State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2003: coal mining; TPT; repeal

PRIME SPONSOR: Representative Finchem, LD 11

BILL STATUS: Caucus & COW

WM: DPA 6-3-0-0

 

Legend: TPT – Transaction Privilege Tax Amendments – BOLD and Stricken (Committee)

Abstract

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRelating to exempting coal from TPT.

Provisions

1.       Exempts the sale, storage, use and consumption of coal from TPT and use tax. (Sec. 1-5) (WM)

2.       Makes technical and conforming changes. (Sec. 1,2)

Current Law

Coal is exempt from tax under the retail and mining TPT classifications, in addition to municipal TPT when used or sold under specific circumstances. Coal, petroleum, coke, natural gas, virgin fuel oil and electricity sold to a qualified technology manufacturer, producer or processor and used directly for on-site power is exempt from TPT (A.R.S 42-5061). Coal is also exempt from taxation when the transfer of title or possession of the coal is for the purpose of refining the coal and the title or possession of the coal is transferred back to the owner or operator of the power plant after completion of the coal refining process (A.R.S §§ 5072, 5151,5159, 6004).

TPT is imposed on a vendor for the privilege of conducting business in Arizona. Under this tax, the seller is responsible for remitting to the state the entire amount of tax due based on the gross proceeds or gross income of the business. While the tax is commonly passed on to the consumer at the point of sale, it is ultimately the seller’s responsibility to remit the tax. TPT is broken down into 16 different classifications, one of which is the retail classification. The retail classification is comprised of businesses selling tangible personal property at retail (A.R.S. § 42-5061). The mining classification is comprised of the business of mining, quarrying or producing for sale, profit or commercial use any nonmetalliferous mineral product that has been mined, quarried or otherwise extracted within the boundaries of this state (A.R.S. § 42-5072).

 

 

 

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Fifty-third Legislature                  HB 2003

Second Regular Session                               Version 2: Caucus & COW

 

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