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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
TPT; exemption; firearm storage devices
Purpose
Exempts the gross proceeds of sales or gross income derived from sales of safe firearm storage devices from the retail classification of transaction privilege tax (TPT) and use tax.
Background
TPT is a gross receipts tax levied for the privilege of conducting business in Arizona and is imposed under 16 business classifications. All gross receipts are subject to tax under 1 of the 16 classifications of TPT, unless specifically exempted or excluded by statute. Statute exempts the gross proceeds of sales or gross income derived from sales of certain tangible personal property from the retail classification of TPT and use tax (A.R.S. Title 42, Chapter 5, Articles 2 and 4).
In 2022, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives issued a final rule that requires federal firearm licensees to certify that secure gun storage or safety devices will be available at any place where firearms are sold under the license to nonlicensed individuals and requires that the secure gun storage or safety devices be compatible with the firearms offered for sale by the licensee (ATF).
The Joint Legislative Budget Committee fiscal note estimates that H.B. 2635 would reduce the state General Fund portion of TPT revenue distributions by $540,000 annually (JLBC fiscal note).
Provisions
1. Exempts, from the retail classification of TPT and use tax, the gross proceeds of sales or gross income derived from sales of safe firearm storage devices.
2. Defines safe firearm storage devices as devices that are both:
a) designed and marketed for the principal purpose of denying unauthorized access to, or rendering inoperable, a firearm or ammunition; and
b) secured by a combination lock, key lock or lock based on biometric information that, once locked, is incapable of being opened without the combination, key or biometric information, respectively.
3. Excludes, from the definition of safe firearm storage devices, any device that:
a) is incorporated to any extent into the design of a firearm or of ammunition; or
b) as of the date of the sale, has been subject to a mandatory recall by the U.S. Consumer Product Safety Commission, or its successor commission.
4. Applies the TPT and use tax exemption to taxable periods beginning on or after the first day of the month following the general effective date.
5. Becomes effective on the general effective date.
House Action
WM 2/19/25 DP 9-0-0-0
3rd Read 2/27/25 57-0-3
Prepared by Senate Research
March 5, 2025
MG/ci