ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

Second Regular Session

Senate: FIN DPA 7-2-1-0 | 3rd Read 25-2-3-0

House: WM DP 8-1-0-1

SB 1636: use tax; service vehicles; inventory

Sponsor: Senator Pace, LD 25

Caucus & COW

Overview

Defines motor vehicles that are removed from inventory for the purposes of levying use tax.

History

Use tax is levied on the storage, use or consumption in this state of tangible personal property purchased from a retailer or utility business, at a rate of 5.6% of the tax base (A.R.S. § § 42-5155 and 42-5010).

Motor vehicles that are removed from inventory by a motor vehicle dealer and used in the conduct of the motor vehicle dealer's primary business and returned within one year of initial removal are subject to use tax. The use tax is levied monthly and applied to 1/39 of the value of each new motor vehicle as determined by the manufacturer's suggested retail price and to 1/39 of the value of each used motor vehicle as determined by any industry-wide publication in common use and devoted to listing used car values (A.R.S. § 42-5157).

Provisions

1. Defines motor vehicles that are removed from inventory as a motor vehicle that has been removed from a motor vehicle dealer's inventory and is not for sale. (Sec. 1)

2. Specifies that a service vehicle is not considered to be removed from inventory if the service vehicle is continuously available for sale. (Sec. 2)

3. Requires Arizona Department of Revenue to consider any service vehicle that remains, or is treated as, a new motor vehicle to be continuously available for sale. (Sec. 2)

4. Contains a purpose clause. (Sec. 3)

5. Contains an applicability clause. (Sec. 4)

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

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10. SB 1636

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