Chapter
16
LICENSE,
PRIVILEGE AND EXCISE TAXES[1]
Art.
I. General Conditions and
Definitions, §§ 16-1—16-120
Art.
II. Determination of Gross
Income, §§ 16-200—16-290
Art.
IV. Privilege Taxes, §§
16-400—16-480
Art.
V. Administration, §§
16-500—16-597
Art.
III. Licensing and Recordkeeping,
§§ 16-300—16-370
Art.
VI. Use Tax, §§ 16-600—16-660
Art.
VII. Reserved
Art.
VIII. Reserved
ARTICLE
I. GENERAL CONDITIONS AND DEFINITIONS
Sec.
16-1. Words of tense, number and gender;
code references.
(a) For the purposes of this Chapter, all words
of tense, number, and gender shall comply with A.R.S. Section 1-214 as amended.
(b) For the purposes of this Chapter, all code
references, unless specified otherwise, shall:
(1) Refer to this City Code;
(2) Be deemed to include all amendments to such
code references.
(Ord. No. 87.17, § 1,
Sec.
16-100. General definitions.
For
the purposes of this Chapter, the following definitions apply:
Assembler means a person who unites or
combines products, wares, or articles of manufacture so as to produce a change
in form or substance of such items without changing or altering component
parts.
Broker means any person engaged or
continuing in business who acts for another for a consideration in the conduct
of a business activity taxable under this Chapter, and who receives for his
principal all or part of the gross income from the taxable activity.
Business means all activities or acts,
personal or corporate, engaged in and caused to be engaged in with the object
of gain, benefit, or advantage, either direct or indirect, but not casual
activities or sales.
Business day means any day of the week when
the Tax Collector's office is open for the public to conduct the Tax
Collector's business.
Casual activity or sale means a transaction of an
isolated nature made by a person who neither represents himself to be nor is
engaged in a business subject to a tax imposed by this Chapter. However, no sale, rental, license for use, or
lease transaction concerning real property nor any activity entered into by a
business taxable by this Chapter shall be treated, or be exempt, as
casual. This definition shall include
sales of used capital assets, provided that the volume and frequency of such
sales do not indicate that the seller regularly engages in selling such
property.
Combined taxes means the sum of all applicable
Arizona Transaction Privilege and Use Taxes; all applicable transportation
taxes imposed upon gross income by this County as authorized by Chapter 8.3,
Title 42, Arizona Revised Statutes; and all applicable taxes imposed by this
Chapter.
Commercial property is any real property, or portion
of such property, used for any purpose other than lodging or lodging space,
including structures built for lodging but used otherwise, such as model homes,
apartments used as offices, etc.
Communications channel means any line, wire, cable,
microwave, radio signal, light beam, telephone, telegraph, or any other
electromagnetic means of moving a message.
Construction contracting refers to the activity of a
construction contractor.
Construction contractor means a person who undertakes to
or offers to undertake to, or purports to have the capacity to undertake to, or
submits a bid to, or does himself or by or through others, construct, alter,
repair, add to, subtract from, improve, move, wreck, or demolish any building,
highway, road, railroad, excavation, or other structure, project, development,
or improvement to real property, or to do any part thereof. "Construction contractor" includes
subcontractors, specialty contractors, prime contractors, and any person
receiving consideration for the general supervision and/or coordination of such
a construction project except for
remediation contracting. This definition
shall govern without regard to whether or not the construction contractor is
acting in fulfillment of a contract.
Delivery (of notice) by the Tax
Collector means
"receipt (of notice) by the taxpayer".
Delivery, installation or other direct
customer services means
services or labor, excluding repair labor, provided by a taxpayer to or for his
customer at the time of transfer of tangible personal property; provided
further that the charge for such labor or service is separately billed to the
customer and maintained separately in the taxpayer's books and records.
Engaging, when used with reference to
engaging or continuing in business, includes the exercise of corporate or
franchise powers.
Equivalent excise tax means either:
(1) A
Privilege or Use Tax levied by another Arizona municipality upon the
transaction in question, and paid either to such Arizona municipality directly
or to the vendor; or
(2) An
excise tax levied by a political subdivision of a state other than Arizona upon
the transaction in question, and paid either to such jurisdiction directly or
to the vendor; or
(3) An
excise tax levied by a Native American Government organized under the laws of
the federal government upon the transaction in question, and paid either to
such jurisdiction directly or to the vendor.
Federal government means the United States
Government, its departments and agencies; but not including national banks or
federally chartered or insured banks, savings and loan institutions, or credit
unions.
Food means any items intended for human consumption as
defined by rules and regulations adopted by the Department of Revenue, State of
Hotel means any public or private
hotel, inn, hostelry, tourist home, house, motel, roominghouse, apartment
house, trailer, or other lodging place within the City offering lodging,
wherein the owner thereof, for compensation, furnishes lodging to any
transient, except foster homes, rest homes, sheltered care homes, nursing
homes, or primary health care facilities.
Jet fuel means jet fuel as defined in
A.R.S. Section 42-5351.
Job printing means the activity of copying or
reproducing an article by any means, process, or method. "Job
printing" includes engraving of printing plates, embossing, copying,
micrographics, and photo reproduction.
Lessee includes the equivalent person in
a rental or licensing agreement for all purposes of this Chapter.
Lessor includes the equivalent person in
a rental or licensing agreement for all purposes of this Chapter.
Licensing (for use) means any agreement between the
user ("licensee") and the owner or the owner's agent
("licensor") for the use of the licensor's property whereby the
licensor receives consideration, where such agreement does not qualify as a
"sale" or "lease" or "rental" agreement.
Lodging (lodging space) means any room or apartment in a
hotel or any other provider of rooms, trailer spaces, or other residential
dwelling spaces; or the furnishings or services and accommodations accompanying
the use and possession of said dwelling space, including storage or parking
space for the property of said tenant.
Manufactured buildings means a manufactured home,
mobile home or factory built building, as defined in A.R.S. Section 41-2142.
Manufacturer means a person engaged or
continuing in the business of fabricating, producing, or manufacturing products,
wares, or articles for use from other forms of tangible personal property,
imparting to such new forms, qualities, properties, and combinations.
Medical marijuana means "marijuana"
used for a "medical use" as those terms are defined in A.R.S. Section
36-2801.
Mining and metallurgical supplies means all tangible personal
property acquired by persons engaged in activities defined in subsection 16-432
for such use. This definition shall not include:
(1) Janitorial equipment and supplies.
(2) Office
equipment, office furniture, and office supplies.
(3) Motor
vehicles licensed for use upon the highways of the State.
Modifier means a person who reworks,
changes, or adds to products, wares, or articles of manufacture.
Nonprofit entity means any entity organized and
operated exclusively for charitable purposes, or operated by the Federal
Government, the State, or any political subdivision of the State.
Occupancy (of real property) means any occupancy or use, or
any right to occupy or use, real property including any improvements, rights,
or interests in such property.
Out-of-city sale means the sale of tangible
personal property and job printing if all of the following occur:
(1) Transference
of title and possession occur without the City; and
(2) The
stock from which such personal property was taken was not within the corporate
limits of the City; and
(3) The
order is received at a permanent business location of the seller located
outside the City; which location is used for the substantial and regular
conduct of such business sales activity.
In no event shall the place of business of the buyer be determinative of
the situs of the receipt of the order.
For the purpose of this definition it
does not matter that all other indicia of business occur within the City,
including, but not limited to, accounting, invoicing, payments, centralized
purchasing, and supply to out-of-city storehouses and out-of-city retail branch
outlets from a primary storehouse within the City.
Out-of-state sale means the sale of tangible
personal property and job printing if all of the following occur:
(1) The
order is placed from without the State of
(2) The
property is delivered to the buyer at a location outside the State; and
(3) The
property is purchased for use outside the State.
Owner-builder means an owner or lessor of real
property who, by himself or by or through others, constructs or has constructed
or reconstructs or has reconstructed any improvement to real property.
Person means an individual, firm,
partnership, joint venture, association, corporation, estate, trust, receiver,
syndicate, broker, the Federal Government, this State, or any political
subdivision or agency of this State. For
the purposes of this Chapter, a person shall be considered a distinct and
separate person from any general or limited partnership or joint venture or
other association with which such person is affiliated. A subsidiary corporation shall be considered
a separate person from its parent corporation for purposes of taxation of
transactions with its parent corporation.
Prosthetic means any of the following
tangible personal property if such items are prescribed or recommended by a
licensed podiatrist, chiropractor, dentist, physician or surgeon, naturopath,
optometrist, osteopathic physician or surgeon, psychologist, hearing aid
dispenser, physician assistant, nurse practitioner or veterinarian:
(1) Any
man-made device for support or replacement of a part of the body, or to
increase acuity of one of the senses.
Such items include: prescription eyeglasses; contact lenses; hearing
aids; artificial limbs or teeth; neck, back, arm, leg, or similar braces.
(2) Insulin,
insulin syringes, and glucose test strips sold with or without a prescription.
(3) Hospital
beds, crutches, wheelchairs, similar home health aids, or corrective shoes.
(4) Drugs or medicine, including oxygen.
(5) Equipment
used to generate, monitor, or provide health support systems, such as
respiratory equipment, oxygen concentrator, dialysis machine.
(6) Durable
medical equipment which has a federal health care financing administration
common procedure code, is designated reimbursable by Medicare, can withstand
repeated use, is primarily and customarily used to serve a medical purpose, is
generally not useful to a person in the absence of illness or injury and is
appropriate for use in the home.
(7) Under
no circumstances shall "prosthetic"
include medical marijuana regardless of whether it is sold or dispensed
pursuant to a prescription, recommendation, or written certification by any
authorized person.
Qualifying community health center means:
(1)
An entity that is recognized as
nonprofit under 501(c)(3) of the United States Internal Revenue Code, that is a
community-based, primary care clinic that has a community-based board of
directors and that is either:
(a) The sole provider of primary care in the
community.
(b) A nonhospital affiliated clinic that is located in a federally
designated medically underserved area in this state.
(2)
Includes clinics that are being
constructed as qualifying community health centers.
Qualifying health care organization
means an entity that is recognized as nonprofit under Section 501(c) of the
United States Internal Revenue Code and that uses at least eighty percent of
all monies that it receives from all sources each year only for health and
medical related educational and charitable services, as documented by annual
financial audits prepared by an independent certified public accountant,
performed according to generally accepted accounting standards and filed
annually with the Arizona Department of Revenue.
Qualifying hospital
means:
(1) A
licensed hospital which is organized and operated exclusively for charitable
purposes, no part of the net earnings of which inures to the benefit of any
private shareholder or individual.
(2) A
licensed nursing care institution or a licensed residential care institution or
a residential care facility operated in conjunction with a licensed nursing
care institution or a licensed kidney dialysis center, which provides medical
services, nursing services or health related services and is not used or held
for profit.
(3) A
hospital, nursing care institution or residential care institution which is
operated by the federal government, this State or a political subdivision of
this State.
Receipt (of notice) by the taxpayer means the earlier of actual
receipt or the first attempted delivery by certified United States mail to the
taxpayer's address of record with the Tax Collector.
Remediation means those actions that are
reasonable, necessary, cost-effective and technically feasible in the event of
the release or threat of release of hazardous substances into the environment
such that the waters of the state are or may be affected, such action as may be
necessary to monitor, assess and evaluate such release or threat of release,
actions of remediation, removal or disposal of hazardous substances or taking
such other actions as may be necessary to
prevent, minimize or mitigate
damage to the pubic health or welfare or to the waters of the state which may
otherwise result from a release or threat of release of a hazardous substance
that will or may affect the waters of the state. Remediation activities include the use of
biostimulation with indigenous microbes and bioaugmentation using microbes that
are nonpathogenic, nonopportunistic and that are naturally occurring. Remediation activities may include community
information and participation costs and providing an alternative drinking water
supply.
Rental equipment means tangible personal property
sold, rented, leased, or licensed to customers to the extent that the item is
actually used by the customer for rental, lease, or license to others; provided
that:
(1) The
vendee is regularly engaged in the business of renting, leasing, or licensing
such property for a consideration; and
(2) The
item so claimed as "rental equipment" is not used by the person
claiming the exemption for any purpose other than rental, lease, or license for
compensation, to an extent greater than fifteen percent (15%) of its actual
use.
Rental supply means an expendable or
nonexpendable repair or replacement part sold to become part of "rental
equipment", provided that:
(1) The
documentation relating to each purchased item so claimed specifically itemizes
to the vendor the actual item of "rental equipment" to which the
purchased item is intended to be attached as a repair or replacement part; and
(2) The
vendee is regularly engaged in the business of renting, leasing, or licensing
such property for a consideration; and
(3) The
item so claimed as "rental equipment" is not used by the person
claiming the exemption for any purpose other than rental, lease, or license for
compensation, to an extent greater than fifteen percent (15%) of its actual
use.
Repairer means a person who restores or
renews products, wares, or articles of manufacture.
Resides within the city means in cases other than
individuals, whose legal addresses are determinative of residence, the
engaging, continuing, or conducting of regular business activity within the
City.
Restaurant means any business activity where
articles of food, drink, or condiment are customarily prepared or served to patrons
for consumption on or off the premises, also including bars, cocktail lounges,
the dining rooms of hotels, and all caterers.
For the purposes of this Chapter, a "fast food" business,
which includes street vendors and mobile vendors selling in public areas or at
entertainment or sports or similar events, who prepares or sells food or drink
for consumption on or off the premises is considered a "restaurant",
and not a "retailer".
Retail sale (sale at retail) means the sale of tangible
personal property, except the sale of tangible person property to a person
regularly engaged in the business of selling such property.
Retailer means any person engaged or
continuing in the business of sales of tangible personal property at retail.
Solar daylighting means a device that is
specifically designed to capture and redirect the visible portion of the solar
beam, while controlling the infrared portion, for use in illuminating interior
building spaces in lieu of artificial lighting.
Solar energy device means a system or
series of mechanisms designed primarily to provide heating, to provide cooling,
to produce electrical power, to produce mechanical power, to provide solar
daylighting or to provide any combination of the foregoing by means of
collecting and transferring solar generated energy into such uses either by
active or passive means, including wind generator systems that produce
electricity. Solar energy systems may
also have the capability of storing solar energy for future use. Passive systems shall clearly be designed as
a solar energy device, such as a trombe wall, and not merely as a part of a
normal structure, such as a window.
Speculative builder means either:
(1) An
owner-builder who sells or contracts to sell, at anytime, improved real
property (as provided in Section 16-416), consisting of:
(a) Custom, model, or inventory homes, regardless of the stage of
completion of such homes; or
(b) Improved residential or commercial lots without a structure; or
(2) An
owner-builder who sells or contracts to sell improved real property, other than
improved real property specified in subsection (1) above:
(a) Prior to completion; or
(b) Before the expiration of twenty-four (24) months after the
improvements of the real property sold are substantially complete.
Substantially complete means the construction
contracting or reconstruction contracting:
(1) Has passed final inspection or its equivalent; or
(2) Certificate of occupancy or its equivalent
has been issued; or
(3) Is ready for immediate occupancy or use.
Supplier means any person who rents,
leases, licenses, or makes sales of tangible personal property within the City,
either directly to the consumer or customer or to wholesalers, jobbers,
fabricators, manufacturers, modifiers, assemblers, repairers, or those engaged
in the business of providing services which involve the use, sale, rental,
lease, or license of tangible personal property.
Tax Collector means the Management Services
Director or his designee or agent for all purposes under this Chapter.
Taxpayer means any person liable for any
tax under this Chapter.
Taxpayer Problem Resolution Officer means the individual designated
by the City to perform the duties identified in Sections 16-515 and
16-516. In cities with a population of
50,000 or more, the Taxpayer Problem Resolution Officer shall be an employee of
the City. In cities with a population of
less than 50,000, the Taxpayer Problem Resolution Officer need not be an
employee of the City. Regardless of
whether the Taxpayer Problem Resolution Officer is or is not an employee of the
City, the Taxpayer Problem Resolution Officer shall have substantive knowledge
of taxation. The identity of and telephone
number for the Taxpayer Problem Resolution Officer can be obtained from the Tax
Collector.
Telecommunication service means any service or activity
connected with the transmission or relay of sound, visual image, data,
information, images, or material over a communications channel or any
combination of communications channels.
Transient means any person who either at
the person’s own expense or at the expense of another obtains lodging space or
the use of lodging space on a daily or weekly basis, or on any other basis for
less than thirty (30) consecutive days.
Utility
service means
the producing, providing, or furnishing of electricity, electric lights,
current, power, gas (natural or artificial), or water to consumers or
ratepayers.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 88.32, § 1(1), (2), 4-28-88; Ord. No. 90.25, 7-12-90; Ord. No. 95.03,
1-12-95; Ord. No. 96.42, 12-12-96; Ord. No. 96.43, 12-12-96; Ord. No. 98.12,
3-12-98; Ord. No. 98.14, 3-12-98; Ord. No. 98.37, 6-25-98; Ord. No. 2007.20, 4-19-07;
Ord. No. 2008.26, 8-14-08; Ord. No. 2011.30, 9-8-11)
Sec. 16-110. Definitions—Income-producing capital
equipment.
(a) The following tangible personal property,
other than items excluded in subsection (d) below, shall be deemed "income‑producing
capital equipment" for the purposes of this Chapter:
(1) Machinery or equipment used directly in manufacturing,
processing, fabricating, job printing, refining or metallurgical
operations. The terms
"manufacturing", "processing", "fabricating",
"job printing", "refining", and "metallurgical"
as used in this paragraph refer to and include those operations commonly
understood within their ordinary meaning. "Metallurgical operations"
includes leaching, milling, precipitating, smelting and refining.
(2) Mining machinery, or equipment, used directly in the process of
extracting ores or minerals from the earth for commercial purposes, including
equipment required to prepare the materials for extraction and handling,
loading or transporting such extracted material to the surface.
"Mining" includes underground, surface and open pit operations for
extracting ores and minerals.
(3) Tangible personal property, sold to persons engaged in business
classified under the telecommunications classification, consisting of central
office switching equipment; switchboards; private branch exchange equipment;
microwave radio equipment, and carrier equipment including optical fiber,
coaxial cable, and other transmission media which are components of carrier
systems.
(4) Machinery,
equipment, or transmission lines used directly in producing or transmitting
electrical power, but not including distribution. Transformers and control equipment used at
transmission substation sites constitute equipment used in producing or transmitting
electrical power.
(5) Pipes
or valves four inches (4") in diameter or larger and related equipment,
used to transport oil, natural gas, artificial gas, water, or coal slurry. For the purpose of this Section, related
equipment includes: compressor units,
regulators, machinery and equipment, fittings, seals and any other parts that
are used in operating the pipes or values.
(6) Aircraft, navigational and communication instruments, and other
accessories and related equipment sold to:
(A) A person holding a federal certificate of
public convenience and necessity or foreign air carrier permit for air
transportation for use as or in conjunction with or becoming a part of aircraft
to be used to transport persons, property or United States mail in intrastate,
interstate or foreign commerce.
(B) Any foreign government for use by such
government outside of this State.
(C) Persons who are not residents of this State
and who will not use such property in this State other than in removing such
property from this State. This subdivision also applies to corporations that
are not incorporated in this State, regardless of maintaining a place of
business in this State, if the principal corporate office is located outside
this State and the property will not be used in this State other than in
removing the property from this State.
(7) Machinery, tools, equipment and related supplies used or
consumed directly in repairing, remodeling or maintaining aircraft, aircraft
engines or aircraft component parts by or on behalf of a certificated or
licensed carrier of persons or property.
(8) Railroad rolling stock, rails, ties and signal control equipment
used directly to transport persons or property.
(9) Machinery or equipment used directly to drill for oil or gas or
used directly in the process of extracting oil or gas from the earth for
commercial purposes.
(10) Buses or other urban mass transit vehicles which are used directly
to transport persons or property for hire or pursuant to a governmentally
adopted and controlled urban mass transportation program and which are sold to
bus companies holding a federal certificate of convenience and necessity or
operated by a city, town or other governmental entity or by any person
contracting with such governmental entity as part of a governmentally adopted
and controlled program to provide urban mass transportation.
(11) Metering, monitoring, receiving, and transmitting equipment
acquired by persons engaged in the business of providing utility services or
telecommunications services; but only to the extent that such equipment is to
be used by the customers of such persons and such persons separately charge or
bill their customers for use of such equipment.
(12) Groundwater measuring devices required under A.R.S. Section
45-604.
(13) Machinery or equipment used in research and development. In this paragraph, "research and
development" means basic and applied research in the sciences and
engineering, and designing, developing or testing prototypes, processes or new
products, including research and development of computer software that is
embedded in or an integral part of the prototype or new product or that is
required for machinery or equipment otherwise exempt under this Section to
function effectively. Research and
development do not include manufacturing quality control, routine consumer
product testing, market research, sales promotion, sales service, research in
social sciences or psychology, computer software research that is not included
in the definition of research and development, or other non-technological
activities or technical services.
(14) (Reserved)
(15)
Included
in income-producing capital equipment are liquid, solid or gaseous chemicals
used in manufacturing, processing, fabricating, mining, refining, metallurgical
operations, research and development or job printing, if using or consuming the
chemicals, alone or as part of an integrated system of chemicals, involving
direct contact with the materials from which the product is produced for the
purpose of causing or permitting a chemical or physical change to occur in the
materials as part of the production process.
This subsection does not include chemicals that are used or consumed in
activities such as packaging, storage or transportation but does not affect any
deduction for such chemicals that is otherwise provided by this code. Chemicals meeting the requirements of this
subsection are deemed not to be expendable under subsection (d) of this
Section.
(16) Cleanrooms that are used for manufacturing, processing,
fabrication or research and development, as defined in paragraph (13) of this
subsection, of semiconductor products.
For purposes of this paragraph, "cleanroom" means all property
that comprises or creates an environment where humidity, temperature,
particulate matter and contamination are precisely controlled within specified
parameters, without regard to whether the property is actually contained within
that environment or whether any of the property is affixed to or incorporated
into real property. Cleanroom:
(A) Includes the integrated systems,
fixtures, piping movable partitions, lighting and all property that is
necessary or adapted to reduce contamination or to control airflow,
temperature, humidity, chemical purity or other environmental conditions or
manufacturing tolerances, as well as the production machinery and equipment
operating in conjunction with the cleanroom environment.
(B) Does not include the building or other
permanent, nonremovable component of the building that houses the cleanroom
environment.
(17) Machinery and equipment that are purchased by
or on behalf of the owners of a soundstage complex and primarily used for
motion picture, multimedia or interactive video production in the complex. This paragraph applies only if the initial
construction of the soundstage complex begins after
(A) "Motion picture, multimedia or
interactive video production" includes products for theatrical and
television release, educational presentations, electronic retailing,
documentaries, music videos, industrial films, cd-rom, video game production,
commercial advertising and television episode production and other genres that
are introduced through developing technology.
(B) "Soundstage complex" means a
facility of multiple stages including production offices, construction shops
and related areas, prop and costume shops, storage areas, parking for
production vehicles and areas that are leased to businesses that complement the
production needs and orientation of the overall facility.
(18) Tangible personal property that is used by either of the following
to receive, store, convert, produce, generate, decode, encode, control or
transmit telecommunications information:
(A) Any direct broadcast satellite television or
data transmission service that operates pursuant to 47 Code of Federal
Regulations parts 25 and 100.
(B) Any satellite
television or data transmission facility, if both of the following conditions
are met:
(i) Over two-thirds of the transmissions,
measured in megabytes, transmitted by the facility during the test period were
transmitted to or on behalf of one or more direct broadcast satellite
televisions or data transmission services that operate pursuant to 47 Code of
Federal Regulations parts 25 and 100.
(ii) Over two-thirds of the transmissions,
measured in megabytes, transmitted by or on behalf of those direct broadcast
television or data transmission services during the test period were
transmitted by the facility to or on behalf of those services.
For purposes of
subdivision (B) of this paragraph, "test period" means the three
hundred sixty-five day period beginning on the later of the date on which the
tangible personal property is purchased or the date on which the direct
broadcast satellite television or data transmission service first transmits
information to its customers.
(19) Machinery and equipment that is used directly in the feeding of
poultry, the environmental control of housing for poultry, the movement of eggs
within a production and packaging facility or the sorting or cooling of
eggs. This exemption does not apply to
vehicles used for transporting eggs.
(20) Machinery or equipment, including related structural components,
that is employed in connection with manufacturing, processing, fabricating, job
printing, refining, mining, natural gas pipelines, metallurgical operations,
telecommunications, producing or transmitting electricity or research and
development that is used directly to meet or exceed rules or regulations
adopted by the Federal Energy Regulatory Commission, the United States
Environmental Protection Agency, the United States Nuclear Regulatory
Commission, the Arizona Department of Environmental Quality or a political
subdivision of this State to prevent, monitor, control or reduce land, water or
air pollution.
(21) Machinery or equipment that enables a television station to
originate and broadcast or to receive and broadcast digital television signals
and that was purchased to facilitate compliance with the Telecommunications Act
of 1996 (P.L. 104-104; 110 Stat. 56; 47 United States Code Section 336) and the
Federal Communications Commission order issued April 21, 1997, 47 Code of
Federal Regulations Part 73. This
paragraph does not exempt any of the following:
(A) Repair or replacement parts purchased for
the machinery or equipment described in this paragraph.
(B) Machinery or equipment purchased to replace
machinery or equipment for which an exemption was previously claimed and taken
under this paragraph.
(C) Any machinery or equipment purchased after
the television station has ceased analog broadcasting, or purchased after
(b) The term "income‑producing
capital equipment" shall further include ancillary machinery and equipment
used for the treatment of waste products created by the business activities
which are allowed to purchase "income‑producing capital
equipment" defined in subsection (a) above.
(c) The term "income‑producing
capital equipment" shall further include repair and replacement parts,
other than the items in subsection (d) below, where the property is acquired to
become an integral part of another item itemized in subsections (a) or (b)
above.
(d) The tangible personal property defined as
income‑producing capital equipment in this Section shall not
include:
(1) Expendable materials. For purposes of this paragraph, expendable
materials do not include any of the categories of tangible personal property
specified in subsections (a), (b) or (c) of this Section regardless of the cost
or useful life of that property.
(2) Janitorial equipment and hand tools.
(3) Office equipment, furniture, and supplies.
(4) Tangible personal property used in selling or distributing
activities.
(5) Motor vehicles required to be licensed by the State of
(6) Shops, buildings, docks, depots, and all other materials of
whatever kind or character not specifically included as exempt.
(7) Motors and pumps used in drip irrigation
systems.
(e) For the purposes of this Section:
(1) "Aircraft" includes:
(A) An airplane flight simulator that is
approved by the Federal Aviation Administration for use as a Phase II or higher
flight simulator under Appendix H, 14 Code of Federal Regulations Part 121.
(B) Tangible personal property that is
permanently affixed or attached as a component part of an aircraft that is
owned or operated by a certificated or licensed carrier of persons or property.
(2) "Other accessories and related equipment" includes
aircraft accessories and equipment such as ground service equipment that
physically contact aircraft at some point during the overall carrier operation.
(Ord. No. 87.17, § 1(16-110),
Sec.
16-115. Definitions—Computer software;
custom computer programming.
(a) Computer
software means any computer program, part of such a program, or any
sequence of instructions for automatic data processing equipment. Computer software which is not "custom
computer programming" is deemed to be tangible personal property for the
purposes of this Chapter, regardless of the method by which title, possession,
or right to use the software is transferred to the user.
(b) Custom
computer programming means any computer software which is written or
prepared exclusively for a customer and includes those services represented by
separately stated charges for the modification of existing prewritten programs
when the modifications are written or prepared exclusively for a customer.
(1) The term does not include a prewritten program which is held or
existing for general or repeated sale, lease or license, even if the program
was initially developed on a custom basis for in-house, or for a single
customer's, use.
(2) Modification to an existing prewritten program to meet the
customer's needs is custom computer programming only to the extent of the
modification, and only to the extent that the actual amount charged for the
modification is separately stated on invoices, statements, and other billing
documents supplied to the customer.
(Ord. No. 87.17, § 1,
Sec. 16-120.
Definitions―Food for home consumption.
(a) For the purposes of this section only, the following definitions
shall be applicable:
(1) eligible grocery business means an establishment whose
sales of food are such that it is eligible to participate in the Food Stamp Program
established by the food stamp act
of 1977 (p.l. 95-113; 91 stat. 958.7 u.s.c. section 2011 et seq.), according to regulations in
effect on january 1, 1979. An establishment is deemed eligible to
participate in the Food Stamp Program if it is authorized to participate in the
program by the united states department of agriculture
food and nutrition service
field office on the effective date of this section, or if, prior to
a reporting period for which the return is filed, such retailer proves to the satisfaction
of the Tax Collector that the establishment, based on the nature of
the retailer’s food sales, could be eligible to participate in the Food Stamp Program
established by the food stamp act
of 1977 according to regulations in effect on January 1, 1979.
(2) facilities for the consumption of food means tables,
chairs, benches, booths, stools, counters, and similar conveniences, trays,
glasses, dishes, or other tableware and parking areas for the convenience of
in-car consumption of food in or on the premises on which the retailer conducts
business.
(3) food for consumption on the premises means any of the
following:
(A) "hot
prepared food" as defined below.
(B) hot
or cold sandwiches.
(C) food
served by an attendant to be eaten at tables, chairs, benches, booths, stools,
counters, and similar conveniences and within parking areas for the convenience
of in-car consumption of food.
(D) food
served with trays, glasses, dishes, or other tableware.
(E) beverages
sold in cups, glasses, or open containers.
(F) food
sold by caterers.
(G) food
sold within the premises of theatres, movies, operas, shows of any type or
nature, exhibitions, concerts, carnivals, circuses, amusement parks, fairs,
races, contests, games, athletic events, rodeos, billiard and pool parlors,
bowling alleys, public dances, dance halls, boxing, wrestling, and other
matches, and any business which charges admission, entrance, or cover fees for
exhibition, amusement, entertainment, or instruction.
(H) any
items contained in subsections (a)(3)(A) through (G) above even though they are
sold on a "take-out" or "to go" basis, and whether or not
the item is packaged, wrapped, or is actually taken from the premises.
(4) hot prepared food means those products, items, or
ingredients of food which are prepared and intended for consumption in a heated
condition. "hot prepared food" includes a combination of hot and
cold food items or ingredients if a single price has been established.
(5) premises means the total space and facilities in or on
which a vendor conducts business and which are owned or controlled, in whole or
in part, by a vendor or which are made available for the use of customers of
the vendor or group of vendors, including any building or part of a building,
parking lot, or grounds.
(b) food for home consumption means all
food, except food for consumption on the premises, if sold by any of the
following:
(1) an
eligible grocery business.
(2) a person who
conducts a business whose primary business is not the sale of food but who
sells food which is displayed, packaged, and sold in a similar manner as an
eligible grocery business.
(3) a person who sells
food and does not provide or make available any facilities for the consumption
of food on the premises.
(4) a person who
conducts a delicatessen business either from a counter which is separate from
the place and cash register where taxable sales are made or from a counter
which has two cash registers and which are used to record taxable and tax
exempt sales, or a retailer who conducts a delicatessen business who uses a
cash register which has at least two tax computing keys which are used to
record taxable and tax exempt sales.
(5) reserved.
(6) vending machines
and other types of automatic retailers.
(7) a person’s sales
of food, drink and condiment for consumption within the premises of any prison,
jail or other institution under the jurisdiction of the state department
of corrections, the department of public safety,
the department of juvenile corrections or a county
sheriff.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 2010.20, 6-24-10)
ARTICLE
II. DETERMINATION OF GROSS INCOME
Sec.
16-200. Determination of gross income—In
general.
(a) Gross income includes:
(1) The value proceeding or accruing from the sale of property, the
providing of service, or both.
(2) The total amount of the sale, lease, license for use, or rental
price at the time of such sale, rental, lease, or license.
(3) All receipts, cash, credits, barter, exchange, reduction of or
forgiveness of indebtedness, and property of every kind or nature derived from
a sale, lease, license for use, rental, or other taxable activity.
(4) All other receipts whether payment is advanced prior to,
contemporaneous with, or deferred in whole or in part subsequent to the
activity or transaction.
(b) Barter, exchange, trade-outs, or similar
transactions are includable in gross income at the fair market value of the
service rendered or property transferred, whichever is higher, as they
represent consideration given for consideration received.
(c) No deduction or exclusion is allowed from
gross income on account of the cost of the property sold, the time value of
money, expense of any kind or nature, losses, materials used, labor or service
performed, interest paid, or credits granted.
(Ord. No. 87.17, § 1,
Sec. 16-210. Determination
of gross income—Transactions between affiliated companies or persons.
In
transactions between affiliated companies or persons, or in other circumstances
where the relationship between the parties is such that the gross income from
the transaction is not indicative of the market value of the subject matter of
the transaction, the Tax Collector shall determine the "market value"
upon which the City Privilege and Use Taxes shall be levied. "Market
value" shall correspond as nearly as possible to the gross income from
similar transactions of like quality or character by other taxpayers where no
common interest exists between the parties, but otherwise under similar
circumstances and conditions.
(Ord. No. 87.17, § 1,
Sec.
16-220. Determination of gross
income—Artificially contrived transactions.
The
Tax Collector may examine any transaction, reported or unreported, if, in his
opinion, there has been or may be an evasion of the taxes imposed by this
Chapter and to estimate the amount subject to tax in cases where such evasion
has occurred. The Tax Collector shall disregard any transaction which has been
undertaken in an artificial manner in order to evade the taxes imposed by this
Chapter.
(Ord. No. 87.17, § 1,
Sec.
16-230. Determination of gross income
based upon method of reporting.
The
method of reporting chosen by a taxpayer, as provided in Section 16-520,
necessitates the following adjustments to gross income for all purposes under
this Chapter:
(a) Cash
basis. When a person elects to report and pay taxes on a cash basis, gross
income for the reporting period shall include:
(1) The total amounts received on "paid in full"
transactions, against which are allowed all applicable deductions and
exclusions; and
(2) All amounts received on accounts receivable, conditional sales
contract, or other similar transactions, against which no deductions and no
exclusions from gross income are allowed.
Interest on finance contracts may be deducted if separately itemized on
all books and records.
(b) Accrual
basis. When a person elects to report and pay taxes on an accrual basis,
gross income shall include all gross income for the applicable period
regardless of whether receipts are for cash, credit, conditional, or partially
deferred transactions, and regardless of whether or not any security document
or instrument is sold, assigned, or otherwise transferred to another. Persons reporting on the accrual basis may
deduct bad debts, provided that:
(1) The amount deducted for the bad debt must be deducted from gross
income of the month in which the actual charge-off was made, and only to the
extent that such amount was actually charged-off, and also only to the extent
that such amount is or was included as taxable gross income; and
(2) If any amount is subsequently collected on such charged-off
account, it shall be included in gross income for the month in which it was
collected, without deduction for expense of collection.
(Ord. No. 87.17, § 1,
Sec. 16-240. Exclusion of cash discounts, returns,
refunds, trade-in values, vendor-issued coupons, and rebates from gross income.
(a) The following items are not included in
gross income:
(1) Cash discounts allowed by the vendor for timely payment, but
only discounts allowed against taxable gross income.
(2) The value of property returned by customers to the extent of the
amount actually refunded either in cash or by credit and the amount refunded
was included in taxable gross income.
(3) The trade-in allowance for tangible personal property accepted
as payment, not to exceed the full sales price for any tangible personal
property sold, when the full sales price is included in taxable gross
income. Trade-in allowances are not
allowed for manufactured buildings taxable under Section 16-427.
(4) When coupons issued by a vendor are later accepted by the vendor
as a discount against the transaction, the discount may be excluded from gross
income as a cash discount. Amounts credited or refunded by a vendor for
redemption of coupons issued by any person other than the vendor may not be
excluded from gross income.
(5) Rebates issued by the vendor to a customer as a discount against
the transaction may be excluded from gross income as a cash discount. Rebates issued by a person other than the
vendor may not be excluded from gross income, even when the vendee assigns his right
to the rebate to the vendor.
(6) In computing the tax base, gross proceeds of sales or gross
income does not include a manufacturer’s cash rebate on the sales price of a
motor vehicle if the buyer assigns the buyer’s right in the rebate to the retailer.
(b) If the amount specified in subsection (a)
above is credited by a vendor subsequent to the reporting period in which the
original transaction occurs, such amount may be excluded from the taxable gross
income of that subsequent reporting period, but only to the extent that the
excludable amount was reported as taxable gross income in that prior reporting
period.
(Ord. No. 87.17, § 1,
Sec. 16-250. Exclusion of combined taxes from gross income;
itemization; notice; limitations.
(a) When
tax is separately charged and/or collected.
The total amount of gross income shall be exclusive of combined
taxes only when the person upon whom the tax is imposed shall establish to the
satisfaction of the Tax Collector that such tax has been added to the total
price of the transaction. The taxpayer
must provide to his customer and also keep a reliable record of the actual tax
charged or collected, shown by cash register tapes, sales tickets, or other accurate
record, separating net transaction price and combined tax. If at any time the Tax Collector cannot
ascertain from the records kept by the taxpayer the total or amounts billed or
collected on account of combined taxes, the claimed taxes collected may not be
excluded from gross income, unless such records are completed or clarified to
the satisfaction of the Tax Collector.
(1) Remittance of all tax charged
and/or collected. When an added
charge is made to cover City (or combined) Privilege and Use Taxes, the person
upon whom the tax is imposed shall pay the full amount of the City taxes due,
whether collected by him or not, and in the event he collects more than the
amount due he shall remit the excess to the Tax Collector. In the event the Tax Collector cannot
ascertain from the records kept by the taxpayer the total or amounts of taxes
collected by him, and the Tax Collector is satisfied that the taxpayer has
collected taxes in an amount in excess of the tax assessed under this Chapter,
the Tax Collector may determine the amount collected and collect the tax so
determined in the manner provided in this Chapter.
(2) Itemization. A taxpayer, in order to be entitled to
exclude from his gross income any amounts paid to him by customers for combined
taxes passed on to the customer, must prove that he has provided his customer
with a written record of the transaction showing at a minimum the price before
the tax, the combined taxes, and the total cost. This shall be in addition to the record required
to be kept under subsection (a) above.
(b) When
tax has been neither separately charged nor separately collected. When the person upon whom the tax is imposed
shall establish by means of invoices, sales tickets, or other reliable
evidence, that no added charge was made to cover combined taxes, the taxpayer
may exclude tax collected from such income by dividing such taxable gross
income by 1.00 plus a decimal figure representing the effective combined tax
rate expressed as a fraction of 1.00.
(Ord. No. 87.17, § 1,
Sec.
16-260. Exclusion of fees and taxes from
gross income; limitations.
(a) There shall be excluded from gross income
of vendors of motor vehicles those motor vehicle registration fees, license
fees and taxes, and lieu taxes imposed pursuant to Title 28, Arizona Revised
Statutes in connection with the initial purchase of a motor vehicle, but only
to the extent that such taxes or fees or both have been separately itemized and
collected from the purchaser of the motor vehicle by the vendor, actually
remitted to the proper registering, licensing, and taxing authorities, and the
provisions of Article III, regarding recordkeeping, are met. For the purpose of the exclusion provided by
this subsection only, the terms vendor and vendee shall also apply to a lessor
and lessee, respectively, of a motor vehicle if, in addition to all other
requirements of this subsection, the lease agreement specifically requires the
lessee to pay such fees or taxes, and such amounts are separately itemized in
the documentation provided to the lessee.
(b) There shall be excluded from gross income
of vendors at retail of heavy trucks and trailers, the amount attributable to
Federal Excise Taxes imposed by 26 U.S.C. Section 4051, but only to the extent
that the provisions of Article III, relating to recordkeeping, have been met.
(c) There shall be excluded from gross income
the following fees, taxes, and lieu taxes, but only to the extent that such
taxes or fees or both have been separately itemized and collected from the
purchaser by the vendor, actually remitted to the proper registering,
licensing, and taxing authorities, and the provisions of Article III, regarding
recordkeeping, are met:
(1) Emergency telecommunication services excise tax imposed pursuant
to A.R.S. Section 42-5252.
"Emergency telecommunication services" means telecommunication
services or systems that use number 911 or a similarly designated telephone
number for emergency calls;
(2) The telecommunication devices for the deaf and the severely
hearing and speech impaired excise tax imposed pursuant to A.R.S. Section 42‑5252;
(3) Federal excise taxes on communications services as imposed by 26
U.S.C. Section 4251;
(4) Car rental surcharge imposed pursuant to A.R.S. Section 48-4234;
(5) Federal excise taxes on passenger vehicles as imposed by 26
U.S.C. Section 4001(.01);
(6) Waste tire disposal fees, imposed pursuant to A.R.S. Section 44‑1302.
(d) There shall be excluded from gross income of
vendors of motor vehicles dealer documentation fees, but only to the extent
that such fees have been separately itemized and collected from the purchaser
of the motor vehicle by the vendor.
(Ord. No. 87.17, § 1,
Sec.
16-265. Reserved.
(Ord. No. 95.03,
Sec.
16-266. Exclusion of motor carrier
revenues from gross income.
There
shall be excluded from gross income the gross proceeds of sale or gross income
derived from any of the following:
(a) A
motor carrier's use on the public highways in this State if the motor carrier
is subject to a fee prescribed in A.R.S. Title 28, Chapter 15, Article 4 or A.R.S.
Title 28, Chapter 16, Article 4.
(b) Leasing,
renting or licensing a motor vehicle subject to and upon which the fee has been
paid under A.R.S. Title 28, Chapter 16.
(c)
The
sale of a motor vehicle and any repair and replacement parts and tangible
personal property becoming a part of such motor vehicle, to a motor carrier who
is subject to a fee prescribed in A.R.S. Title 28, Chapter 16 and who is
engaged in the business of leasing, renting or licensing such property.
(d) For
the purposes of these exclusions, "motor carrier" includes a motor
vehicle weighing 26,000 pounds or more, a lightweight motor vehicle which
weighs 12,001 pounds to 26,000 pounds and a light motor vehicle weighing 12,000
pounds or less, which pay the fee prescribed in A.R.S. Title 28, Chapter 15 or A.R.S.
Title 28, Chapter 16.
(Ord. No. 95.03,
Sec.
16-270. Exclusion of gross income of
persons deemed not engaged in business.
(a) For the purposes of this Section, the
following definitions shall apply:
(1) Federally exempt organization
means an organization which has received a determination of exemption, or
qualifies for such exemption, under 26 U.S.C. Section 501(c) and rules and
regulations of the Commissioner of Internal Revenue pertaining to same, but not
including a "governmental entity", "nonlicensed business",
or "public educational entity."
(2) Governmental
entity means the Federal Government, the State of Arizona, any other state,
or any political subdivision, department, or agency of any of the foregoing;
provided further that persons contracting with such a governmental entity to
operate any part of a governmentally adopted and controlled program to provide
urban mass transportation shall be deemed a governmental entity in all
activities such person performs when engaged in said contract.
(3) Non-licensed business
means any person conducting any business activity for gain or profit, whether
or not actually realized, which person is not required to be licensed for the
conduct or transaction of activities subject to the tax imposed under this Chapter.
(4) Proprietary club means
any club which has qualified or would otherwise qualify as an exempt club under
the provisions of 26 U.S.C. Section 501(c)(7), (8), and (9), notwithstanding
the fact that some or all of the members may own a proprietary interest in the
property and assets of the club.
(5) Public educational entity
means any educational entity operated pursuant to any provisions of Title 15,
Arizona Revised Statutes.
(b) Transactions which, if conducted by any
other person, would produce gross income subject to tax under this Chapter
shall not be subject to the imposition of such tax if conducted entirely by a
public educational entity; governmental entity, except "proprietary
activities" of municipalities as provided by regulation; or non-licensed
business.
(c) Transactions which, if conducted by any
other person, would produce gross income subject to the tax under this Chapter
shall not be subject to the imposition of such tax if conducted entirely by a
federally exempt organization or proprietary club with the following
exceptions:
(1) Transactions involving proprietary. clubs and organizations
exempt under 26 U.S.C. Section 501(c)(7), (8), and (9), where the gross revenue
of the activity received from persons other than members and bona fide guests
of members is in an amount in excess of fifteen percent (15%) of total gross
revenue, as prescribed by Regulation. In
the event this fifteen percent (15%) limit is exceeded, the entire gross income
of such entity shall be subject to the applicable tax.
(2) Gross income from unrelated business income as that term is
defined in 26 U.S.C Section 512, including all statutory definitions and
determinations, the rules and regulations of the Commissioner of Internal
Revenue, and his administrative interpretations and guidelines.
(3) Fund-raising activities of charitable, religious, or educational
organizations, which include events for which admission is charged where
attendance exceeds ten thousand (10,000) shall be deemed regularly conducted
business activity for purposes of this Chapter.
(d) Except as may be provided elsewhere in this
Chapter, transactions where customers are exempt organizations, proprietary
clubs, public educational entities, governmental entities, or non-licensed
businesses shall be deemed taxable transactions for the purpose of the
imposition of taxes under this Chapter, notwithstanding that property so
acquired may in fact be resold or leased by the acquiring person to
others. In the case of sales, rentals,
leases, or licenses to proprietary clubs or exempt organizations, the vendor
may be relieved from the responsibility for reporting and paying tax on such
income only by obtaining from its vendee a verified statement that includes:
(1) A statement that when the property so acquired is resold,
rented, leased, or licensed, that the otherwise exempt vendee chooses, or is
required, to pay City Privilege Tax or an equivalent excise tax on its gross in
come from such transactions and does in fact file returns on same; and
(2) The Privilege License number of the otherwise exempt vendee; and
(3) Such other information as the Tax Collector may require.
(e) Franchisees or concessionaires operating
businesses for or on behalf of any exempt organization, governmental entity,
public educational entity, proprietary club, or non-licensed business shall not
be considered to be such an exempt organization, club, entity, or non-licensed
business, but shall be deemed to be a taxpayer subject to the provisions of
this Chapter, except as provided in the definition of governmental entity,
regarding urban mass transit.
(f) In any case, if a federally exempt
organization, proprietary club, or non-licensed business rents, leases,
licenses, or purchases any tangible personal property for its own storage or
use, and no City Privilege or Use Tax or equivalent excise tax has been paid on
such transaction, said organization, club, or business shall be liable for the
Use Tax upon such acquisitions or use of such property.
(Ord. No. 87.17, § 1,
Sec. 16-280. Reserved.
(Ord.
No. 87.17, § 1,
Sec.
16-285. Reserved.
(Ord. No. 87.17, § 1,
Sec.
16-290. Reserved.
(Ord. No. 87.17, § 1,
ARTICLE
III. LICENSING AND RECORDKEEPING
Sec.
16-300. Licensing requirements.
(a) The following persons shall make
application to the Tax Collector for a Privilege License, accompanied by a
non-refundable fee of seventy dollars ($70) and no person shall engage or
continue in business or engage in such activities until he shall have such a
license:
(1) Every person desiring to engage or continue in business
activities within the City upon which a Privilege Tax is imposed by this
Chapter.
(2) Every person, engaging or continuing in business within the
City, storing or using tangible personal property in this City upon which a Use
Tax is imposed by this Chapter.
(3) Reserved.
(b) A person engaged in more than one activity
subject to City Privilege and Use Taxes at any one business location is not
required to obtain a separate license for each activity; provided that, at the
time such person makes application for a license, he shall list on such
application each category of activity in which he is engaged. The licensee shall inform the Tax Collector
of any changes in his business activities, location, or mailing address within
thirty (30) days.
(c) Limitation.
The issuance of a Privilege License by the Tax Collector shall in no way be
construed as permission to operate a business activity in violation of any
other law or regulation to which such activity may be subject.
(Ord. No. 87.17, § 1,
Sec. 16-305. Special licensing requirements.
(a) Partnerships.
Application for a Privilege License for a partnership engaging or continuing in
business in the City shall provide, as a minimum, the names and addresses of
all general partners. Licenses issued to
persons engaged in business as partners, limited or general, shall be in the
name of the partnership.
(b) Corporations.
Application for a Privilege License for a corporation engaging or continuing in
business in the City shall provide, as a minimum, the names and addresses of
both the Chief Executive Officer and Chief Financial Officer of the
corporation. Licenses issued to persons
engaged in business as corporations shall be in the name of the corporation.
(c) Multiple
locations or multiple business names.
A person engaged in or conducting one or more businesses at two (2) or
more locations or under two (2) or more business names shall procure a license
for each such location or business name.
A "location" is a place of a separate business establishment.
(d) Reserved.
(Ord. No. 87.17, § 1,
Sec.
16-310. Licensing—Duration of license;
transferability; display.
(a) Except as provided in Section 16-320, the
Privilege License shall be valid only for the calendar year in which it is
issued unless renewed each year by filing the appropriate application for renewal
and paying the renewal fee of fifty dollars ($50) which is due and payable on
January 1 and shall be considered delinquent if not received on or before the
last business day of January. Application and payment for renewal must be
received within the Tax Collector's office by such date to be deemed filed and
paid.
(b) The Privilege License shall be
nontransferable between owners or locations, and shall be on display to the
public in the licensee's place of business.
(c) Any licensee who permits his license to
expire through cancellation as provided in Section 16-320, by his request for
cancellation, by surrender of the license, or by the cessation of the business
activity for which the license was issued, and who thereafter applies for
license, shall be granted a new license as an original applicant and shall pay
the current license fee. Any licensee
who loses or misplaces his Privilege License which is still in effect shall be
charged the current license fee for each reissuance of a license.
(d) Any taxpayer who fails to renew his license
on or before the date provided in subsection (a) above shall be deemed to be
operating without a license. After such
date taxpayer is required to pay a fifteen dollar ($15) late renewal penalty,
in addition to the annual license renewal fee provided in subsection (a) above.
(e) Reserved.
(f) Reserved.
(g) Reserved.
(h) Reserved.
(i) Reserved.
(j) Reserved.
(Ord. No. 87.17, § 1,
Sec.
16-315. Transient privilege licenses.
Notwithstanding
the provisions of Section 16-300, a person who will be engaged in business for
a period of thirty (30) days or less, may be issued a transient privilege
license, which shall be valid only for a thirty (30) day period following the
application date, upon payment of a transient application and license fee of
twenty-five dollars ($25) in lieu of all other fees imposed under this
article. In the event that a person
obtaining and operating a business activity by virtue of a transient privilege
license, continues to conduct said business beyond the thirty (30) days set
forth in such license, such person shall be deemed to be conducting a business
activity in the city without a valid privilege license, and shall be subject to
all penalties imposed on such activity
under this chapter. In addition thereto,
such person shall not be relicensed with either a privilege license under the
provisions of Section 16-300, or a further temporary license under the
provision of this Section without paying all other applicable application fees
and annual fees.
(Ord. No. 88.32, § 1(5), 4-28-88;
Ord. No. 2008.52, 10-2-08)
Sec. 16-320. Licensing—Cancellation; revocation.
(a) Cancellation. The Tax Collector shall be authorized to
cancel the City Privilege License of any licensee as "inactive" if
the taxpayer, required to report monthly to the City, has neither filed any
return nor remitted to the City any taxes imposed by this Chapter for a period
of six (6) consecutive months; or, if required to report quarterly, has neither
filed any return nor remitted any taxes imposed by this Chapter for two (2)
consecutive quarters; or, if required to report annually, has neither filed any
return nor remitted any taxes imposed by this Chapter when such annual report
and tax are due to be filed with and remitted to the Tax Collector.
(b) Revocation. If any licensee fails to pay any tax,
interest, penalty, fee, or sum required to be paid to the City under this
Chapter, or if such licensee fails to comply with any other provisions of this
Chapter, the Tax Collector shall be authorized to revoke the City Privilege
License of said licensee.
(c) Notice
and hearing. The Tax Collector shall
deliver notice to such licensee of cancellation or revocation of the Privilege
License. If within twenty (20) days the
licensee so notified requests a hearing, he shall be granted a hearing before
the Tax Collector.
(d) After cancellation or revocation of a
taxpayer's license, the taxpayer shall not be relicensed until all reports have
been filed; all fees, taxes, interest, and penalties due have been paid; and he
is in compliance with the provisions of this Chapter.
(Ord. No. 87.17, § 1,
Sec.
16-330. Operating without a license.
It
shall be unlawful for any person who is required by this Chapter to obtain a
Privilege License to engage in or continue in business within the City without
a license. The Tax Collector shall
assess any delinquencies in tax, interest, and penalties which may apply
against such person upon any transactions subject to the taxes imposed by this
Chapter.
(Ord. No. 87.17, § 1,
Sec.
16-350. Recordkeeping requirements.
(a) It shall be the duty of every person
subject to the tax imposed by this Chapter to keep and preserve suitable
records and such other books and accounts as may be necessary to determine the
amount of tax for which he is liable under this Chapter. The books and records must contain, at a
minimum, such detail and summary information as may be required by Regulation;
or when records are maintained within an electronic data processing (EDP)
system, the requirements established by the Arizona Department of Revenue for
privilege tax filings will be accepted.
It shall be the duty of every person to keep and preserve such books and
records for a period equal to the applicable limitation period for assessment
of tax, and all such books and records shall be open for inspection by the Tax
Collector during any business day.
(b) The Tax Collector may direct, by letter, a
specific taxpayer to keep specific other books, records, and documents. Such letter directive shall apply:
(1) Only for future reporting periods; and
(2) Only by express determination of the Tax Collector that such
specific recordkeeping is necessary due to the inability of the City to conduct
an adequate examination of the past activities of the taxpayer, which inability
resulted from inaccurate or inadequate books, records, or documentation
maintained by the taxpayer.
(Ord. No. 87.17, § 1,
Sec. 16-360. Recordkeeping—Claim of exclusion,
exemption, deduction, or credit; documentation; liability.
(a) All deductions, exclusions, exemptions, and
credits provided in this Chapter are conditional upon adequate proof and
documentation of such as may be required either by this Chapter or Regulation.
(b) Any person who claims and receives an
exemption, deduction, exclusion, or credit to which he is not entitled under
this Chapter, shall be subject to, liable for, and pay the tax on the
transaction as if the vendor subject to the tax had passed the burden of the
payment of the tax to the person wrongfully claiming the exemption. A person who wrongfully claimed such
exemption shall be treated as if he is delinquent in the payment of the tax and
shall be subject to interest and penalties upon such delinquency. However, if the tax is collected from the
vendor on such transaction it shall not again be collected from the person
claiming the exemption, or if collected from the person claiming the exemption
it shall not also be collected from the vendor.
(Ord. No. 87.17, § 1,
Sec.
16-370. Inadequate or unsuitable
records.
In
the event the records provided by the taxpayer are considered by the Tax
Collector to be inadequate or unsuitable to determine the amount of the tax for
which such taxpayer is liable under the provisions of this Chapter, it is the
responsibility of the taxpayer either:
(a) To
provide such other records required by this Chapter or Regulation; or
(b) To
correct or to reconstruct his records, to the satisfaction of the Tax
Collector.
(Ord. No. 87.17, § 1,
ARTICLE
IV. PRIVILEGE TAXES
Sec.
16-400. Imposition of privilege taxes;
presumption.
(a) There are hereby levied and imposed,
subject to all other provisions of this Chapter, the following Privilege Taxes
for the purpose of raising revenue to be used in defraying the necessary
expenses of the City, such taxes to be collected by the Tax Collector:
(1) A Privilege Tax upon persons on account of their business
activities, to the extent provided elsewhere in this Article, to be measured by
the gross income of persons, whether derived from residents of the City or not,
or whether derived from within the City or from without.
(2) Reserved.
(b) Taxes
imposed by this Chapter are in addition to others. Except as specifically designated elsewhere
in this Chapter, each of the taxes imposed by this Chapter shall be in addition
to all other licenses, fees, and taxes levied by law, including other taxes
imposed by this Chapter.
(c) Presumption. For the purpose of proper administration of
this Chapter and to prevent evasion of the taxes imposed by this Chapter, it
shall be presumed that all gross income is subject to the tax until the
contrary is established by the taxpayer.
(d) Limitation
of exemptions, deductions, and credits allowed against the measure of taxes
imposed by this Chapter. All
exemptions, deductions, and credits set forth in this Chapter shall be limited
to the specific activity or transaction described and not extended to include
any other activity or transaction subject to the tax.
(Ord. No. 87.17, § 1,
Editor's
note—(a)
Voters granted authority to city council on September 14, 1993, to increase the
privilege and use tax from 1% to 1.2%.
Ord. No. 93.37, adopted
(b) Voters granted authority to city
council on
(c) Voters granted authority to city
council on
(d) Voters granted authority to city
council on May 18, 2010, to increase the privilege and use tax from 1.8% to
2%. Ord. No. 2010.20, adopted 6-24-10,
increased the privilege and use tax from 1.8% to 2%, effective July 1, 2010,
per the terms of the Ordinance on file with the city clerk.
Sec.
16-405. Advertising.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of "local advertising"
by billboards, direct mail, radio, television, or by any other means. However, commission and fees retained by an
advertising agency shall not be includable in gross income from "local
advertising". All delivery or
disseminating of information directly to the public or any portion thereof for
a consideration shall be considered "local advertising", except the
following:
(1) The advertising of a product or service which is sold or
provided both within and without the State by more than one "commonly
designated business entity" within State, and in which the advertisement
names either no "commonly designated business entity" within the
State or more than one "commonly designated business entity". "Commonly designated business
entity" means any person selling or providing any product or service to
its customers under a common business name or style, even though there may be
more than one legal entity conducting business functions using the same or
substantially the same business name or style by virtue of a franchise,
license, or similar agreement.
(2) The advertising of a facility or of a service or activity in
which neither the facility nor a business site carrying on such service or
activity is located within the State.
(3) The advertising of a product which may only be purchased from an
out-of-state supplier.
(4) Political advertising for
(5) Advertising by means of product purchase coupons redeemable at
any retail establishment carrying such product but not product coupons
redeemable only at a single commonly designated business entity.
(6) Advertising transportation services where a substantial portion
of the transportation activity of the business entity advertised involves
interstate or foreign carriage.
(b) Reserved.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. No. 96.41, 10-24-96; Ord. No. 2000.37, 9-14-00;
Ord. No. 2010.33, 9-16-10)
Sec.
16-407. Reserved.
(Ord. No. 88.32, § 1(6), 4-28-88)
Sec.
16-410. Amusements, exhibitions, and
similar activities.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of providing amusement that begins
in the city or takes place entirely within the city, which includes the
following type or nature of businesses:
(1) Operating or conducting theaters, movies, operas, shows of any
type or nature, exhibitions, concerts, carnivals, circuses, amusement parks,
menageries, fairs, races, contests, games, billiard or pool parlors, bowling
alleys, skating rinks, tennis courts, golf courses, video games, pinball
machines, public dances, dance halls, sports events, jukeboxes, batting and
driving ranges, animal rides, or any other business charging admission for
exhibition, amusement, or entertainment.
(2) Reserved.
(3) Health spas and fitness centers, which
charge for the use of their premises, whether on a per-event use or for
long-term usage, such as membership fees.
(b) Deductions or exemptions. The gross proceeds of sales or gross
income derived from the following sources is exempt from the tax imposed by
this Section:
(1) Reserved.
(2) Amounts retained by the Arizona Exposition and State Fair Board from ride ticket sales at the annual Arizona State Fair.
(3) Income received from a hotel business subject to tax under Section 16-444, if all of the following apply:
(A) The hotel business receives gross income from a customer for the specific business activity otherwise subject to amusement tax.
(B) The consideration received by the hotel business is equal to or greater than the amount to be deducted under this subsection.
(C) The hotel business has provided an exemption certificate to the person engaging in business under this Section.
(4) Income that is specifically included as the gross income of a business activity upon which another Section of this article imposes a tax, that is separately stated to the customer and is taxable to the person engaged in that classification not to exceed consideration paid to the person conducting the activity.
(5) Income from arranging transportation connected to amusement activity that is separately stated to the customer, not to exceed consideration paid to the transportation business.
(c) The tax imposed by this Section shall not include arranging an amusement activity as a service to a person’s customers if that person is not otherwise engaged in the business of operating or conducting an amusement themselves or through others. This exception does not apply to businesses that operate or conduct amusements pursuant to customer orders and send the billings and receive the payments associated with that activity, including when the amusement is performed by third party independent contractors. For the purposes of this paragraph "arranging" includes billing for or collecting amusement charges from a person’s customers on behalf of the persons providing the amusement.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. 95.03, 1-12-95; Ord No. 95.50, 1-11-96; Ord. No.
96.41, 10-24-96; Ord. No. 98.13, 3-12-98; Ord. No. 2000.37, 9-14-00; Ord. No.
2007.20, 4-19-07; Ord. No. 2010.20, 6-24-10)
Sec.
16-415. Construction contracting—Construction
contractors.
(a) The tax rate shall be at an amount equal to
one and eight-tenths percent (1.8%) of the gross income from the business upon
every construction contractor engaging or continuing in the business activity
of construction contracting within the City.
(1) However, gross income from construction contracting shall not
include charges related to groundwater measuring devices required by A.R.S.
Section 45-604.
(2) Reserved.
(3) Gross income from construction contracting shall not include
gross income from the sale of manufactured buildings taxable under Section
16-427.
(4) For taxable periods beginning from and after July 1, 2008, the
portion of gross proceeds of sales or gross income attributable to the actual
direct costs of providing architectural or engineering services that are
incorporated in a contract is not subject to tax under this Section. For the purposes of this subsection,
"direct costs" means the portion of the actual costs that are
directly expended in providing architectural or engineering services.
(b) Deductions
and exemptions:
(1) Gross income derived from acting as a "subcontractor"
shall be exempt from the tax imposed by this Section.
(2) All construction contracting gross income subject to the tax and
not deductible herein shall be allowed a deduction of thirty-five percent
(35%).
(3) The gross proceeds of sales or gross income attributable to the
purchase of machinery, equipment or other tangible personal property that is
exempt from or deductible from privilege or use tax under:
(A) Section 16-465; subsections (g) and (p)
(B) Section 16-660, subsections (g) and (p)
shall be exempt or
deductible, respectively, from the tax imposed by this Section.
(4) The gross proceeds of sales or gross income that is derived from
a contract entered into for the installation, assembly, repair or maintenance
of income-producing capital equipment, as defined in Section 16-110, that is
deducted from the retail classification pursuant to Section 16-465(g), that
does not become a permanent attachment to a building, highway, road, railroad,
excavation or manufactured building or other structure, project, development or
improvement shall be exempt from the tax imposed by this Section. If the ownership of the realty is separate
from the ownership of the income-producing capital equipment, the determination
as to permanent attachment shall be made as if the ownership was the same. The deduction provided in this paragraph does
not include gross proceeds of sales or gross income from that portion of any
contracting activity which consists of the development of, or modification to,
real property in order to facilitate the installation, assembly, repair,
maintenance or removal of the income-producing capital equipment. For purposes of this paragraph,
"permanent attachment" means at least one of the following:
(A) To be incorporated into real property.
(B) To become so affixed to real property that
it becomes part of the real property.
(C) To be so attached to real property that
removal would cause substantial damage to the real property from which it is
removed.
(5) The gross proceeds of sales or gross income received from a
contract for the construction of an environmentally controlled facility for the
raising of poultry for the production of eggs and the sorting, or cooling and
packaging of eggs shall be exempt from the tax imposed under this Section.
(6) The gross proceeds of sales or gross income that is derived from
the installation, assembly, repair or maintenance of clean rooms that are
deducted from the tax base of the retail classification pursuant to Section
16-465, subsection (g) shall be exempt from the tax imposed under this Section.
(7) The gross proceeds of sales or gross income that is derived from
a contract entered into with a person who is engaged in the commercial
production of livestock, livestock products or agricultural, horticultural,
viticultural or floricultural crops or products in this State for the
construction, alteration, repair, improvement, movement, wrecking or demolition
or addition to or subtraction from any building, highway, road, excavation,
manufactured building or other structure, project, development or improvement
used directly and primarily to prevent, monitor, control or reduce air, water
or land pollution shall be exempt from the tax imposed under this Section.
(8) The gross proceeds of sales or gross income received from a post
construction contract to perform post-construction treatment of real property
for termite and general pest control, including wood destroying organisms,
shall be exempt from tax imposed under this Section.
(9) Through December 31, 2009, the gross proceeds of sales or gross
income received from a contract for constructing any lake facility development
in a commercial enhancement reuse district that is designated pursuant to
A.R.S. Section 9-499.08 if the contractor maintains the following records in a
form satisfactory to the Arizona Department of Revenue and to the city:
(A) The certificate of qualification of the lake
facility development issued by the city pursuant to A.R.S. Section 9-499.08,
Subsection D.
(B) All state and local transaction privilege
tax returns for the period of time during which the contractor received gross
proceeds of sales or gross income from a contract to construct a lake facility
development in a designated commercial enhancement reuse district, showing the
amount exempted from state and local taxation.
(C) Any other information considered to be
necessary.
(10) Any amount attributable to development fees that are incurred in
relation to the construction, development or improvement of real property and
paid by the taxpayer as defined in the Model City Tax Code or by a contractor
providing services to the taxpayer. For
the purposes of this paragraph:
(A) The attributable amount shall not exceed the
value of the development fees actually imposed.
(B) The attributable amount is equal to the
total amount of development fees paid by the taxpayer or by a contractor
providing services to the taxpayer and the total development fees credited in
exchange for the construction of, contribution to or dedication of real
property for providing public infrastructure, public safety or other public
services necessary to the development. The
real property must be the subject of the development fees.
(C) "Development fees" means fees
imposed to offset capital costs of providing public infrastructure, public
safety or other public services to a development and authorized pursuant to A.R.S.
Section 9-463.05, A.R.S. Section 11‑1102 or A.R.S. Title 48 regardless of
the jurisdiction to which the fees are paid.
(11) For taxable periods beginning from and after July 1, 2008 and
ending before January 1, 2017, the gross proceeds of sales or gross income
derived from a contract to provide and install a solar energy device. The contractor shall register with the Department
of Revenue as a solar energy contractor.
By registering, the contractor acknowledges that it will make its books
and records relating to sales of solar energy devices available to the Department
of Revenue and the City, as applicable, for examination.
(c) Subcontractor
means a construction contractor performing work for either:
(1) A construction contractor who has provided the subcontractor
with a written declaration that he is liable for the tax for the project and
has provided the subcontractor his City Privilege License number.
(2) An owner-builder who has provided the subcontractor with a
written declaration that:
(A) The owner-builder is improving the property
for sale; and
(B) The owner-builder is liable for the tax for
such construction contracting activity; and
(C) The owner-builder has provided the contractor
his City Privilege License number.
(3) A person selling new manufactured buildings who has provided the
subcontractor with a written declaration that he is liable for the tax for the
site preparation and set-up; and provided the subcontractor his City Privilege
License number.
Subcontractor also includes a
construction contractor performing work for another subcontractor as defined
above.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 90.25, 7-12-90; Ord. No. 93.37, 10-14-93; Ord. No. 95.03, 1-12-95;
Ord. No. 96.41, 10-24-96; Ord. No. 99.40, 12-16-99; Ord. No. 2000.37, 9‑14‑00;
Ord. No. 2007.20, 4-19-07; Ord. No. 2008.26, 8-14-08; Ord. No. 2010.09, 5-6-10;
Ord. No. 2011.31, 9-8-11)
Sec.
16-416. Construction
contracting—Speculative builders.
(a) The tax shall be equal to one and
eight-tenths percent (1.8%) of the gross income from the business activity upon
every person engaging or continuing in business as a speculative builder within
the City.
(1) The gross income of a speculative builder considered taxable
shall include the total selling price from the sale of improved real property
at the time of closing of escrow or transfer of title.
(2) "Improved real property" means any real property:
(A) Upon which a structure has been constructed;
or
(B) Where improvements have been made to land
containing no structure (such as paving or landscaping); or
(C) Which has been reconstructed as provided by
Regulation; or
(D) Where water, power, and streets have been
constructed to the property line.
(3) "Sale of improved real property" includes any form of
transaction, whether characterized as a lease or otherwise, which in substance
is a transfer of title of, or equitable ownership in, improved real property
and includes any lease of the property for a term of thirty (30) years or more
(with all options for renewal being included as a part of the term). In the case of multiple unit projects,
"sale" refers to the sale of the entire project or to the sale of any
individual parcel or unit.
(4) "Partially improved residential real property", as
used in this Section, means any improved real property, as defined in
subsection (a)(2) above, being developed for sale to individual homeowners,
where the construction of the residence upon such property is not substantially
complete at the time of the sale.
(b) Exclusions:
(1) In cases involving reconstruction contracting, the speculative
builder may exclude from gross income the prior value allowed for
reconstruction contracting in determining his taxable gross income, as provided
by Regulation.
(2) Neither the cost nor the fair market value of the land which
constitutes part of the improved real property sold may be excluded or deducted
from gross income subject to the tax imposed by this Section.
(3) Reserved.
(4) A speculative builder may exclude gross
income from the sale of partially improved residential real property as defined
in subsection (a)(4) above to another speculative builder only if all of the
following conditions are satisfied:
(A) The speculative builder purchasing the
partially improved residential real property has a valid City Privilege License
for construction contracting as a speculative builder; and
(B) At the time of the transaction, the
purchaser provides the seller with a properly completed written declaration
that the purchaser assumes liability for and will pay all privilege taxes which
would otherwise be due the City at the time of sale of the partially improved
residential real property; and
(C)
The seller also:
(i) Maintains proper records of such
transactions in a manner similar to the requirements provided in this Chapter
relating to sales for resale; and
(ii) Retains a copy of the written declaration
provided by the buyer for the transaction; and
(iii) Is properly licensed with the City as a
speculative builder and provides the City with the written declaration attached
to the City privilege tax return where he claims the exclusion.
(5) For taxable periods beginning from and
after July 1, 2008, the portion of gross proceeds of sales or gross income
attributable to the actual direct costs of providing architectural or
engineering services that are incorporated in a contract is not subject to tax
under this Section. For purposes of this
subsection, "direct costs" means the portion of the actual costs that
are directly expended in providing architectural or engineering services.
(c) Tax liability for speculative builders
occurs at close of escrow or transfer of title, whichever occurs earlier, and
is subject to the following provisions relating to exemptions, deductions and
tax credits:
(1) Exemptions.
(A) The gross proceeds of sales or gross income
attributable to the purchase of machinery, equipment or other tangible personal
property that is exempt from or deductible from Privilege or Use Tax under:
(i) Section 16-465, subsections (g) and (p)
(ii) Section 16-660, subsections (g) and (p)
shall be
exempt or deductible, respectively, from the tax imposed by this Section.
(B) The gross proceeds of sales or gross income
received from a contract for the construction of an environmentally controlled
facility for the raising of poultry for the production of eggs and the sorting,
or cooling and packaging of eggs shall be exempt from the tax imposed under
this Section.
(C) The gross proceeds of sales or gross income
that is derived from the installation, assembly, repair or maintenance of clean
rooms that are deducted from the tax base of the retail classification pursuant
to Section 16-465, subsection (g) shall be exempt from the tax imposed under
this Section.
(D) The gross proceeds of sales or gross income
that is derived from a contract entered into with a person who is engaged in
the commercial production of livestock, livestock products or agricultural,
horticultural, viticultural or floricultural crops or products in this State
for the construction, alteration, repair, improvement, movement, wrecking or
demolition or addition to or subtraction from any building, highway, road,
excavation, manufactured building or other structure, project, development or
improvement used directly and primarily to prevent, monitor, control or reduce
air, water or land pollution shall be exempt from the tax imposed under this
Section.
(E) Any amount attributable to development fees
that are incurred in relation to the construction, development or improvement
of real property and paid by the taxpayer as defined in the Model City Tax Code
or by a contractor providing services to the taxpayer shall be exempt from the
tax imposed under this Section. For the
purposes of this paragraph:
(i) The attributable amount shall not exceed
the value of the development fees actually imposed.
(ii) The attributable amount is equal to the total amount of
development fees paid by the taxpayer or by a contractor providing services to
the taxpayer and the total development fees credited in exchange for the
construction of, contribution to or dedication of real property for providing
public infrastructure, public safety or other public services necessary to the
development. The real property must be
the subject of the development fees.
(iii) "Development fees" means fees
imposed to offset capital costs of providing public infrastructure, public
safety or other public services to a development and authorized pursuant to A.R.S.
Section 9‑463.05, A.R.S. Section 11-1102 or A.R.S. Title 48 regardless of
the jurisdiction to which the fees are paid.
(2) Deductions.
(A) All amounts subject to the tax shall be
allowed a deduction in the amount of thirty-five percent (35%).
(B) The gross proceeds of sales or gross income
that is derived from a contract entered into for the installation, assembly,
repair or maintenance of income-producing capital equipment, as defined in
Section 16-110, that is deducted from the retail classification pursuant to
Section 16-465(g), that does not become a permanent attachment to a building,
highway, road, railroad, excavation or manufactured building or other
structure, project, development or improvement shall be exempt from the tax
imposed by this Section. If the
ownership of the realty is separate from the ownership of the income-producing
capital equipment, the determination as to permanent attachment shall be made
as if the ownership was the same. The
deduction provided in this paragraph does not include gross proceeds of sales
or gross income from that portion of any contracting activity which consists of
the development of, or modification to, real property in order to facilitate
the installation, assembly, repair, maintenance or removal of the
income-producing capital equipment. For
purposes of this paragraph, "permanent attachment" means at least one
of the following:
(i)
To
be incorporated into real property.
(ii) To become so affixed to real property that
it becomes part of the real property.
(iii) To be so attached to real property that
removal would cause substantial damage to the real property from which it is
removed.
(C) For taxable periods beginning from and after
July 1, 2008 and ending before January 1, 2017, the gross proceeds of sales or
gross income derived from a contract to provide and install a solar energy
device. The contractor shall register
with the Department of Revenue as a solar energy
contractor. By registering, the
contractor acknowledges that it will make its books and records relating to
sales of solar energy devices available to the Department of Revenue and the City,
as applicable, for examination.
(3) Tax Credits.
The following tax credits are
available to owner-builders or speculative builders, not to exceed the tax
liability against which such credits apply, provided such credits are
documented to the satisfaction of the Tax Collector.
(A) A tax credit equal to the amount of City
Privilege or Use Tax, or the equivalent excise tax, paid directly to a taxing
jurisdiction or as a separately itemized charge paid directly to the vendor
with respect to the tangible personal property incorporated into the said
structure or improvement to real property undertaken by the owner-builder or
speculative builder.
(B) A tax credit equal to the amount of
Privilege Taxes paid to this City, or charge separately to the speculative
builder, by a construction contractor, on the gross income derived by said
person from the construction of any improvement to the real property.
(C) No credits provided herein may be claimed
until such time that the gross income against which said credits apply is reported.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 88.32, § 1(7), 4-28-88; Ord. No. 90.25, 7-12-90; Ord. No. 93.37,
10-14-93; Ord. No. 96.41, 10-24-96; Ord. No. 99.40, 12-16-99; Ord. No. 2000.37,
9‑14‑00; Ord. No. 2007.20, 4-19-07; Ord. No. 2008.26, 8-14-08; Ord.
No. 2010.09, 5-6-10; Ord. No. 2011.31, 9-8-11)
Sec.
16-417. Construction
contracting—Owner-builders who are not speculative builders.
(a) At the expiration of twenty-four (24)
months after improvement to the property is substantially complete, the tax
liability for an owner-builder who is not a speculative builder shall be at an
amount equal to one and eight-tenths percent (1.8%) of:
(1) The gross income from the activity of construction contracting
upon the real property in question which was realized by those construction
contractors to whom the owner-builder provided written declaration that they
were not responsible for the taxes as prescribed in subsection 16-415(c)(2);
and
(2) The purchase of tangible personal property for incorporation
into any improvement to real property, computed on the sales price.
(b) For taxable periods beginning from and
after July 1, 2008, the portion of gross proceeds of sales or gross income
attributable to the actual direct costs of providing architectural or
engineering services that are incorporated in a contract is not subject to tax
under this Section. For purposes of this subsection, "direct costs"
means the portion of the actual costs that are directly expended in providing
architectural or engineering services.
(c) The tax liability of this Section is
subject to the following provisions relating to exemptions, deductions and tax
credits:
(1) Exemptions.
(A) The gross proceeds of sales or gross income
attributable to the purchase of machinery, equipment or other tangible personal
property that is exempt from or deductible from Privilege or Use Tax under:
(i) Section 16-465, subsections (g) and (p)
(ii) Section 16-660, subsections (g) and (p)
shall be
exempt or deductible, respectively, from the tax imposed by this Section.
(B) The gross proceeds of sales or gross income
received from a contract for the construction of an environmentally controlled
facility for the raising of poultry for the production of eggs and the sorting,
or cooling and packaging of eggs shall be exempt from the tax imposed under
this Section.
(C) The gross proceeds of sales or gross income
that is derived from the installation, assembly, repair or maintenance of clean
rooms that are deducted from the tax base of the retail classification pursuant
to Section 16-465, subsection (g) shall be exempt from the tax imposed under
this Section.
(D) The gross proceeds of sales or gross income
that is derived from a contract entered into with a person who is engaged in
the commercial production of livestock, livestock products or agricultural,
horticultural, viticultural or floricultural crops or products in this State
for the construction, alteration, repair, improvement, movement, wrecking or
demolition or addition to or subtraction from any building, highway, road,
excavation, manufactured building or other structure, project, development or
improvement used directly and primarily to prevent, monitor, control or reduce
air, water or land pollution shall be exempt from the tax imposed under this
Section.
(E) Any amount attributable to development fees
that are incurred in relation to the construction, development or improvement
of real property and paid by the taxpayer as defined in the Model City Tax Code
or by a contractor providing services to the taxpayer shall be exempt from the
tax imposed under this Section. For the
purposes of this paragraph:
(i) The attributable amount shall not exceed
the value of the development fees actually imposed.
(ii) The attributable amount is equal to the
total amount of development fees paid by the taxpayer or by a contractor
providing services to the taxpayer and the total development fees credited in
exchange for the construction of, contribution to or dedication of real
property for providing public infrastructure, public safety or other public
services necessary to the development. The
real property must be the subject of the development fees.
(iii) "Development fees" means fees
imposed to offset capital costs of providing public infrastructure, public
safety or other public services to a development and authorized pursuant to A.R.S.
Section 9‑463.05, A.R.S. Section 11-1102 or A.R.S. Title 48 regardless of
the jurisdiction to which the fees are paid.
(2) Deductions.
(A) All amounts subject to the tax shall be
allowed a deduction in the amount of thirty-five percent (35%).
(B) The gross proceeds of sales or gross income
that is derived from a contract entered into for the installation, assembly,
repair or maintenance of income-producing capital equipment, as defined in
Section 16-110, that is deducted from the retail classification pursuant to
Section 16-465(g), that does not become a permanent attachment to a building,
highway, road, railroad, excavation or manufactured building or other
structure, project, development or improvement shall be exempt from the tax
imposed by this Section. If the
ownership of the realty is separate from the ownership of the income-producing
capital equipment, the determination as to permanent attachment shall be made
as if the ownership was the same. The
deduction provided in this paragraph does not include gross proceeds of sales
or gross income from that portion of any contracting activity which consists of
the development of, or modification to, real property in order to facilitate
the installation, assembly, repair, maintenance or removal of the
income-producing capital equipment. For
purposes of this paragraph, "permanent attachment" means at least one
of the following:
(i) To be incorporated into real property.
(ii) To become so affixed to real property that
it becomes part of the real property.
(iii) To be so attached to real property that
removal would cause substantial damage to the real property from which it is
removed.
(C) For taxable periods beginning from and after
July 1, 2008 and ending before January 1, 2017, the gross proceeds of sales or
gross income derived from a contract to provide and install a solar energy
device. The contractor shall register
with the Department of Revenue as a solar energy
contractor. By registering, the
contractor acknowledges that it will make its books and records relating to
sales of solar energy devices available to the Department of Revenue and the City,
as applicable, for examination.
(3) Tax Credits.
The following tax credits are
available to owner-builders and speculative builders, not to exceed the tax
liability against which such credits apply, provided such credits are
documented to the satisfaction of the Tax Collector.
(A) A tax credit equal to the amount of City
Privilege or Use Tax, or the equivalent excise tax, paid directly to a taxing
jurisdiction or as a separately itemized charge paid directly to the vendor
with respect to the tangible personal property incorporated into the said
structure or improvement to real property undertaken by the owner-builder or
speculative builder.
(B) A tax credit equal to the amount of
Privilege Taxes paid to this City, or charge separately to the speculative
builder, by a construction contractor, on the gross income derived by said
person from the construction of any improvement to the real property.
(C) No credits provided herein may be claimed
until such time that the gross income against which said credits apply is
reported.
(d) The limitation period for the assessment of
taxes imposed by this Section is measured based upon when such liability is
reportable, that is, in the reporting period that encompasses the twenty-fifth
(25th) month after said unit or project was substantially complete. Interest and penalties, as provided in
Section 16-540, will be based on reportable date.
(e) Reserved.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. No. 96.41, 10-24-96; Ord. No. 99.40, 12-16-99;
Ord. No. 2000.37, 9-14-00; Ord. No. 2007.20, 4-19-07; Ord. No. 2008.26, 8‑14-08;
Ord. No. 2010.09, 5-6-10; Ord. No. 2011.31, 9-8-11)
Sec. 16-418. Reserved.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 99.40, 12-16-99)
Sec.
16-420. Reserved.
(Ord. No. 87.17, § 1, 4-23-87)
Sec.
16-425. Job printing.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of job printing, which includes
engraving of printing plates, embossing, copying, micrographics, and photo
reproduction.
(b) The tax imposed by this Section shall not
apply to:
(1) Job printing purchased for the purpose of resale by the
purchaser in the form supplied by the job printer.
(2) Out-of-city sales.
(3) Out-of-state sales.
(4) Job printing of newspapers, magazines, or other periodicals or
publications for a person who is subject to the tax imposed by subsection
16-435(a) or an equivalent excise tax; provided further that said person is
properly licensed by the taxing jurisdiction at the location of publication.
(5) Sales of job printing to a qualifying hospital, qualifying
community health center or a qualifying health care organization, except when
the property sold is for use in activities resulting in gross income from
unrelated business income as that term is defined in 26 U.S.C. Section 512.
(6) Reserved.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 88.32, § 1(8), 4-28-88; Ord. No. 93.37, 10-14-93; Ord. No. 95.03,
1-12-95; Ord. No. 96.41, 10-24-96; Ord. No. 98.37, 06-25-98; Ord. No. 2000.37,
9‑14‑00; Ord. No. 2010.20, 6-24-10)
Sec.
16-427. Manufactured buildings.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income, including site preparation, moving to the
site, and/or set‑up, upon every person engaging or continuing in the
business activity of selling manufactured buildings within the City. Such
business activity is deemed to occur at the business location of the seller
where the purchaser first entered into the contract to purchase the
manufactured building.
(b) Sales of used manufactured buildings are
not taxable.
(c) The sale prices of furniture, furnishings,
fixtures, appliances, and attachments that are not incorporated as component
parts of or attached to a manufactured building are exempt from the tax imposed
by this Section. Sales of such items are
subject to the tax under Section 16‑460.
(d) Under this Section, a trade‑in will
not be allowed for the purpose of reducing the tax liability.
(Ord. No. 95.03, 1-12-95; Ord.
No. 96.41, 10-24-96; Ord. No. 2000.37, 9-14-00; Ord. No. 2010.20, 6-24-10)
Sec.
16-430. Timbering and other extraction.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the following businesses:
(1) Felling, producing, or preparing timber or any product of the
forest for sale, profit, or commercial use.
(2) Extracting, refining, or producing any oil or natural gas for
sale, profit, or commercial use.
(b) The rate specified in subsection (a) above
shall be applied to the value of the entire product extracted, refined,
produced, or prepared for sale, profit, or commercial use, when such activity
occurs within the City, regardless of the place of sale of the product or the
fact that delivery may be made to a point without the City or without the
State.
(c) If
any person engaging in any business classified in this Section ships or
transports products, or any part thereof, out of the State without making sale
of such products, or ships his products outside of the State in an unfinished
condition, the value of the products or articles in the condition or form in
which they existed when transported out-of-state and before they enter
interstate commerce shall be the basis for assessment of the tax imposed by
this Section.
(d) Reserved.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. No. 95.03, 1-12-95; Ord. No. 96.41, 10-24-96;
Ord. No. 2000.37, 9-14-00; Ord. No. 2010.20, 6-24-10)
Sec.
16-432. Mining.
(a) The tax rate shall be at an amount equal to
one tenth of one percent (.1%), not to exceed one tenth of one percent, of the
gross income from the business activity upon every person engaging or
continuing in the business of mining, smelting, or producing for sale, profit,
or commercial use any copper, gold, silver, or other mineral product, compound,
or combination of mineral products; but not including the extraction, removal,
or production of sand, gravel, or rock from the ground for sale, profit, or
commercial use.
(b) The rate specified in subsection (a) above
shall be applied to the value of the entire product mined, smelted or produced
for sale, profit, or commercial use, when such activity occurs within the City,
regardless of the place of sale of the product or the fact that delivery may be
made to a point without the City or without the State.
(c) If any person engaging in any business
classified in this Section ships or transports products, or any part thereof,
out of the State without making sale of such products, or ships his products
outside of the State in an unfinished condition, the value of the products or
articles in the condition or form in which they existed when transported
out-of-state and before they enter interstate commerce shall be the basis for
assessment of the tax imposed by this Section.
(Ord. No. 95.03, 1-12-95)
Sec.
16-435. Publishing and periodicals
distribution.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business activity of:
(1) Publication of newspapers, magazines, or other periodicals when
published within the City, measured by the gross income derived from notices,
subscriptions, and local advertising as defined in Section 16-405. In cases where the location of publication is
both within and without this State, gross income subject to the tax shall refer
only to gross income derived from residents of this State or generated by
permanent business locations within this State.
(2) Distribution or delivery within the City of newspapers,
magazines, or other periodicals not published within the City, measured by the
gross income derived from subscriptions.
(b) "Location of publication" is
determined by:
(1) Location of the editorial offices of the publisher, when the
physical printing is not performed by the publisher; or
(2) Location of either the editorial offices or the printing
facilities, if the publisher performs his own physical printing.
(c) "Subscription income" shall
include all circulation revenue of the publisher except amounts retained by or
credited to carriers or other vendors as compensation for delivery within the
State by such carriers or vendors, and further except sales of published items,
directly or through distributors, for the purpose of resale, to retailers
subject to the Privilege Tax on such resale.
(d) "Circulation", for the purpose of
measurement of gross income subject to the tax, shall be considered to occur at
the place of delivery of the published items to the subscriber or intended
reader irrespective of the location of the physical facilities or personnel of
the publisher. However, delivery by the
(e) Allocation
of taxes between cities and towns. In cases where publication or
distribution occurs in more than one city or town, the measurement of gross
income subject to tax by the City shall include:
(1) That portion of the gross income from publication which reflects
the ratio of circulation within this City to circulation in all incorporated
cities and towns in this State having substantially similar provisions; plus
(2) Only when publication occurs within the City, that portion of
the remaining gross income from publication which reflects the ratio of
circulation within this City to the total circulation of all incorporated
cities or towns in this State within which cities the taxpayer maintains a
location of publication.
(f) The tax imposed by this Section shall not
apply to sales of newspapers, magazines or other periodicals to a qualifying
hospital, qualifying community health center or a qualifying health care
organization, except when the property sold is for use in activities resulting
in gross income from unrelated business income as that term is defined in 26
U.S.C. Section 512.
(Ord. No. 87.17, § 1, 4-23-87; Ord.
No. 88.32, 1(9), 4-28-88; Ord. No. 93.37, 10-14-93; Ord. No. 96.41, 10-24-96;
Ord. No. 98.37, 06-25-98; Ord. No. 2000.37, 9-14-00; Ord. No. 2010.20, 6-24-10)
Sec.
16-440. Reserved.
(Ord. No. 87.17, § 1, 4-23-87)
Sec.
16-444. Hotels.
The
tax rate shall be at an amount equal to two percent (2%) of the gross income
from the business activity upon every person engaging or continuing in the
business of operating a hotel charging for lodging and/or lodging space
furnished to any:
(a) Person.
(b) Exclusions. The tax imposed by this Section shall not
include:
(1) Income derived from incarcerating or
detaining prisoners who are under the jurisdiction of the
(2) Gross proceeds of sales or gross income that is properly included in another business activity under this article and that is taxable to the person engaged in that business activity, but the gross proceeds of sales or gross income to be deducted shall not exceed the consideration paid to the person conducting the activity.
(3) Gross proceeds of sales or gross income from transactions or activities that are not limited to transients that would not be taxable if engaged in by a person not subject to tax under this article.
(4) Gross proceeds of sales or gross income from transactions or activities that are not limited to transients and that would not be taxable if engaged in by a person subject to taxation under Section 16-410 or Section 16-475 due to an exclusion, exemption or deduction.
(5) Gross proceeds of sales or gross income from commissions received from a person providing services or property to the customers of the hotel. However, such commissions may be subject to tax under Section 16-445 or Section 16-450 as rental, leasing or licensing for use of real or tangible personal property.
(6) Income from providing telephone, fax or internet services to customers at an additional charge, that is separately stated to the customer and is separately maintained in the hotel’s books and records. However, such gross proceeds of sales or gross income may be subject to tax under Section 16-470 as telecommunication services.
(Ord. No. 90.25, 7-12-90; Ord.
No. 93.37, 10-14-93; Ord. No. 96.41, 10-24-96; Ord. No. 99.40, 12-16-99; Ord.
No. 2000.37, 9-14-00; Ord. No. 2007.20, 4-19-07; Ord. No. 2010.20, 6-24-10)
Sec.
16-445. Rental, leasing, and licensing
for use of real property.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of leasing, or renting real
property located within the City for a consideration, to the tenant in actual
possession, or the licensing for use of real property to the final licensee
located within the City for a consideration, including any improvements,
rights, or interest in such property; provided further that:
(1) Payments made by the lessee to, or on behalf of, the lessor for
property taxes, repairs, or improvements are considered to be part of the
taxable gross income.
(2) Charges for such items as telecommunications, utilities, pet
fees, or maintenance are considered to be part of the taxable gross income.
(3) However, if the lessor engages in telecommunication activity, as
evidenced by installing individual metering equipment and by billing each
tenant based upon actual usage, such activity is taxable under Section 16-470.
(b) If individual utility meters have been
installed for each tenant and the lessor separately charges each single tenant
for the exact billing from the utility company, such charges are exempt.
(c) Charges by a qualifying hospital, qualifying
community health center or a qualifying health care organization to patients of
such facilities for use of rooms or other real property during the course of
their treatment by such facilities are exempt.
(d) Charges for joint pole usage by a person
engaged in the business of providing or furnishing utility or telecommunication
services to another person engaged in the business of providing or furnishing
utility or telecommunication services are exempt from the tax imposed by this
Section.
(e) Exempt from the tax imposed by this Section
is gross income derived from the rental, leasing, or licensing for use of real
property to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property so rented,
leased, or licensed is for use in activities resulting in gross income from
unrelated business income as that term is defined in 26 U.S.C. Section 512.
(f) Reserved.
(g) Reserved.
(h) Reserved.
(i) Reserved.
(j) Exempt from the tax imposed by this
Section is gross income derived from the activities taxable under Section
16-444 of this code.
(k) Reserved.
(l) Reserved.
(m) Reserved.
(n) Notwithstanding the provisions of Section
16-200(b), the fair market value of one (1) apartment, in an apartment complex
provided rent free to an employee of the apartment complex is not subject to
the tax imposed by this Section. For an
apartment complex with more than fifty (50) units, an additional apartment
provided rent free to an employee for every additional fifty (50) units is not
subject to the tax imposed by this Section.
(o) Income derived from incarcerating or
detaining prisoners who are under the jurisdiction of the
(p) Charges by any hospital, any licensed nursing care institution,
or any kidney dialysis facility to patients of such facilities for the use of
rooms or other real property during the course of their treatment by such
facilities are exempt.
(q)
Charges to patients receiving "personal
care" or "directed
care", by
any licensed assisted living facility, licensed assisted living center or
licensed assisted living home as defined and licensed pursuant to Chapter 4,
Title 36, Arizona Revised Statutes and Title 9 of the Arizona Administrative
Code are exempt.
(r)
Income received from the rental of any "low-income
unit" as
established under Section 42 of the Internal Revenue Code, including the
low-income housing credit provided by IRC Section 42, to the extent that the
collection of tax on rental income causes the "gross rent" defined by IRC Section 42 to exceed the
income limitation for the low-income unit is exempt. This exemption also applies to income
received from the rental of individual rental units subject to statutory or
regulatory "low-income
unit" rent
restrictions similar to IRC Section 42 to the extent that the collection of tax
from the tenant causes the rental receipts to exceed a rent restriction for the
low-income unit. This subsection also
applies to rent received by a person other than the owner or lessor of the
low-income unit, including a broker. This
subsection does not apply unless a taxpayer maintains the documentation to
support the qualification of a unit as a low-income unit, the "gross
rent"
limitation for the unit and the rent received from that unit.
(s)
The
gross proceeds of sales or gross income derived from a commercial lease in
which a reciprocal insurer or a corporation leases real property to an
affiliated corporation. For the purposes
of this paragraph:
(1)
"Affiliated
corporation" means a corporation that meets one of the following conditions:
(A) The corporation owns or controls
at least eighty percent of the lessor.
(B) The corporation is at least
eighty percent owned or controlled by the lessor.
(C) The corporation is at least
eighty percent owned or controlled by a corporation that also owns or controls
at least eighty percent of the lessor.
(D) The corporation is at least
eighty percent owned or controlled by a reciprocal insurer.
(2)
For
the purposes of subsection (1), ownership and control are determined by reference
to the voting shares of a corporation.
(3)
"Reciprocal
insurer" has the same meaning as prescribed in A.R.S. Section 20‑762.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 90.25, 7-12-90; Ord. No. 93.37, 10-14-93; Ord. No. 95.03, 1-12-95;
Ord. No. 96.41, 10-24-96; Ord. No. 98.37, 06-25-98; Ord. No. 99.40, 12-16-99;
Ord. No. 2000.37, 9-14-00; Ord. No. 2006.44, 6-15-06; Ord. No. 2007.20, 4-19-07;
Ord. No. 2010.20, 6-24-10; Ord. No. 2011.31, 9-8-11)
Sec.
16-446. Reserved.
(Ord. No. 88.32, § 1(10),
4-28-88)
Sec. 16-447. Rental, leasing, and licensing for use of
real property—Additional tax upon transient lodging.
In
addition to the taxes levied as provided in Section 16-444, there is hereby
levied and shall be collected an additional tax in an amount equal to five
percent (5%) of the gross income from the business activity of any hotel
engaging or continuing within the City in the business of charging for lodging
and/or lodging space furnished to any transient.
(Ord. No. 88.33, § 1, 4-28-88;
Ord. No. 90.25, 7-12-90; Ord. No. 2002.46, 11-21-02; Ord. No. 2007.20, 4-19-07;
Ord. No. 2010.10, 5-6-10)
Sec.
16-450. Rental, leasing, and licensing
for use of tangible personal property.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of leasing, licensing for use, or
renting tangible personal property for a consideration, including that which is
semi‑permanently or permanently installed within the City as provided by
Regulation.
(b) Special
provisions relating to long term motor vehicle leases. A lease transaction
involving a motor vehicle for a minimum period of twenty-four (24) months shall
be considered to have occurred at the location of the motor vehicle dealership,
rather than the location of the place of business of the lessor, even if the
lessor's interest in the lease and its proceeds are sold, transferred, or
otherwise assigned to a lease financing institution; provided further that the
city or town where such motor vehicle dealership is located levies a Privilege
Tax or an equivalent excise tax upon the transaction.
(c) Gross income derived from the following
transactions shall be exempt from Privilege Taxes imposed by this Section:
(1) Rental, leasing, or licensing for use of tangible personal
property to persons engaged or continuing in the business of leasing, licensing
for use, or rental of such property.
(2) Rental, leasing, or licensing for use of tangible personal
property that is semi‑permanently or permanently installed within another
city or town that levies an equivalent excise tax on the transaction.
(3) Rental, leasing, or licensing for use of film, tape, or slides
to a theater or other person taxed under Section 16-410, or to a radio station,
television station, or subscription television system.
(4) Rental, leasing, or licensing for use of the following:
(A) Prosthetics.
(B) Income-producing
capital equipment.
(C) Mining and metallurgical supplies.
These exemptions
include the rental, leasing, or licensing for use of tangible personal property
which, if it had been purchased instead of leased, rented, or licensed by the
lessee or licensee, would qualify as income-producing capital equipment or
mining and metallurgical supplies.
(5) Rental, leasing, or licensing for use of tangible personal
property to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property so rented,
leased, or licensed is for use in activities resulting in gross income from
unrelated business income as that term is defined in 26 U.S.C. Section 512 or
rental, leasing, or licensing for use of tangible personal property in this
State by a nonprofit charitable organization that has qualified under Section
501(c)(3) of the United States Internal Revenue Code and that engages in and
uses such property exclusively for training, job placement or rehabilitation
programs or testing for mentally or physically handicapped persons.
(6) Separately billed charges for delivery, installation, repair,
and/or maintenance as provided by Regulation.
(7) Charges for joint pole usage by a person engaged in the business
of providing or furnishing utility or telecommunication services to another
person engaged in the business of providing or furnishing utility or
telecommunication services.
(8) Reserved.
(9) Rental, leasing, or licensing of aircraft that would qualify as
aircraft acquired for use outside the State, as prescribed by Regulation, if
such rental, leasing, or licensing had been a sale.
(10) Rental, leasing or licensing for use of an alternative fuel vehicle
if such vehicle was manufactured as a diesel fuel vehicle and converted to
operate on alternative fuel and equipment that is installed in a conventional
diesel fuel motor vehicle to convert the vehicle to operate on an alternative
fuel, as defined in A.R.S. Section 1-215.
(11) Rental, leasing, and licensing for use of solar energy devices,
for taxable periods beginning from and after July 1, 2008. The lessor shall register with the Department
of Revenue as a solar energy retailer.
By registering, the lessor acknowledges that it will make its books and
records relating to leases of solar energy devices available to the Department
of Revenue and city, as applicable, for examination.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. No. 95.03, 1-12-95: Ord. No. 96.41, 10-24-96;
Ord. No. 98.37, 6-25-98; Ord. No. 99.40, 12-16-99; Ord. No. 2000.37, 9‑14‑00;
Ord. No. 2001.16, 7-26-01; Ord. No. 2007.20, 4-19-07; Ord. No. 2010.09, 5-6-10;
Ord. No. 2010.20, 6-24-10)
Sec.
16-452. Reserved.
(Ord. No. 90.25, 7-12-90)
Sec.
16-455. Restaurants and bars.
(a) The tax rate shall be at an amount equal to
two percent (2%) of the gross income from the business activity upon every
person engaging or continuing in the business of preparing or serving food or
beverage in a bar, cocktail lounge, restaurant, or similar establishment where
articles of food or drink are prepared or served for consumption on or off the
premises, including also the activity of catering. Cover charges and minimum charges must be
included in the gross income of this business activity.
(b) Caterers and other taxpayers subject to the
tax who deliver food and/or serve such food off premises shall also be allowed
to exclude separately charged delivery, set-up, and clean-up charges, provided
that the charges are also maintained separately in the books and records. When
a taxpayer delivers food and/or serves such food off premises, his regular
business location shall still be deemed the location of the transaction for the
purposes of the tax imposed by this Section.
(c) The tax imposed by this Section shall not
apply to sales to a qualifying hospital, qualifying community health center or
a qualifying health care organization, except when sold for use in activities
resulting in gross income from unrelated business income as that term is
defined in 26 U.S.C. Section 512.
(d) The tax imposed by this Section shall not
apply to sales of food, beverages, condiments and accessories used for serving
food and beverages to a commercial airline, as defined in A.R.S. Section 42-5061(A)(49), that serves the
food and beverages to its passengers, without additional charge, for consumption
in flight.
(e) The tax imposed by this Section shall not
apply to sales of prepared food, beverages, condiments or accessories to a
public educational entity, pursuant to any of the provisions of Title 15,
Arizona Revised Statutes, to the extent such items are to be prepared or served
to individuals for consumption on the premises of a public educational entity
during school hours.
(f) For the purposes of this Section,
"accessories" means paper plates, plastic eating utensils, napkins,
paper cups, drinking straws, paper sacks or other disposable containers, or
other items which facilitate the consumption of the food.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 88.32, § 1(11), 4-28-88; Ord. No. 93.37, 10-14-93; Ord. No. 96.41,
10-24-96; Ord. No. 98.37, 6-25-98; Ord. No. 2000.37, 9-14-00; Ord. No. 2007.20,
4‑19-07; Ord. No. 2010.20, 6-24-10)
Sec.
16-460. Retail sales—Measure of tax;
burden of proof; exclusions.
(a) The
tax rate shall be at an amount equal to two percent (2%) of the gross income
from the business activity upon every person engaging or continuing in the
business of selling tangible personal property at retail, except that the tax
rate shall be at an amount equal to one and eight-tenths percent (1.8%) of the
gross income from the business activity upon every person engaging or
continuing in the business of selling food for home consumption.
(b) The burden of proving that a sale of
tangible personal property is not a taxable retail sale shall be upon the
person who made the sale.
(c) Exclusions. For the purposes of this Chapter, sales of
tangible personal property shall not include:
(1) Sales of stocks, bonds, options, or other similar materials.
(2) Sales of lottery tickets or shares pursuant to Article I,
Chapter 5, Title 5, Arizona Revised Statutes.
(3) Sales of platinum, bullion, or monetized bullion, except minted
or manufactured coins transferred or acquired primarily for their numismatic
value as prescribed by Regulation.
(4) Gross income derived from the transfer of tangible personal
property which is specifically included as the gross income of a business
activity upon which another Section of this Article imposes a tax, shall be
considered gross income of that business activity, and are not includable as
gross income subject to the tax imposed by this Section.
(5) Sales by professional or personal service occupations where such
sales are inconsequential elements of the service provided.
(d) Reserved.
(e) When this City and another Arizona city or
town with an equivalent excise tax could claim nexus for taxing a retail sale,
the city or town where the permanent business location of the seller at which
the order was received shall be deemed to have precedence, and for the purposes
of this Chapter such city or town has sole and exclusive right to such tax.
(f) The appropriate tax liability for any
retail sales where the order is received at a permanent business location of
the seller located in this City or in an
(g) Retail sales of prepaid calling cards or
prepaid authorization numbers for telecommunications services, including sales
of reauthorization of a prepaid card or authorization number, are subject to
tax under this Section.
(Ord. No. 87.17, § 1, 4-23-87;
Ord. No. 93.37, 10-14-93; Ord. No. 96.41, 10-24-96; Ord. No. 96.43, 12-12-96;
Ord. No. 99.40, 12-16-99; Ord. No. 2000.37, 9-14-00; Ord. No. 2010.20, 6‑24‑10)
Sec.
16-465. Retail sales—Exemptions.
Income
derived from the following sources is exempt from the tax imposed by Section 16‑460:
(a) Sales
of tangible personal property to a person regularly engaged in the business of
selling such property.
(b) Out-of-city
sales or out-of-state sales.
(c) Charges
for delivery, installation, or other direct customer services as prescribed by
Regulation.
(d) Charges
for repair services as prescribed by Regulation, when separately charged and
separately maintained in the books and records of the taxpayer.
(e) Sales
of warranty, maintenance, and service contracts, when separately charged and
separately maintained in the books and records of the taxpayer.
(f) Sales
of prosthetics.
(g) Sales
of income-producing capital equipment.
(h) Sales
of rental equipment and rental supplies.
(i) Sales
of mining and metallurgical supplies.
(j) Sales
of motor vehicle fuel and use fuel which are subject to a tax imposed under the
provisions of Article I or II, Chapter 16, Title 28, Arizona Revised Statutes;
or sales of use fuel to a holder of a valid single trip use fuel tax permit
issued under A.R.S. Section 28‑5739, or sales of natural gas or liquefied
petroleum gas used to propel a motor vehicle.
(k) Sales
of tangible personal property to a construction contractor who holds a valid
Privilege Tax License for engaging or continuing in the business of
construction contracting where the tangible personal property sold is
incorporated into any structure or improvement to real property as part of
construction contracting activity.
(l) Sales
of motor vehicles to nonresidents of this State for use outside this State if
the vendor ships or delivers the motor vehicle to a destination outside this
State.
(m) Sales of tangible personal property which
directly enters into and becomes an ingredient or component part of a product
sold in the regular course of the business of job printing, manufacturing, or
publication of newspapers, magazines, or other periodicals. Tangible personal
property which is consumed or used up in a manufacturing, job printing,
publishing, or production process is not an ingredient nor component part of a
product.
(n) Sales
made directly to the Federal government to the extent of:
(1) One hundred percent (100%) of the gross income derived from
retail sales made by a manufacturer, modifier, assembler, or repairer.
(2) Fifty percent (50%) of the gross income derived from retail
sales made by any other person.
(o) Sales
to hotels, bars, restaurants, dining cars, lunchrooms, boarding houses, or
similar establishments of articles consumed as food, drink, or condiment,
whether simple, mixed, or compounded, where such articles are customarily
prepared or served to patrons for consumption on or off the premises, where the
purchaser is properly licensed and paying a tax under Section 16-455 or the
equivalent excise tax upon such income.
(p) Sales
of tangible personal property to a qualifying hospital, qualifying community
health center or a qualifying health care organization, except when the
property sold is for use in activities resulting in gross income from unrelated
business income as that term is defined in 26 U.S.C. Section 512 or sales of
tangible personal property purchased in this State by a nonprofit charitable organization
that has qualified under Section 501(c)(3) of the United States Internal
Revenue Code and that engages in and uses such property exclusively for
training, job placement or rehabilitation programs or testing for mentally or
physically handicapped persons.
(q) Food
purchased with food stamps provided through the Food Stamp Program established
by the Food Stamp Act of 1977 (P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011
et seq.) or purchased with food instruments issued under Section 17 of the Child
Nutrition Act (P.L. 95-627; 92 Stat. 3603; and P.L. 99-669; Section 4302; 42
United States Code Section 1786) but only to the extent that food stamps or
food instruments were actually used to purchase such food.
(r) Reserved.
(1) Reserved.
(2) Reserved.
(3) Reserved.
(4) Reserved.
(s) Sales
of groundwater measuring devices required by A.R.S. Section 45-604.
(t) Sales
of paintings, sculptures or similar works of fine art, provided that such works
of fine art are sold by the original artist; and provided further that sales of
"art creations", such as jewelry, macrame, glasswork, pottery,
woodwork, metalwork, furniture, and clothing, when such "art
creations" have a dual purpose, both aesthetic and utilitarian, are not
exempt, whether sold by the artist or by another.