AZ Rev Stat § 42-1202 (2021)
2021 Arizona Revised Statutes|Title 42 - Taxation|§ 42-1202 - Surrender of property subject to levy; definition

42-1202.  Surrender of property subject to levy;  definition A. Except as otherwise provided in subsection B of this section,  any person in possession of,  or obligated with respect to,  property or rights to property subject to levy upon which a levy has been made shall,  upon demand of the department,  surrender such property or rights to property or discharge such obligation to the department,  except such part of the property or rights to property as is,  at the time of such demand,  subject to an attachment or execution under any judicial process. B. A levy on an organization with respect to a life insurance or endowment contract issued by such organization,  without necessity for the surrender of the contract document,  constitutes a demand by the department for payment of the amount described in this subsection and the exercise of the right of the person against whom the tax is assessed to the advance of such amount. Such organization shall pay over the amount within ninety days after service of notice of levy. The notice shall include a certification by the department that a copy of the notice has been mailed to the person against whom the tax is assessed at the person's last known address. The levy is deemed to be satisfied if such organization pays over to the department the amount which the person against whom the tax is assessed could have received from the organization on the date prescribed in this subsection for the satisfaction of the levy,  increased by the amount of any advance,  including contractual interest,  made to such person on or after the date the organization had actual notice or knowledge of the existence of the lien with respect to which the levy is made,  other than an advance,  including contractual interest,  made automatically to maintain the contract in force under an agreement entered into before the organization has such notice or knowledge. The satisfaction of a levy under this subsection is without prejudice to any civil action for the enforcement of any lien imposed by this chapter with respect to the contract. C. A person who fails or refuses to surrender any property or rights to property,  subject to levy,  upon demand by the department,  is liable in person and estate to this state in a sum equal to the value of the property or rights to property not so surrendered,  but not exceeding the amount of taxes for the collection of which such levy has been made,  with costs and interest on such sum at the rate determined pursuant to section 42-1123 from the date of such levy,  or,  in the case of a levy described in section 42-1201,  subsection E or F,  from the date such person would otherwise have been obligated to pay such amounts to the taxpayer. Any amount,  other than costs,  recovered under this subsection shall be credited against the tax liability for the collection of which the levy was made. D. A person in possession of or obligated with respect to property or rights to property subject to levy upon which a levy has been made who,  upon demand by the department,  surrenders the property or rights to property,  or discharges the obligation,  to the department or who pays a liability under subsection C of this section is discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from the surrender or payment. In the case of a levy which is satisfied pursuant to subsection B of this section,  the organization is also discharged from any obligation or liability to any beneficiary arising from such surrender or payment. E. As used in this section,  " person"  includes an officer or employee of a corporation,  an officer,  employee or elected official of this state or its political subdivisions,  or any agency or instrumentality of this state or its political subdivisions,  or a member or employee of a partnership,  who as such officer,  employee,  elected official or member is under a duty to surrender the property or rights to property,  or to discharge the obligation.