AZ HB2236

Amends Arizona Revised Statutes § 42-1122 to expand the tax refund setoff program to include political subdivisions (counties and incorporated cities and towns) alongside state agencies and courts.

Allows political subdivisions to submit debt information to the Department of Revenue by November 1 each year to offset taxpayer refunds against debts owed to those subdivisions.

Requires the Department of Revenue to match taxpayer information by at least two items of identification and notify political subdivisions of potential matches, with confirmation required within 45 days or the refund must be released.

Establishes the same notice, appeal, and reimbursement procedures for political subdivisions as exist for state agencies and courts, including penalties of 10-20% if refunds are intercepted in error depending on reimbursement timing.

Defines "political subdivision" as a county or an incorporated city or town in Arizona, and applies all existing setoff program requirements and limitations to political subdivisions participating in the program.