" shall follow the same conditions, except that no oral hearing shall be held.

   (7)   Hearing ruling. In either case, the hearing officer shall issue his ruling not later than forty-five (45) days after the close of the record by the hearing officer.

   (8)   Notice of refund or adjusted assessment. Within sixty (60) days of the issuance of the hearing officer's decision, the tax collector shall issue to the taxpayer either a notice of refund or an adjusted assessment recalculated to conform to the hearing officer's decision.

   (c)   Stipulations that future tax is also protested. A taxpayer may enter into a stipulation with the tax collector that future taxes of similar nature are also at issue in any protest or appeal. However, unless such stipulation is made, it is presumed that the protest or appeal deals solely and exclusively with the tax specifically protested and no other. When a taxpayer enters into such a stipulation with the tax collector that future taxes of similar nature will be included in any redetermination, hearing, or court case, it is the burden of that taxpayer to identify, segregate, and keep record of such income or protested taxable amount in his books and records in the same manner as the taxpayer is required to segregate exempt income.

   (d)   When an assessment is final.

   (1)   If a request for administrative review and petition for hearing or redetermination of an assessment made by the tax collector is not filed within the period required by subsection (b) above, such person shall be deemed to have waived and abandoned the right to question the amount determined to be due and any tax, interest, or penalty determined to be due shall be final as provided in subsections 19-545(a) and 19-555(f).

   (2)   The decision made by the hearing officer upon administrative review by hearing or redetermination shall become final thirty (30) days after the taxpayer receives the notice of refund or adjusted assessment required by subsection (b)(8) above, unless the taxpayer appeals the order or decision in the manner provided in section 19-575.

   (e)   (Reserved).

(Ord. No. 6674, § 3, 3-23-87; Ord. No. 7446, § 2.14, 7-2-90; Ord. No. 8784, § 22, 12-2-96; Ord. No. 9569, § 3, 6-18-01; Ord. No. 10754, § 5, 1-20-10, eff. 7-1-08)

Sec. 19-571. Jeopardy assessments. (Reg. 571.1)

   (a)   If the tax collector believes that the collection of any assessment or deficiency of any amounts imposed by this article will be jeopardized by delay, he shall deliver to the taxpayer a notice of such finding and demand immediate payment of the tax or deficiency declared to be in jeopardy, including interest, penalties and additions.

   (b)   Jeopardy assessments are immediately due and payable, and the tax collector may immediately begin proceedings for collection. The taxpayer, however, may stay collection by filing, within ten (10) days after receipt of notice of jeopardy assessment, or within such additional time as the tax collector may allow, by bond or collateral in favor of the city in the amount tax collector declared to be in jeopardy in his notice.

   (c)   "Bond or collateral," as required by this section.

   (1)   Shall mean either:

   a.   A bond issued in favor of the city by a surety company authorized to transact business in this state and approved by the director of insurance as to solvency and responsibility; or

   b.   Collateral composed of securities or cash which are deposited with and kept in the custody of the tax collector.

   (2)   Shall be of such form that it may, at any time without notice, be applied to any tax, penalties or interest due and payable for the purposes of this article. Securities held as collateral by the tax collector must be of a nature that they may be sold at public or private sale without notice to the taxpayer.

   (d)   If bond or collateral is not filed within the period prescribed by subsection (b) above, the tax collector may treat the assessment as final for purposes of any collection proceedings. The taxpayer nevertheless shall be afforded the appeal rights provided in sections 19-570 and 19-575. The filing of a petition by the taxpayer under section 19-570, however, shall not stay the tax collector's rights to pursue any collection proceedings.

   (e)   If the taxpayer timely files sufficient bond or collateral, the jeopardy requirements are deemed satisfied; and the taxpayer may avail himself of the provisions of section 19-570, including requests for additional time to file a petition.

(Ord. No. 6674, § 3, 3-23-87; Ord. No. 6938, § 16, 4-25-88)

Sec. 19-572. Expedited review of jeopardy assessments.

   (a)   Within thirty (30) days after the date on which the tax collector furnishes the written notice required by section 19-571(a), the taxpayer, pursuant to section 19-570, may request the tax collector to review the action taken, within fifteen (15) days after the request for review, the tax collector shall determine whether both the jeopardy determination and the amount assessed are reasonable.

   (b)   Within thirty (30) days after the tax collector notifies the taxpayer of the determination he reached pursuant to subsection (a) above, the taxpayer may bring a civil action in the appropriate court. If the taxpayer so requests, the city shall stipulate to an accelerated and expedited resolution of the civil action. If the court determines that either the jeopardy determination or the amount assessed is unreasonable, the court may order the tax collector to abate the assessment, to redetermine any part of the amount assessed or to take such other action as the court finds to be appropriate. A determination made by the court under this subsection is final except as provided in A.R.S. section 12-170.

(Ord. No. 8784, § 23, 12-2-96)

Sec. 19-575. Judicial review.

   (a)   A taxpayer may seek judicial review of all or any part of a hearing officer's decision by initiating an action against the city in the appropriate court of this county. A taxpayer is not required to pay any tax, penalty or interest upheld by the hearing officer before seeking such judicial review.

   (b)   The tax collector may seek judicial review of all or any part of a hearing officer's decision by initiating an action in the appropriate court of this county.

   (c)   An action for judicial review can not be commenced by either the taxpayer or the tax collector more than thirty (30) days after receipt by the taxpayer of notice of any refund or assessment recalculated or reduced to conform to the hearing officer's decision, unless the time to commence such an action is extended in writing signed by both the taxpayer and the tax collector. Failure to bring the action within thirty (30) days or such other time as is agreed upon in writing shall constitute a waiver of any right to judicial review, except as provided in subsection (f) below.

   (d)   The court shall hear and determine the appeal as a trial de novo; however, the tax collector cannot raise in the court any grounds or basis for the assessment not asserted before the hearing officer. Nothing in this subsection, however, shall preclude the tax collector from responding to any arguments which are raised by the taxpayer in the appeal.

   (e)   The city has the burden of proof by a preponderance of the evidence in any court proceeding regarding any factual issue relevant to ascertaining the tax liability of a taxpayer. This subsection does not abrogate any requirement of this chapter that requires a taxpayer to substantiate an item of gross income, exclusion, exemption, deduction, or credit. this subsection applies to a factual issue if a preponderance of the evidence demonstrates that:

   (1)   The taxpayer asserts a reasonable dispute regarding the issue.

   (2)   The taxpayer has fully cooperated with the tax collector regarding the issue, including providing within a reasonable period of time, access to and inspection of all witnesses, information and documents within the taxpayer's control, as reasonably requested by the tax collector.

   (3)   The taxpayer has kept and maintained records as required by the city.

   (f)   The issuance of an adjusted or corrected assessment or notice of refund due to the taxpayer, where made by the tax collector pursuant to the decision of the hearing officer, shall not be deemed an acquiescence by the city or the tax collector in said decision, nor shall it constitute a bar or estoppel to the institution of an action or counterclaim by the city to recover any amounts claimed to be due to it by virtue of the original assessment.

   (g)   After the initiation of any action in the appropriate court by either party, the opposite party may file such counterclaim as would be allowed pursuant to the Arizona Rules of Civil Procedure.

(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8784, § 24, 12-2-96; Ord. No. 9322, § 13, 11-22-99)