OLSON FLOOR AMENDMENT
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2535
(Reference to printed bill)
Page 2, strike lines 37 through 42, insert "subsection B, and that does not become a permanent attachment to a building, highway, road, railroad, excavation or manufactured building or other structure, project, development or improvement. If the ownership of the realty is separate from the ownership of the machinery, equipment or tangible personal property, the determination as to permanent attachment shall be made as if the ownership were the same"
Line 43, strike "after installation"
Page 3, strike lines 5 through 25, insert "paragraph, :
(a) "independent functional utility" means that the machinery, equipment or other tangible personal property can substantially perform its function without attachment to real property. attachment to real property shall not be determined based on the size or useful life of the machinery, equipment or other tangible personal property and must include more than:
(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) bolting down or burying the machinery, equipment or other tangible personal property or otherwise affixing the machinery, equipment or other tangible personal property to real property or real property improvements to stabilize or protect the machinery, equipment or other tangible personal property during operation.
(b) "Permanent attachment" means at least one of the following, except that permanent attachment does not include machinery, equipment or other tangible personal property that has an independent functional utility:
(i) To be incorporated into real property.
(ii) To become so affixed to real property that it becomes a 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."
Page 11, after line 41, insert:
"Sec. 2. Section 42-6004, Arizona Revised Statutes, is amended to read:
42-6004. Exemption from municipal tax
A. A city, town or special taxing district shall not levy a transaction privilege, sales, use or other similar tax on:
1. Exhibition events in this state sponsored, conducted or operated by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the organization is associated with a major league baseball team or a national touring professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.
2. Interstate telecommunications services, which include that portion of telecommunications services, such as subscriber line service, allocable by federal law to interstate telecommunications service.
3. Sales of warranty or service contracts.
4. 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.
5. Interest on finance contracts.
6. Dealer documentation fees on the sales of motor vehicles.
7. Sales of food or other items purchased with United States department of agriculture food stamp coupons issued under the food stamp act of 1977 (P.L. 95‑113; 91 Stat. 958) or food instruments issued under section 17 of the child nutrition act (P.L. 95‑627; 92 Stat. 3603; P.L. 99‑661, section 4302; 42 United States Code section 1786) but may impose such a tax on other sales of food. If a city, town or special taxing district exempts sales of food from its tax or imposes a different transaction privilege rate on the gross proceeds of sales or gross income from sales of food and nonfood items, it shall use the definition of food prescribed by rule adopted by the department pursuant to section 42‑5106.
8. Sales of internet access services to the person's subscribers and customers. For the purposes of this paragraph:
(a) "Internet" means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio.
(b) "Internet access" means a service that enables users to access content, information, electronic mail or other services over the internet. Internet access does not include telecommunication services provided by a common carrier.
9. The gross proceeds of sales or gross income retained by the Arizona exposition and state fair board from ride ticket sales at the annual Arizona state fair.
10. Through August 31, 2014, sales of Arizona centennial medallions by the historical advisory commission.
11. 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:
(a) "Affiliated corporation" means a corporation that meets one of the following conditions:
(i) The corporation owns or controls at least eighty per cent of the lessor.
(ii) The corporation is at least eighty per cent owned or controlled by the lessor.
(iii) The corporation is at least eighty per cent owned or controlled by a corporation that also owns or controls at least eighty per cent of the lessor.
(iv) The corporation is at least eighty per cent owned or controlled by a corporation that is at least eighty per cent owned or controlled by a reciprocal insurer.
(b) For the purposes of subdivision (a) of this paragraph, ownership and control are determined by reference to the voting shares of a corporation.
(c) "Reciprocal insurer" has the same meaning prescribed in section 20‑762.
12. The gross proceeds of sales or gross income derived from a commercial lease in which a corporation leases real property to a corporation of which at least eighty per cent of the voting shares of each corporation are owned by the same shareholders.
13. The gross proceeds of sales or gross income derived from a contract entered into for the installation, assembly, repair or maintenance of machinery, equipment or other tangible personal property that is deducted from the tax base of the retail classification pursuant to section 42-5061, subsection b or that is exempt from use tax pursuant to section 42-5159, subsection b, and that does not become a permanent attachment to a building, highway, road, railroad, excavation or manufactured building or other structure, project, development or improvement. If the ownership of the realty is separate from the ownership of the machinery, equipment or other tangible personal property, the determination as to permanent attachment shall be made as if the ownership were the same. The deduction provided in this paragraph does not include gross proceeds of sales or gross income derived from that portion of any contracting activity that consists of the development of, or modification to, real property to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property that is deducted from the tax base of the retail classification pursuant to section 42-5061, subsection B or that is exempt from use tax pursuant to section 42-5159, subsection B. Machinery, equipment or other tangible personal property that has independent functional utility is not a permanent attachment. For the purposes of this paragraph, "permanent attachment" and "independent functional utility" have the same meanings prescribed in section 42-5075.
B. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on natural gas or liquefied petroleum gas used to propel a motor vehicle.
C. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from any of the following:
1. A motor carrier's use on the public highways in this state if the motor carrier is subject to a fee prescribed in title 28, chapter 16, article 4.
2. Leasing, renting or licensing a motor vehicle subject to and upon which the fee has been paid under title 28, chapter 16, article 4.
3. 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 title 28, chapter 16, article 4 and who is engaged in the business of leasing, renting or licensing such property.
4. Incarcerating or detaining in a privately operated prison, jail or detention facility prisoners who are under the jurisdiction of the United States, this state or any other state or a political subdivision of this state or of any other state.
5. Transporting for hire persons, freight or property by light motor vehicles subject to a fee under title 28, chapter 15, article 4.
6. 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 section 9‑463.05, section 11‑1102 or title 48 regardless of the jurisdiction to which the fees are paid.
D. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, in excess of one-tenth of one per cent of the value of the entire product mined, smelted, extracted, refined, produced or prepared for sale, profit or commercial use, on persons engaged in the business of mineral processing, except to the extent that the tax is computed on the gross proceeds or gross income from sales at retail.
E. In computing the tax base, any city, town or other taxing jurisdiction shall not include in the gross proceeds of sales or gross income:
1. 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.
2. The waste tire disposal fee imposed pursuant to section 44‑1302.
F. A city or town shall not levy a use tax on the storage, use or consumption of tangible personal property in the city or town by a school district or charter school.
Sec. 3. Declaration of intent
It is the intent of the legislature to clarify that for purposes of the deduction from the tax base of the retail classification under section 42‑5061, Arizona Revised Statutes, and the exemption from use tax under section 42-5159, Arizona Revised Statutes, section 42-5075, subsection B, paragraph 7, as amended by this act, is construed consistent with this act beginning from and after June 30, 1996.
Sec. 4. Retroactivity; refund
A. This act applies retroactively to taxable periods beginning from and after June 30, 1996.
B. Any claim for refund of tax based on the retroactive application of this act shall be considered timely filed under section 42-1106, Arizona Revised Statutes, if the claim is filed with the department of revenue on or before December 31, 2013 pursuant to section 42-1118, Arizona Revised Statutes. A failure to file a claim on or before December 31, 2013 constitutes a waiver of the claim for refund under this section.
C. The aggregate amount of the refund under this section is ten thousand dollars. If the aggregate amount of claims that are determined to be valid equals more than ten thousand dollars, the department shall reduce each claim proportionately so the aggregate amount of the refund is not more than ten thousand dollars.
D. Any claim for refund not based on the retroactive application of this act is not subject to subsections B and C of this section."
Amend title to conform
Justin Olson |
C: LRH