Page
1, before line 1, insert:
Page 2, line 33, strike "entered into"
Line 34, after “is” insert "EITHER"
Line 35, strike "pursuant to" insert "under"
Line 36, strike the first comma; strike "pursuant to"
insert "under"
Line 37, after "B" strike remainder of the line
Strike lines 38 through 45
Page 3, strike lines 1 through 5, insert "AND THAT HAS INDEPENDENT FUNCTIONAL UTILITY, PURSUANT
TO THE FOLLOWING PROVISIONS:
(a) THE DEDUCTION PROVIDED IN THIS PARAGRAPH
INCLUDES THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM ALL OF THE
FOLLOWING:
(i) ANY ACTIVITY PERFORMED ON MACHINERY,
EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL
UTILITY.
(ii) ANY ACTIVITY PERFORMED ON ANY TANGIBLE
PERSONAL PROPERTY RELATING TO MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL
PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY IN FURTHERANCE OF ANY OF THE
PURPOSES PROVIDED FOR UNDER SUBDIVISION (d) OF THIS PARAGRAPH.
(iii) ANY ACTIVITY THAT IS RELATED TO THE
ACTIVITIES DESCRIBED IN SUBDIVISION (a), ITEMS (i) AND (ii) OF THIS PARAGRAPH, INCLUDING, BUT NOT LIMITED TO,
INSPECTING THE INSTALLATION OF, OR TESTING, THE MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PERSONAL PROPERTY.
(b) THE DEDUCTION PROVIDED IN THIS PARAGRAPH
DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THE PORTION OF
ANY CONTRACTING ACTIVITY THAT CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION
TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR,
MAINTENANCE OR REMOVAL OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL
PROPERTY THAT IS EITHER DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION
UNDER SECTION 42-5061, SUBSECTION B OR EXEMPT FROM USE TAX UNDER SECTION
42-5159, SUBSECTION B.
(c) THE DEDUCTION PROVIDED IN THIS PARAGRAPH
SHALL BE DETERMINED WITHOUT REGARD TO THE SIZE OR USEFUL LIFE OF THE MACHINERY,
EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY."
Reletter to conform
Page 3, line 6, after “(a)” insert “FOR THE PURPOSES OF THIS PARAGRAPH,"
Page 1, strike lines 10 through 27, insert:
Strike lines 23 through 30
Page 13, line 39, strike "ENTERED INTO"
Line 40, strike "THAT IS DEDUCTED"
Line 41, strike "FROM THE TAX BASE OF
THE RETAIL CLASSIFICATION PURSUANT TO" insert "DESCRIBED IN"; strike the comma
Line 42, after "B" strike
remainder of line
Strike lines 43, 44 and 45
Page 14, strike lines 1 through 14, insert: "AND THAT HAS INDEPENDENT FUNCTIONAL UTILITY, PURSUANT TO THE
FOLLOWING PROVISIONS:
(a) THE DEDUCTION PROVIDED IN THIS PARAGRAPH
INCLUDES THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM ALL OF THE
FOLLOWING:
(i) ANY ACTIVITY PERFORMED ON MACHINERY,
EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL
UTILITY.
(ii) ANY ACTIVITY PERFORMED ON ANY TANGIBLE
PERSONAL PROPERTY RELATING TO MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL
PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY IN FURTHERANCE OF ANY OF THE
PURPOSES PROVIDED FOR UNDER SUBDIVISION (d) OF THIS PARAGRAPH.
(iii) ANY ACTIVITY THAT IS RELATED TO THE
ACTIVITIES DESCRIBED IN SUBDIVISION (a), ITEMS (i) AND (ii) OF THIS PARAGRAPH, INCLUDING, BUT NOT LIMITED TO,
INSPECTING THE INSTALLATION OF, OR TESTING, THE MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PERSONAL PROPERTY.
(b) THE DEDUCTION PROVIDED IN THIS PARAGRAPH
DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THE PORTION OF ANY
CONTRACTING ACTIVITY THAT CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO,
REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR,
MAINTENANCE OR REMOVAL OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL
PROPERTY described in SECTION 42-5061, SUBSECTION B.
(c) tHE DEDUCTION PROVIDED IN THIS PARAGRAPH
SHALL BE DETERMINED WITHOUT REGARD TO THE SIZE OR USEFUL LIFE OF THE MACHINERY,
EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY.
(d) for the purposes of this paragraph,
"independent functional utility" means that the machinery, EQUIPMENT
or other tangible personal property can independently perform its function
without attachment to real property, other than attachment for any of the
following purposes:
(i) assembling the machinery, equipment or
other tangible personal property.
(ii) connecting items of machinery, equipment or
other tangible personal property to each other.
(iii) connecting the machinery, equipment or
other tangible personal property, whether as an individual item or as a system
of items, to water, power, gas, communication or other services.
(iv) stabilizing or protecting the machinery,
equipment or other tangible personal property during operation by bolting,
burying or performing other dissimilar nonpermanent connections to either real
property or real property improvements."
Page 2, strike lines 1 and 2, insert:
Page 15, strike lines 29 through 34, insert:
"It is the intent of the legislature in amending the
provisions of section 42-5075, subsection B, paragraph 7 and section 42-6004,
subsection A, paragraph 13, Arizona Revised Statutes, as specified in this act,
that the benefit of the retail transaction privilege tax deductions provided
under section 42-5061, subsection B, Arizona Revised Statutes, and the use tax
exemptions under section 42-5159, subsection B, Arizona Revised Statutes,
should not be diminished through the activity of contracting. To the extent
that such intent was not achieved by Laws 1996, chapter 319, this act
effectuates the intent and redresses or cures any resulting unintended
consequences, beginning from and after June 30, 1997."
Line 4, strike "of" insert "or"
Between lines 4 and 5, insert:
Page 16, after line 7 insert:
"E. This section does not extend the statute of
limitations for assessment or refund beyond that which is open under sections
42-1104 and 42-1106, Arizona Revised Statutes.
Sec. 5. Savings
clause; prospective validity
If section 4 of this act, relating to retroactivity and refund,
is finally adjudicated to be invalid by an appellate court, the retroactive
application of section 3 of this act, relating to declaration of intent, is
void, such that section 3 of this act will only be applied prospectively
beginning from and after the effective date of this act."
Amend title to conform
Bill
Number: H.B. 2535