Arizona Bill Drops Communications Tax; Gives Licensing Board More Leeway
Arizona House Bill 2546 has two main parts that affect alarm companies conducting business in the state
Arizona House Bill 2546 has two main parts that affect alarm companies conducting business in the state, and the bill, signed into law on April 23, 2014, could have national significance as other states look on to see the results. Firstly, the Board of Technical Registration (BTR), which provides licenses to alarm company employees and contractors, will be given more discretion on allowing or denying licenses based on a person’s background and criminal history. Before the bill, BTR was required to deny a license based on a list of convictions and offenses regardless of time period, noted Roger D. Score, president of Arizona Alarm Dealers Association and owner of Tucson Alarm Company.
“This allows the Board to make decisions based on ‘good moral character and moral perpitude,’” explained Maria Malice, president of the Arizona Alarm Association and vice president of special projects for COPS Monitoring in the Scottsdale, Ariz., location. For example, according to Malice, if a contractor broke the law decades ago but has no further blemishes on his record, the licensing board can use its discretion on whether it would grant a license.
The initial draft of the bill, which was supported by the Arizona Alarm Dealers Association, intended to end the Board of Technical Registration’s authority to license alarm businesses and employees in Arizona completely, according to Score. Instead, after lobbying from competing association Arizona Alarm Association, the bill was amended with the current language.
The second section of the bill, which remained intact, affects alarm companies that offer monitoring services to their customers from a central station that is physically located in the state of Arizona. The bill eliminates the communications tax on monitoring, citing the 1953 Supreme Court of Arizona ruling, which determined that alarm monitoring is not a business of communication, but rather protection.
“This bill [clarifies] language, removes the burden of paying the communication tax, removes the burden of explaining the communication tax, and removes the unfair price advantage that out-of-state companies have not paying the tax,” Score said.
For alarm companies that monitor in Arizona, the eliminated tax could add up to significant savings. Each city has had a different communications tax amount, with Phoenix imposing a 4.7 percent tax and Tucson charging 2 percent.
As of April 23, 2014, the bill — sponsored by David Gowan, House Majority Leader in the Arizona State Legislature and State Senator David Farnsworth — was signed into law by Governor Jan Brewer, but will not take effect until January 2015.