HomeMy WebLinkAboutORD1112ORDINANCE NO.1112
AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE
JUNCTION,ARIZONA,ADOPTING "'ME 1999 AMENDMENTS TO THE TAX CODE OF
THE CITY OF APACHE JUNCTION" BY REFERENCE;ESTABLISHING AN EFFECTIVE
DATE;PROVIDING FOR SEVERABILITY;PROVIDING PENALTIES FOR
VIOLATIONS;AND DECLARING AN EMERGENCY.
BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,
ARIZONA:
SECTION I IN GENERAL
That certain document known as "The 1999 Amendments to the Tax Code of the City
of Apache Junction,Arizona," three copies of which are on file in the office of
the city clerk in the City of Apache Junction,Arizona,which document was made
a public record by Resolution No.99-64 of the City of Apache Junction,Arizona-,
is hereby referred to,adopted and made a part hereof as if fully set out in this
ordinance.
SECTION I I PROVISIONS EFFECTIVE DECEMBER 31.1999
Except as provided in Section 3 and 4 of this ordinance,the provisions of this
ordinance and the public record adopted herein are effective from and after
December 31,1999.
SECTION III PROVISIONS EFFECTIVE RETROACTIVE TO JANUARY 1.1999
The following provisions of the public record adopted herein are retrbactive to
January 1,1999:
(a)Subsection (b)(3)of Section 8A-415.
(b)Subsection (c)(1)(A)of Section 8A-416.
(c)Subsection (b)(1)(A)of Section 8A-417.
SECTION IV PROVISIONS EFFECTIVE RETROACTIVE TO MAY 5.1999
The following provisions of the public record adopted herein are *.troaciive to
May 5,1999:
ORDINANCE NO.1112
PAGE 1 OF THREE
(a)Subsection (c)(10)of Section 8A-450.
(b)Subsection (kk)of Section 8A-465.
SECTION V PROVIDING FOR SEVERABILITY
If any section,subsection,sentence,clause,phrase or portion of this ordinance
or any part of these amendments to the tax code adopted herein by reference is
for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction,such decision shall not affect the validity of
the remaining portions thereof.
SECTION VI PROVIDING PENALTIES
Any person found guilty of violating any provision of these amendments to the tax
code shall be guilty of a class one misdemeanor.Each day that a violation
continues shall be a separate offense punishable as herein above described.
SECTION VIII DECLARING AN EMERGENCY
I t is necessary for the preservation of peace,health and safety of the City of
Apache Junction,Arizona,that this ordinance become effective immediately,an
emergency is hereby declared to exist and this ordinance shall be effective
immediately upon passage and adoption.
PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,
ARIZONA,THIS 7TH DAY OF DECEMBER ,1999.
SIGNED AND ATTESTED TO THIS 7TH DAY OF
ATTEST:
KATHLEEN CONNELLY
City Clerk
ORDINANCE NO.1112
PAGE 2 OF THREE
DHEMKR
DOUGLAS COLEMAN
Mayor
,1999.
APPROVED AS TO FORM:
R.JOEL STERN
City Attorney
ORDINANCE NO.1112
PAGE 3 OF THREE
1999 AMENDMENTS TO THE TAX CODE OF THE CITY OF APACHE JUNCTION
Section 1.Section 8A-110 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-110.Definitions:Income -producing capital equipment.
(a)The following tangible personal property, other than items excluded in subsection (d) below, shall be
deemed "income-producinq capital equipment"for the purposes of this Chapter:
(1)machinery or equipment used directly in manufacturing, processing, fabricating, job printing,
refining or metallurgical operations. The terms "manufacturing", "processing", "fabricating",
"job printing", "refining", and "metallurgical" as used in this paragraph refer to and include
those operations commonly understood within their ordinary meaning."Metallurgical
operations" includes leaching, milling, precipitating, smelting and refining.
(2)mining machinery, or equipment, used directly in the process of extracting ores or minerals
from the earth for commercial purposes, including equipment required to prepare the
materials for extraction and handling, loading or transporting such extracted material to the
surface. "Mining" includes underground, surface and open pit operations for extracting ores
and minerals.
(3 )tangible personal property, sold to persons engaged in business classified under the
telecommunications classification,consisting of central office switching equipment;
switchboards; private branch exchange equipment; microwave radio equipment, and carrier
equipment including optical fiber, coaxial cable, and other transmission media which are
components of carrier systems.
(4)machinery, equipment, or transmission lines used directly in producing or transmitting
electrical power, but not including transformers and control equipment used at transmission
substation sites constitute equipment used in producing or transmitting electrical power.
(5)pipes or valves four inches (4") in diameter or larger AND RELATED EQUIPMENT, used to
transport oil, natural gas, artificial gas, water, or coal slurry. FOR THE PURPOSE OF THIS
SECTION, RELATED EQUIPMENT INCLUDES: COMPRESSOR UNITS, REGULATORS,
MACHINERY AND EQUIPMENT, FITTINGS, SEALS AND ANY OTHER PARTS THAT ARE
USED IN OPERATING THE PIPES OR VALVES.
(6)aircraft,navigational and communication instruments,and other accessories and
related equipment sold to:
(A)a person holding a federal certificate of public convenience and necessity or
foreign air carrier permit for air transportation for use as or in conjunction with
or becoming a part of aircraft to be used to transport persons,property or
united states mail in intrastate, interstate or foreign commerce.
(B)any foreign government for use by such government outside of this state.
(C)persons who are not residents of this state and who will not use such property
in this state other than in removing such property from this state.This
subdivision also applies to corporations that are not incorporated in this state,
regardless of maintaining a place of business in this state,if the principal
corporate office is located outside this state and the property will not be used
in this state other than in removing the property from this state.
(7 )machinery,tools,equipment and related supplies used or consumed directly in
repairing,remodeling or maintaining aircraft,aircraft engines or aircraft component
parts by or on behalf of a certificated or licensed carrier of persons or property.
(8)railroad rolling stock, rails, ties and signal control equipment used directly to transport
persons or property --•'••- .
(9 )machinery or equipment used directly to drill for oil or gas or used directly in the
process of extracting oil or gas from the earth for commercial purposes.
(10)buses or other urban mass transit vehicles which are used directly to transport
persons or property for hire or pursuant to a governmentally adopted and controlled
urban mass transportation program and which are sold to bus companies holding a
federal certificate of convenience and necessity or operated by a city, town or other
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governmental entity or by any person contracting with such governmental entity as
part of a governmentally adopted and controlled program to provide urban mass
, transportation.
(11)metering,monitoring,receiving,and transmitting equipment acquired by persons
engaged in the business of providing utility services or telecommunications services;
but only to the extent that such equipment is to be used by the customers of such
persons and such persons separately charge or bill their customers for use of such
equipment.
(12)groundwater measuring devices required under A.R.S. § 45-604.
(13)machinery or equipment used in research and development.In this paragraph,
"research and development" means basic and applied research in the sciences and
engineering,and designing,developing or testing prototypes,processes or new
products, including research and development of computer software that is embedded
in or an integral part of the prototype or new product or that is required for machinery
or equipment otherwise exempt under this section to function effectively.Research
and development do not include manufacturing quality control,routine consumer
product testing,market research,sales promotion,sales service,research in social
sciences or psychology,computer software research that is not included in the
definition of research and development,or other nontechnological activities or
technical services.
(14)(Reserved)
(15)Included in income producing capital equipment are liquid, solid or gaseous chemicals used
in manufacturing, processing, fabricating,mining, refining, metallurgical operations or,
research and development OR JOB PRINTING, if using or consuming the chemicals, alone
or as part of an integrated system of chemicals, involving direct contact with the materials
from which the product is produced for the purpose of causing or permitting a chemical or
physical change to occur in the materials as part of the production process. This subsection
does not include chemicals that are used or consumed in activities such as packaging,
storage or transportation but does not affect any deduction for such chemicals that is
otherwise provided by this Code. Chemicals meeting the requirements of this subsection are
deemed not to be expendable under subsection (d) of this section.
(16)cleanrooms that are used for manufacturing,processing, fabrication or research and
development, as defined in paragraph (13) of this subsection, of semiconductor products. For
purposes of this paragraph, "cleanroom" means all property that comprises or creates an
environment where humidity, temperature, particulate matter and contamination are precisely
controlled within specified parameters, without regard to whether the property is actually
contained within that environment or whether any of the property is affixed to or incorporated
into real property.Cleanroom:
(A)includes the integrated systems, fixtures, piping, movable partitions, lighting and all
property that is necessary or adapted to reduce contamination or to control airflow,
temperature,humidity,chemical purity or other environmental conditions or
manufacturing tolerances, as well as the production machinery and equipment
operating in conjunction with the cleanroom environment.
(B)does not include the building or other permanent, nonremovable component of the
building that houses the cleanroom environment.
(17)machinery and equipment that are purchased by or on behalf of the owners of a soundstage
complex and primarily used for motion picture, multimedia or interactive video production in the
complex. This paragraph applies only if the initial construction of the soundstage complex
begins after June 30, 1996 and before January 1, 2002 and the machinery and equipment are
purchased before the expiration of five years after the start of initial construction. For purposes
of this paragraph:
(A)"motion picture, multimedia or interactive video production" includes products for
theatrical and television release, educational presentations, electronic retailing,
documentaries, music videos, industrial films, cd-rom, video game production,
commercial advertising and television episode production and other genres that are
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introduced through developing technology.
(B)"soundstage complex" means a facility of multiple stages including production offices,
construction shops and related areas, prop and costume shops, storage areas,
parking for production vehicles and areas that are leased to businesses that
complement the production needs and orientation of the overall facility.
(18)tangible personal property that is used by either of the following to receive, store, convert,
produce, generate, decode, encode, control or transmit telecommunications information:
(A)any direct broadcast satellite television or data transmission service that operates
pursuant to 47 Code of Federal Regulations parts 25 and 100.
(B)any satellite television or data transmission facility, if both of the following conditions
are met:
(i)over two-thirds of the transmissions, measured in megabytes, transmitted by
the facility during the test period were transmitted to or on behalf of one or
more direct broadcast satellite television or data transmission services that
operate pursuant to 47 Code of Federal Regulations parts 25 and 100.
(ii)over two-thirds of the transmissions, measured in megabytes, transmitted by
or on behalf of those direct broadcast television or data transmission services
during the test period were transmitted by the facility to or on behalf of those
services.
For purposes of subdivision (B) of this paragraph, "test period" means the three hundred sixty-
five day period beginning on the later of the date on which the tangible personal property is
purchased or the date on which the direct broadcast satellite television or data transmission
service first transmits information to its customers.
(19)MACHINERY AND EQUIPMENT THAT IS USED DIRECTLY IN THE FEEDING OF
POULTRY, THE ENVIRONMENTAL CONTROL OF HOUSING FOR POULTRY, THE
MOVEMENT OF EGGS WITHIN A PRODUCTION AND PACKAGING FACILITY OR THE
SORTING OR COOLING OF EGGS. THIS EXEMPTION DOES NOT APPLY TO VEHICLES
USED FOR TRANSPORTING EGGS.
(20)MACHINERY OR EQUIPMENT, INCLUDING RELATED STRUCTURAL COMPONENTS,
THAT IS EMPLOYED IN CONNECTION WITH MANUFACTURING,PROCESSING,
FABRICATING,JOB PRINTING,REFINING,MINING,NATURAL GAS PIPELINES,
METALLURGICAL OPERATIONS,TELECOMMUNICATIONS,PRODUCING OR
TRANSMITTING ELECTRICITY OR RESEARCH AND DEVELOPMENT THAT IS USED
DIRECTLY TO MEET OR EXCEED RULES OR REGULATIONS ADOPTED BY THE
FEDERAL ENERGY REGULATORY COMMISSION,THE UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY,THE UNITED STATES NUCLEAR
REGULATORY COMMISSION, THE ARIZONA DEPARTMENT OF ENVIRONMENTAL
QUALITY OR A POLITICAL SUBDIVISION OF THIS STATE TO PREVENT, MONITOR,
CONTROL OR REDUCE LAND, WATER OR AIR POLLUTION.
(21)MACHINERY OR EQUIPMENT THAT ENABLES A TELEVISION STATION TO ORIGINATE
AND BROADCAST OR TO RECEIVE AND BROADCAST DIGITAL TELEVISION SIGNALS
AND THAT WAS PURCHASED TO FACILITATE COMPLIANCE WITH THE
TELECOMMUNICATIONS ACT OF 1996 (P.L. 104-104; 110 STAT. 56; 47 UNITED STATES
CODE SECTION 336) AND THE FEDERAL COMMUNICATIONS COMMISSION ORDER
ISSUED APRIL 21,1997, 47 CODE OF FEDERAL REGULATIONS PART 73. THIS
PARAGRAPH DOES NOT EXEMPT ANY OF THE FOLLOWING:
(A)REPAIR OR REPLACEMENT PARTS PURCHASED FOR THE MACHINERY OR
EQUIPMENT DESCRIBED IN THIS PARAGRAPH.
(B)MACHINERY OR EQUIPMENT PURCHASED TO REPLACE MACHINERY OR
EQUIPMENT FOR WHICH AN EXEMPTION WAS PREVIOUSLY CLAIMED AND
TAKEN UNDER THIS PARAGRAPH.
(C)ANY MACHINERY OR EQUIPMENT PURCHASED AFTER THE TELEVISION
STATION HAS CEASED ANALOG BROADCASTING, OR PURCHASED AFTER
NOVEMBER 1, 2009, WHICHEVER OCCURS FIRST.
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(b)The term "income -producing capital equipment" shall further include ancillary machinery and
equipment used for the treatment of waste products created by the business activities which
are allowed to purchase "income -producing capital equipment"defined in subsection (a)
above.
(c)The term "income -producing capital equipment" shall further include repair and replacement
parts, other than the items in subsection (d) below, where the property is acquired to become
an integral part of another item itemized in subsections (a) or (b) above.
(d)The tangible personal property defined as income -producing capital equipment in this Section
shall not include:
(1)expendable materials.FOR PURPOSES OF THIS PARAGRAPH,EXPENDABLE
MATERIALS DO NOT INCLUDE ANY OF THE CATEGORIES OF TANGIBLE PERSONAL
PROPERTY SPECIFIED IN SUBSECTIONS (a),(b)OR (c)OF THIS SECTION
REGARDLESS OF THE COST OR USEFUL LIFE OF THAT PROPERTY.
(2)janitorial equipment and hand tools.
(3)office equipment, furniture, and supplies.
(4)tangible personal property used in selling or distributing activities.
(5)motor vehicles required to be licensed by the State of Arizona, except buses or other
urban mass transit vehicles specifically exempted pursuant to subsection (a)(10)
above without regard to the use of such motor vehicles.
(6)shops, buildings, docks, depots, and all other materials of whatever kind or character
not specifically included as exempt.
(7)motors and pumps used in drip irrigation systems.
(e)For the purposes of this Section:
(1)"aircraft" includes:
(a)an airplane flight simulator that is approved by the Federal Aviation
Administration for use as a Phase II or higher flight simulator under Appendix
H, 14 Code of Federal Regulations Part 121.
(B)tangible personal property that is permanently affixed or attached as a
component part of an aircraft that is owned or operated by a certificated or
licensed carrier of persons or property.
(2)"other accessories and related equipment"includes aircraft accessories and
equipment such as ground service equipment that physically contact aircraft at some
point during the overall carrier operation.
Section 2.Section 8A-415 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-415.Construction contracting:construction contractors.
(a)The tax rate shall be at an amount equal to two percent (2%) of the gross income from the
business upon every construction contractor engaging or continuing in the business activity
of construction contracting within the City.
(1)However,gross income from construction contracting shall not include charges
related to groundwater measuring devices required by A.R.S. Section 45-604.
(2)(Reserved)
(3 )Gross income from construction contracting shall not include gross income from the
sale of manufactured buildings taxable under Section 8A-427.
(b)Deductions AND EXEMPTIONS.
(1)Gross income derived from acting as a "subcontractor" shall be exempt from the tax imposed
by this Section.
(2)All construction contracting gross income subject to the tax and not deductible herein shall
be allowed a deduction of thirty-five percent (35%).
(3)THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO THE
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PURCHASE OF MACHINERY,EQUIPMENT OR OTHER TANGIBLE PERSONAL
PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM PRIVILEGE OR USE TAX
, UNDER:
(A)SECTION 8A-465, SUBSECTIONS (g) AND (p)
(B)(RESERVED)
SHALL BE EXEMPT OR DEDUCTIBLE, RESPECTIVELY, FROM THE TAX IMPOSED BY
THIS SECTION.
(4)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A
CONTRACT ENTERED INTO FOR THE INSTALLATION,ASSEMBLY,REPAIR OR
MAINTENANCE OF INCOME -PRODUCING CAPITAL EQUIPMENT, AS DEFINED IN
SECTION 8A-110, THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A
BUILDING,HIGHWAY,ROAD,RAILROAD,EXCAVATION OR MANUFACTURED
BUILDING OR OTHER STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT
SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION.IF THE
OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE
INCOME -PRODUCING CAPITAL EQUIPMENT,THE DETERMINATION AS TO
PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS THE SAME.
THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS
PROCEEDS OF SALES OR GROSS INCOME FROM THAT PORTION OF ANY
CONTRACTING ACTIVITY WHICH CONSISTS OF THE DEVELOPMENT OF,OR
MODIFICATION TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION,
ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF THE INCOME -PRODUCING
CAPITAL EQUIPMENT.FOR PURPOSES OF THIS PARAGRAPH,"PERMANENT
ATTACHMENT' MEANS AT LEAST ONE OF THE FOLLOWING:
(A)TO BE INCORPORATED INTO REAL PROPERTY.
(B)TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES PART OF
THE REAL PROPERTY.
(C)TO BE SO ATTACHED TO REAL PROPERTY THAT REMOVAL WOULD CAUSE
SUBSTANTIAL DAMAGE TO THE REAL PROPERTY FROM WHICH IT IS
REMOVED.
(5)THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A
CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY CONTROLLED
FACILITY FOR THE RAISING OF POULTRY FOR THE PRODUCTION OF EGGS AND
THE SORTING, OR COOLING AND PACKAGING OF EGGS SHALL BE EXEMPT FROM
THE TAX IMPOSED UNDER THIS SECTION.
(6)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM THE
INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF CLEAN ROOMS THAT ARE
DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION PURSUANT TO
SECTION 8A-465, SUBSECTION (g) SHALL BE EXEMPT FROM THE TAX IMPOSED
UNDER THIS SECTION.
(7)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A
CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN THE
COMMERCIAL PRODUCTION OF LIVESTOCK,LIVESTOCK PRODUCTS OR
AGRICULTURAL, HORTICULTURAL, VITICULTURAL OR FLORICULTURAL CROPS OR
PRODUCTS IN THIS STATE FOR THE CONSTRUCTION,ALTERATION,REPAIR,
IMPROVEMENT, MOVEMENT, WRECKING OR DEMOLITION OR ADDITION TO OR
SUBTRACTION FROM ANY BUILDING,HIGHWAY,ROAD,EXCAVATION,
MANUFACTURED BUILDING OR OTHER STRUCTURE, PROJECT, DEVELOPMENT OR
IMPROVEMENT USED DIRECTLY AND PRIMARILY TO PREVENT, MONITOR, CONTROL
OR REDUCE AIR, WATER OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX
IMPOSED UNDER THIS SECTION.
(c)Subcontractor means a construction contractor performing work for either:
(1)a construction contractor who has provided the subcontractor with a written
declaration that he is liable for the tax for the project and has provided the
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subcontractor his City Privilege License number.
(2)an owner -builder who has provided the subcontractor with a written declaration that:
, (A)the owner -builder is improving the property for sale; and
(B)the owner -builder is liable for the tax for such construction contracting activity;
and
(C)the owner -builder has provided the contractor his City Privilege License
number.
(3 )A person selling new manufactured buildings who has provided the subcontractor with
a written declaration that he is liable for the tax for the site preparation and set-up;
and provided the subcontractor his City Privilege License number.
Subcontractor also includes a construction contractor performing work for another subcontractor as
defined above.
Section 3.Section 8A-416 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-416 Construction contracting: speculative builders.
(a)The tax shall be equal to two percent (2%) of the gross income from the business activity
upon every person engaging or continuing in business as a speculative builder within the City.
(1)The gross income of a speculative builder considered taxable shall include the total
selling price from the sale of improved real property at the time of closing of escrow
or transfer of title.
(2)"Improved Real Property"means any real property:
(A)upon which a structure has been constructed; or
(B)where improvements have been made to land containing no structure (such
as paving or landscaping); or
(C)which has been reconstructed as provided by Regulation; or
(D)where water, power, and streets have been constructed to the property line.
(3 )"Sale of Improved Real Property"includes any form of transaction,whether
characterized as a lease or otherwise, which in substance is a transfer of title of, or
equitable ownership in, improved real property and includes any lease of the property
for a term of thirty (30) years or more (with all options for renewal being included as
a part of the term).In the case of multiple unit projects, "sale" refers to the sale of the
entire project or to the sale of any individual parcel or unit.
(4)"Partially Improved Residential Real Property,"as used in this Section,means any
improved real property,as defined in subsection (a)(2)above,being developed for
sale to individual homeowners,where the construction of the residence upon such
property is not substantially complete at the time of the sale.
(b)Exclusions.
(1)In cases involving reconstruction contracting,the speculative builder may exclude
from gross income the prior value allowed for reconstruction contracting in
determining his taxable gross income, as provided by Regulation.
(2)Neither the cost nor the fair market value of the land which constitutes part of the
improved real property sold may be excluded or deducted from gross income subject
to the tax imposed by this Section.
(3 )(Reserved)
(4)A speculative builder may exclude gross income from the sale of partially improved
residential real property as defined in (a)(4) above to another speculative builder only
if all of the following conditions are satisfied:
(A)The speculative builder purchasing the partially improved residential real
property has a valid City privilege license for construction contracting as a
speculative builder; and
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(B)At the time of the transaction,the purchaser provides the seller with a properly
completed written declaration that the purchaser assumes liability for and will
pay all privilege taxes which would otherwise be due the City at the time of
sale of the partially improved residential real property; and
(C)The seller also:
(i)maintains proper records of such transactions in a manner similar to
the requirements provided in this chapter relating to sales for resale;
and
(ii)retains a copy of the written declaration provided by the buyer for the
transaction; and
(iii)is properly licensed with the City as a speculative builder and provides
the City with the written declaration attached to the City privilege tax
return where he claims the exclusion.
(c)Tax liability for speculative builders occurs at close of escrow or transfer of title, whichever occurs
earlier, and is subject to the FOLLOWING provisions of relating to EXEMPTIONS,
deductions and tax credits::
(1)EXEMPTIONS.
(A)THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO
THE PURCHASE OF MACHINERY,EQUIPMENT OR OTHER TANGIBLE
PERSONAL PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM
PRIVILEGE OR USE TAX UNDER:
(i)SECTION 8A-465, SUBSECTIONS (g) AND (p),
(ii)(RESERVED).
SHALL BE EXEMPT OR DEDUCTIBLE,RESPECTIVELY,FROM THE TAX
IMPOSED BY THIS SECTION.
(B)THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A
CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY
CONTROLLED FACILITY FOR THE RAISING OF POULTRY FOR THE
PRODUCTION OF EGGS AND THE SORTING, OR COOLING AND PACKAGING
OF EGGS SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS
SECTION.
(C)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM THE INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF CLEAN
ROOMS THAT ARE DEDUCTED FROM THE TAX BASE OF THE RETAIL
CLASSIFICATION PURSUANT TO SECTION 8A-465, SUBSECTION (g) SHALL BE
EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION.
(D)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM A CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN
THE COMMERCIAL PRODUCTION OF LIVESTOCK, LIVESTOCK PRODUCTS OR
AGRICULTURAL,HORTICULTURAL,VITICULTURAL OR FLORICULTURAL
CROPS OR PRODUCTS IN THIS STATE FOR THE CONSTRUCTION,
ALTERATION,REPAIR,IMPROVEMENT,MOVEMENT,WRECKING OR
DEMOLITION OR ADDITION TO OR SUBTRACTION FROM ANY BUILDING,
HIGHWAY, ROAD,EXCAVATION, MANUFACTURED BUILDING OR OTHER
STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT USED DIRECTLY
AND PRIMARILY TO PREVENT, MONITOR, CONTROL OR REDUCE AIR, WATER
OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER
THIS SECTION.
(2)DEDUCTIONS.
(A)ALL AMOUNTS SUBJECT TO THE TAX SHALL BE ALLOWED A DEDUCTION IN
THE AMOUNT OF THIRTY-FIVE PERCENT (35%).
(B)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM THE INSTALLATION,ASSEMBLY,REPAIR OR MAINTENANCE OF
INCOME -PRODUCING CAPITAL EQUIPMENT, AS DEFINED IN SECTION 8A-110,
THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A BUILDING,
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HIGHWAY, ROAD, RAILROAD, EXCAVATION OR MANUFACTURED BUILDING
OR OTHER STRUCTURE.PROJECT,DEVELOPMENT OR IMPROVEMENT
SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION.IF THE
OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE
INCOME -PRODUCING CAPITAL EQUIPMENT, THE DETERMINATION AS TO
PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS
THE SAME.THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT
INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THAT
PORTION OF ANY CONTRACTING ACTIVITY WHICH CONSISTS OF THE
DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO
FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR
REMOVAL OF THE INCOME -PRODUCING CAPITAL EQUIPMENT.FOR
PURPOSES OF THIS PARAGRAPH, "PERMANENT ATTACHMENT" MEANS AT
LEAST ONE OF THE FOLLOWING:
(i)TO BE INCORPORATED INTO REAL PROPERTY.
(ii)TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES
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.
(3)TAX CREDITS.
THE FOLLOWING TAX CREDITS ARE AVAILABLE TO OWNER -BUILDERS OR
SPECULATIVE BUILDERS, NOT TO EXCEED THE TAX LIABILITY AGAINST WHICH
SUCH CREDITS APPLY, PROVIDED SUCH CREDITS ARE DOCUMENTED TO THE
SATISFACTION OF THE TAX COLLECTOR:
(A)A TAX CREDIT EQUAL TO THE AMOUNT OF CITY PRIVILEGE OR USE TAX, OR
THE EQUIVALENT EXCISE TAX, PAID DIRECTLY TO A TAXING JURISDICTION
OR AS A SEPARATELY ITEMIZED CHARGE PAID DIRECTLY TO THE VENDOR
WITH RESPECT TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED
INTO THE SAID STRUCTURE OR IMPROVEMENT TO REAL PROPERTY
UNDERTAKEN BY THE OWNER -BUILDER OR SPECULATIVE BUILDER.
(B)A TAX CREDIT EQUAL TO THE AMOUNT OF PRIVILEGE TAXES PAID TO THIS
CITY, OR CHARGED SEPARATELY TO THE SPECULATIVE BUILDER, BY A
CONSTRUCTION CONTRACTOR, ON THE GROSS INCOME DERIVED BY SAID
PERSON FROM THE CONSTRUCTION OF ANY IMPROVEMENT TO THE REAL
PROPERTY.
(C)NO CREDITS PROVIDED HEREIN MAY BE CLAIMED UNTIL SUCH TIME THAT
THE GROSS INCOME AGAINST WHICH SAID CREDITS APPLY IS REPORTED.
Section 4.Section 8A-417 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-417.Construction contracting:owner -builders who are not speculative builders.
(a)At the expiration of twenty-four (24) months after improvement to the property is substantially
complete, the tax liability for an owner -builder who is not a speculative builder shall be at an
amount equal to two percent (2%) of:
(1)the gross income from the activity of construction contracting upon the real property
in question which was realized by those construction contractors to whom the owner-
builder provided written declaration that they were not responsible for the taxes as
prescribed in Subsection 8A -415(c)(2); and
(2)the purchase of tangible personal property for incorporation into any improvement to
real property, computed on the sales price.
(b)The tax liability of this Section is subject to the FOLLOWING provisions of relating
to EXEMPTIONS, deductions and tax credits::
8
(1)EXEMPTIONS.
(A)THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO
THE PURCHASE OF MACHINERY,EQUIPMENT OR OTHER TANGIBLE
PERSONAL PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM
PRIVILEGE OR USE TAX UNDER:
(i)SECTION 8A-465, SUBSECTIONS (g) AND (p)
(ii)(RESERVED)
SHALL BE EXEMPT OR DEDUCTIBLE,RESPECTIVELY,FROM THE TAX
IMPOSED BY THIS SECTION.
(B)THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A
CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY
CONTROLLED FACILITY FOR THE RAISING OF POULTRY FOR THE
PRODUCTION OF EGGS AND THE SORTING, OR COOLING AND PACKAGING
OF EGGS SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS
SECTION.
(C)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM THE INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF CLEAN
ROOMS THAT ARE DEDUCTED FROM THE TAX BASE OF THE RETAIL
CLASSIFICATION PURSUANT TO SECTION 8A-465, SUBSECTION (g) SHALL BE
EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION.
(D)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM A CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN
THE COMMERCIAL PRODUCTION OF LIVESTOCK, LIVESTOCK PRODUCTS OR
AGRICULTURAL,HORTICULTURAL,VITICULTURAL OR FLORICULTURAL
CROPS OR PRODUCTS IN THIS STATE FOR THE CONSTRUCTION,
ALTERATION,REPAIR,IMPROVEMENT,MOVEMENT,WRECKING OR
DEMOLITION OR ADDITION TO OR SUBTRACTION FROM ANY BUILDING,
HIGHWAY,ROAD,EXCAVATION, MANUFACTURED BUILDING OR OTHER
STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT USED DIRECTLY
AND PRIMARILY TO PREVENT, MONITOR, CONTROL OR REDUCE AIR, WATER
OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER
THIS SECTION.
(2)DEDUCTIONS.
(A)ALL AMOUNTS SUBJECT TO THE TAX SHALL BE ALLOWED A DEDUCTION IN
THE AMOUNT OF THIRTY-FIVE PERCENT (35%).
(B)THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED
FROM THE INSTALLATION,ASSEMBLY,REPAIR OR MAINTENANCE OF
INCOME -PRODUCING CAPITAL EQUIPMENT, AS DEFINED IN SECTION 8A-110,
THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A BUILDING,
HIGHWAY, ROAD, RAILROAD, EXCAVATION OR MANUFACTURED BUILDING
OR OTHER STRUCTURE,PROJECT,DEVELOPMENT OR IMPROVEMENT
SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION.IF THE
OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE
INCOME -PRODUCING CAPITAL EQUIPMENT, THE DETERMINATION AS TO
PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS
THE SAME.THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT
INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THAT
PORTION OF ANY CONTRACTING ACTIVITY WHICH CONSISTS OF THE
DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO
FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR
REMOVAL OF THE INCOME -PRODUCING CAPITAL EQUIPMENT.FOR
PURPOSES OF THIS PARAGRAPH, "PERMANENT ATTACHMENT' MEANS AT
LEAST ONE OF THE FOLLOWING:
(i)TO BE INCORPORATED INTO REAL PROPERTY.
(ii)TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES
9
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.
(3)TAX CREDITS.
THE FOLLOWING TAX CREDITS ARE AVAILABLE TO OWNER -BUILDERS AND
SPECULATIVE BUILDERS, NOT TO EXCEED THE TAX LIABILITY AGAINST WHICH
SUCH CREDITS APPLY, PROVIDED SUCH CREDITS ARE DOCUMENTED TO THE
SATISFACTION OF THE TAX COLLECTOR:
(A)A TAX CREDIT EQUAL TO THE AMOUNT OF CITY PRIVILEGE OR USE TAX, OR
THE EQUIVALENT EXCISE TAX, PAID DIRECTLY TO A TAXING JURISDICTION
OR AS A SEPARATELY ITEMIZED CHARGE PAID DIRECTLY TO THE VENDOR
WITH RESPECT TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED
INTO THE SAID STRUCTURE OR IMPROVEMENT TO REAL PROPERTY
UNDERTAKEN BY THE OWNER -BUILDER OR SPECULATIVE BUILDER.
(B)A TAX CREDIT EQUAL TO THE AMOUNT OF PRIVILEGE TAXES PAID TO THIS
CITY, OR CHARGED SEPARATELY TO THE SPECULATIVE BUILDER, BY A
CONSTRUCTION CONTRACTOR, ON THE GROSS INCOME DERIVED BY SAID
PERSON FROM THE CONSTRUCTION OF ANY IMPROVEMENT TO THE REAL
PROPERTY.
(C)NO CREDITS PROVIDED HEREIN MAY BE CLAIMED UNTIL SUCH TIME THAT
THE GROSS INCOME AGAINST WHICH SAID CREDITS APPLY IS REPORTED.
(c)The limitation period for the assessment of taxes imposed by this Section is measured based
upon when such liability is reportable, that is,in the reporting period that encompasses the
twenty-fifth (25th) month after said unit or project was substantially complete.Interest and
penalties, as provided in Section 8A-540, will be based on reportable date.
(d)(Reserved)
Section 5.Section 8A-418 of the Tax Code of the City of Apache Junction is amended to read:
Sec.8A-418 (RESERVED)Construction
speculative-truilders-and-overter-builders:
['ECM
an
di I ULJIC
of-the-T-ax-C—ottector
Prrerpertr
ae-arroweera-GetIttettEl
Section 6.Section 8A-444 of the Tax Code of the City of Apache Junction is amended to read:
10
Sec. 8A-444.Hotels.
The tax rate shall be at an amount equal to two percent (2%) of the gross income from the business
activity upon every person engaging or continuing in the business of operating a hotel charging for
lodging and/or lodging space furnished to any:
(a)Person.
(b)(Reserved)
(c)INCOME DERIVED FROM INCARCERATING OR DETAINING 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 IN A PRIVATELY
OPERATED PRISON, JAIL OR DETENTION FACILITY IS EXEMPT FROM THE TAX IMPOSED BY
THIS SECTION.
Section 7.Section 8A-445 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-445.Rental, leasing, and licensing for use of real property.
(a)The tax rate shall be at an amount equal to two percent (2%) of the gross income from the
business activity upon every person engaging or continuing in the business of leasing or renting real
property located within the City for a consideration, to the tenant in actual possession, or the licensing
for use of real property to the final licensee located within the City for a consideration including any
improvements, rights, or interest in such property; provided further that:
(1)Payments made by the lessee to,or on behalf of,the lessor for property taxes,
repairs, or improvements are considered to be part of the taxable gross income.
(2)Charges for such items as telecommunications, utilities, pet fees, or maintenance are
considered to be part of the taxable gross income.
(3 )However,if the lessor engages in telecommunication activity,as evidenced by
installing individual metering equipment and by billing each tenant based upon actual
usage, such activity is taxable under Section 8A-470.
(b)If individual utility meters have been installed for each tenant and the lessor separately
charges each single tenant for the exact billing from the utility company,such charges are
exempt.
(c)Charges by a qualifying hospital, qualifying community health center or a qualifying health care
organization to patients of such facilities for use of rooms or other real property during the course of
their treatment by such facilities are exempt.
(d)Charges for joint pole usage by a person engaged in the business of providing or furnishing
utility or telecommunication services to another person engaged in the business of providing
or furnishing utility or telecommunication services are exempt from the tax imposed by this
Section.
(e)(Reserved)
(f)(Reserved)
(g)(Reserved)
(h)(Reserved)
(i)(Reserved)
11
(i)Exempt from the tax imposed by this Section is gross income derived from the activities
taxable under Section 8A-444 of this code.
(k)(Reserved)
(I)(Reserved)
•(m)(Reserved)
(n)Notwithstanding the provisions of Section 8A -200(b),the fair market value of one (1)
apartment,in an apartment complex provided rent free to an employee of the apartment
complex is not subject to the tax imposed by .this Section.For an apartment complex with
more than fifty (50) units, an additional apartment provided rent free to an employee for every
additional fifty (50) units is not subject to the tax imposed by this Section.
(o)INCOME DERIVED FROM INCARCERATING OR DETAINING 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 IN A PRIVATELY
OPERATED PRISON, JAIL OR DETENTION FACILITY IS EXEMPT FROM THE TAX IMPOSED BY
THIS SECTION.
Section 8.Section 8A-450 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-450.Rental, leasing, and licensing for use of tangible personal property.
(a)The tax rate shall be at an amount equal to two percent (2%) of the gross income from the
business activity upon every person engaging or continuing in the business of leasing,
licensing for use,or renting tangible personal property for a consideration,including that
which is semi -permanently or permanently installed within the City as provided by Regulation.
(b)Special provisions relating to long-term motor vehicle leases.A lease transaction involving
a motor vehicle for a minimum period of twenty-four (24) months shall be considered to have
occurred at the location of the motor vehicle dealership, rather than the location of the place
of business of the lessor, even if the lessor's interest in the lease and its proceeds are sold,
transferred, or otherwise assigned to a lease financing institution; provided further that the city
or town where such motor vehicle dealership is located levies a Privilege Tax or an equivalent
excise tax upon the transaction.
(c)Gross income derived from the following transactions shall be exempt from Privilege Taxes
imposed by this Section:
(1)rental, leasing, or licensing for use of tangible personal property to persons engaged
or continuing in the business of leasing, licensing for use, or rental of such property.
(2)rental,leasing,or licensing for use of tangible personal property that is semi-
permanently or permanently installed within another city or town that levies an
equivalent excise tax on the transaction.
(3 )rental, leasing, or licensing for use of film, tape, or slides to a theater or other person
taxed under Section 8A-410,or to a radio station,television station,or subscription
television system.
(4)rental, leasing, or licensing for use of the following:
(A)prosthetics.
(B)income -producing capital equipment.
(C)mining and metallurgical supplies.
These exemptions include the rental, leasing, or licensing for use of tangible personal
property which, if it had been purchased instead of leased, rented, or licensed by the
lessee or licensee,would qualify as income -producing capital equipment or mining
and metallurgical supplies.
(5)rental, leasing, or licensing for use of tangible personal property to a qualifying hospital,
12
qualifying community health center or a qualifying health care organization, except when the
property so rented, leased, or licensed is for use in activities resulting in gross income from
.unrelated business income as that term is defined in 26 U.S.C. Section 512 or rental, leasing,
or licensing for use of tangible personal property in this State by a nonprofit charitable
organization that has qualified under Section 501(c)(3) of the United States Internal Revenue
Code and that engages in and uses such property exclusively for training, job placement or
rehabilitation programs or testing for mentally or physically handicapped persons.
(6)separately billed charges for delivery,installation,repair,and/or maintenance as
provided by Regulation.
(7 )charges for joint pole usage by a person engaged in the business of providing or
furnishing utility or telecommunication services to another person engaged in the
business of providing or furnishing utility or telecommunication services.
(8)(Reserved)
(9 )rental,leasing, or licensing of aircraft that would qualify as aircraft acquired for use
outside the State, as prescribed by Regulation, if such rental, leasing, or licensing had
been a sale.
(10)RENTAL, LEASING AND LICENSING FOR USE OF MOTOR VEHICLES THAT USE
ALTERNATIVE FUEL AS DEFINED IN A.R.S. SECTION 43-1086 ON OR AFTER MAY 5,
1999.
Section 9.Section 8A-460 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-460.Retail sales:measure of tax; burden of proof; exclusions.
(a)The tax rate shall be at an amount equal to two percent (2%) of the gross income from the
business activity upon every person engaging or continuing in the business of selling tangible
personal property at retail.
(b)The burden of proving that a sale of tangible personal property is not a taxable retail sale shall
be upon the person who made the sale.
(c)Exclusions.For the purposes of this Chapter,sales of tangible personal property shall not
include:
(1)sales of stocks, bonds, options, or other similar materials.
(2)sales of lottery tickets or shares pursuant to Article I,Chapter 5,Title 5,Arizona
Revised Statutes.
(3 )sales of platinum, bullion, or monetized bullion, except minted or manufactured coins
transferred or acquired primarily for their numismatic value as prescribed by
Regulation.
(4)gross income derived from the transfer of tangible personal property which is
specifically included as the gross income of a business activity upon which another
Section of this Article imposes a tax,shall be considered gross income of that
business activity, and are not includable as gross income subject to the tax imposed
by this Section.
(5 )sales by professional or personal service occupations where such sales are
inconsequential elements of the service provided.
(d)Notwithstanding the provisions of subsection (a) above, when the gross income from the sale
of a single item of tangible personal property exceeds two thousand dollars ($2,000), the two
percent (2%) tax rate shall apply to the first $2,000.Above $2,000, the measure of tax shall
be at a rate of one percent (1%).
(e)When this City and another Arizona city or town with an equivalent excise tax could claim
nexus for taxing a retail sale, the city or town where the permanent business location of the
13
(f)
(g)
seller at which the order was received shall be deemed to have precedence,and for the
purposes of this Chapter such city or town has sole and exclusive right to such tax.
The appropriate tax liability for any retail sale where the order is received at a permanent
business location of the seller located in this City or in an Arizona city or town that levies an
equivalent excise tax shall be at the tax rate of the city or town of such seller's location.
RETAIL SALES OF PREPAID CALLING CARDS OR PREPAID AUTHORIZATION NUMBERS FOR
TELECOMMUNICATIONS SERVICES,INCLUDING SALES OF REAUTHORIZATION OF A
PREPAID CARD OR AUTHORIZATION NUMBER, ARE SUBJECT TO TAX UNDER THIS SECTION.
Section 10.Section 8A-465 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-465.Retail sales:exemptions.
Income derived from the following sources is exempt from the tax imposed by Section 8A-460:
(a)sales of tangible personal property to a person regularly engaged in the business of selling
such property.
(b)out -of -City sales or out -of -State sales.
(c)charges for delivery,installation,or other direct customer services as prescribed by
Regulation.
(d)charges for repair services as prescribed by Regulation,when separately charged and
separately maintained in the books and records of the taxpayer.
(e)sales of warranty,maintenance,and service contracts,when separately charged and
separately maintained in the books and records of the taxpayer.
sales of prosthetics.
(9)sales of income -producing capital equipment.
(h)sales of rental equipment and rental supplies.
(i)sales of mining and metallurgical supplies.
(i)sales of motor vehicle fuel and use fuel which are subject to a tax imposed under the provisions of
Article I or II, Chapter 16, Title 28, Arizona Revised Statutes; or sales of use fuel to a holder of a valid
single trip use fuel tax permit issued under A.R.S. Section 28-5739, or sales of natural gas or liquefied
petroleum gas used to propel a motor vehicle.
(k)sales of tangible personal property to a construction contractor who holds a valid Privilege
Tax License for engaging or continuing in the business of construction contracting where the
tangible personal property sold is incorporated into any structure or improvement to real
property as part of construction contracting activity.
(I)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.
(m)sales of tangible personal property which directly enters into and becomes an ingredient or
component part of a product sold in the regular course of the business of job printing,
manufacturing,or publication of newspapers,magazines,or other periodicals.Tangible
14
(P)
(q)
personal property which is consumed or used up in a manufacturing, job printing, publishing,
or production process is not an ingredient nor component part of a product.
(n)sales made directly to the Federal government to the extent of:
(1)one hundred percent (100%) of the gross income derived from retail sales made by
a manufacturer, modifier, assembler, or repairer.
(2)fifty percent (50%) of the gross income derived from retail sales made by any other
person.
(o)sales to hotels,bars,restaurants,dining cars,lunchrooms,boarding houses,or similar
establishments of articles consumed as food, drink, or condiment, whether simple, mixed, or
compounded,where such articles are customarily prepared or served to patrons for
consumption on or off the premises, where the purchaser is properly licensed and paying a
tax under Section 8A-455 or the equivalent excise tax upon such income.
sales of tangible personal property to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property sold is for use in activities resulting in
gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512 or sales
of tangible personal property purchased in this State by a nonprofit charitable organization that has
qualified under Section 501(c)(3) of the United States Internal Revenue Code and that engages in and
uses such property exclusively for training, job placement or rehabilitation programs or testing for
mentally or physically handicapped persons.
food purchased with food stamps provided through the food stamp program established by the Food
Stamp Act of 1977 (P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011 et seq.)or purchased with food
instruments issued under Section 17 of the Child Nutrition Act (P.L. 95-627; 92 Stat. 3603; and
P.L. 99-669; Section 4302; 42 UNITED STATES CODE SECTION 1786) but only to the extent that
food stamps or food instruments were actually used to purchase such food.
(r)(Reserved)
(1)(Reserved)
(2)(Reserved)
(3)(Reserved)
(4)(Reserved)
(s)sales of groundwater measuring devices required by A.R.S. Section 45-604.
(t)(Reserved)
(u)sales of aircraft acquired for use outside the State, as prescribed by regulation.
(v)sales of food products by producers as provided for by A.R.S. Sections 3-561, 3-562 and 3-563.
(w)(Reserved)
(x)(Reserved)
(y)(Reserved)
(z)(Reserved)
(aa)the sale of tangible personal property used in remediation contracting as defined in
Section 8A-100 and Regulation 8A-100.5.
(bb)sales of materials that are purchased by or for publicly funded libraries including school
district libraries, charter school libraries, community college libraries,state university libraries
or federal, state, county or municipal libraries for use by the public as follows:
15
(1)printed or photographic materials.
(2)electronic or digital media materials.
(cc)sales of food, beverages, condiments and accessories used for serving food and beverages
to a commercial airline,as defined in A.R.S.§42-5061(A)(50),that serves the food and
beverages to its passengers,without additional charge,for consumption in flight.For the
purposes of this subsection,"accessories"means paper plates,plastic eating utensils,
napkins,paper cups,drinking straws,paper sacks or other disposable containers,or other
items which facilitate the consumption of the food.
(dd)in computing the tax base in the case of the sale or transfer of wireless telecommunication
equipment as an inducement to a customer to enter into or continue a contract for
telecommunication services that are taxable under Section 8A-470,gross proceeds of sales
or gross income does not include any sales commissions or other compensation received by
the retailer as a result of the customer entering into or continuing a contract for the
telecommunications services.
(ee)for the purposes of this Section, a sale of wireless telecommunication equipment to a person
who holds the equipment for sale or transfer to a customer as an inducement to enter into or
continue a contract for telecommunication services that are taxable under Section 8A-470 is
considered to be a sale for resale in the regular course of business.
(if)sales of alternative fuel as defined in A.R.S.§1-215,to a used oil fuel burner who has
received a Department of Environmental Quality permit to burn used oil or used oil fuel under
A.R.S. § 49-426 or § 49-480.
(gg)sales of food,beverages,condiments and accessories to a public educational entity,
pursuant to any of the provisions of Title 15, Arizona Revised Statutes;to the extent such
items are to be prepared or served to individuals for consumption on the premises of a public
educational entity during school hours.For the purposes of this subsection,"accessories"
means paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks
or other disposable containers, or other items which facilitate the consumption of the food.
(hh)sales of personal hygiene items to a person engaged in the business of and subject to tax
under Section 8A-444 of this code if the tangible personal property is furnished without
additional charge to and intended to be consumed by the person during his occupancy.
(ii)FOR THE PURPOSES OF THIS SECTION, THE DIVERSION OF GAS FROM A PIPELINE BY A
PERSON ENGAGED IN THE BUSINESS OF OPERATING A NATURAL OR ARTIFICIAL GAS
PIPELINE,FOR THE SOLE PURPOSE OF FUELING COMPRESSOR EQUIPMENT TO
PRESSURIZE THE PIPELINE, IS NOT A SALE OF THE GAS TO THE OPERATOR OF THE
PIPELINE.
SALES OF FOOD,BEVERAGES,CONDIMENTS AND ACCESSORIES TO A NONPROFIT
CHARITABLE ORGANIZATION THAT HAS QUALIFIED AS AN EXEMPT ORGANIZATION UNDER
26 U.S.0 SECTION 501(C)(3) AND REGULARLY SERVES MEALS TO THE NEEDY AND
INDIGENT ON A CONTINUING BASIS AT NO COST.FOR THE PURPOSES OF THIS
SUBSECTION,"ACCESSORIES"MEANS PAPER PLATES,PLASTIC EATING UTENSILS,
NAPKINS,PAPER CUPS,DRINKING STRAWS,PAPER SACKS OR OTHER DISPOSABLE
CONTAINERS, OR OTHER ITEMS WHICH FACILITATE THE CONSUMPTION OF THE FOOD.
(kk)SALES OF MOTOR VEHICLES THAT USE ALTERNATIVE FUEL AS DEFINED IN A.R.S. SECTION
43-1086 ON OR AFTER MAY 5, 1999.
Section 11.Section 8A-470 of the Tax Code of the City of Apache Junction is amended to read:
16
Sec. 8A-470. Telecommunication services.
(a)The tax rate shall be at an amount equal to three percent (3%) of the gross income from the
business activity upon every person engaging or continuing in the business of providing
telecommunication services to consumers within this City.
(1)Telecommunication services shall include:
(A)two-way voice,sound,and/or video communication over a communications
channel.
(B)one-way voice,sound,and/or video transmission or relay over a
communications channel.
(C)facsimile transmissions.
(D)providing relay or repeater service.
(E)providing computer interface services over a communications channel.
(F)time-sharing activities with a computer accomplished through the use of a
communications channel.
(2)Gross income from the business activity of providing telecommunication services to
consumers within this City shall include:
(A)all fees for connection to a telecommunication system.
(B)toll charges,charges for transmissions,and charges for other
telecommunications services;provided that such charges relate to
transmissions originating in the City and terminating in this State.
(C)fees charged for access to or subscription to or membership in a
telecommunication system or network.
(D)charges for monitoring services relating to a security or burglar alarm system
located within the City where such system transmits or receives signals or
data over a communications channel.
(b)Resale telecommunication services.Gross income from sales of telecommunication services
to another provider of telecommunication services for the purpose of providing the
purchaser's customers with such service shall be exempt from the tax imposed by this
Section;provided,however,that such purchaser is properly licensed by the City to engage
in such business.
(c)Interstate transmissions.Charges by a provider of telecommunication services for
transmissions originating in the City and terminating outside the State are exempt from the
tax imposed by this Section.
(d)Tax credit offset for franchise fees.There shall be allowed as an offset, up to the amount of
tax due, any amounts paid to the City for license fees or franchise fees, but such offset shall
not be allowed against taxes imposed by any other Section of this Chapter.Such offset shall
not be deemed in conflict with or violation of subsection 8A -400(b).
(e)However,gross income from the providing of telecommunication services by a cable
television system, as such system is defined in A.R.S. Section 9-505,shall be exempt from
the tax imposed by this Section.
(0 PREPAID CALLING CARDS.TELECOMMUNICATIONS SERVICES PURCHASED WITH A
PREPAID CALLING CARD THAT ARE TAXABLE UNDER SECTION 8A-460 ARE EXEMPT FROM
THE TAX IMPOSED UNDER THIS SECTION.
Section 12.Section 8A-475 of the Tax Code of the City of Apache Junction is amended to read:
Sec. 8A-475. Transporting for hire.
The tax rate shalt be at an amount equal to two percent (2%) of the gross income from the business
activity upon every person engaging or continuing in the business of providing the following forms of
17
transportation for hire from this City to another point within the State:
(a)transporting of persons or property by railroad:; PROVIDED, HOWEVER, THAT THE TAX IMPOSED
BY THIS SUBSECTION SHALL NOT APPLY TO TRANSPORTING FREIGHT OR PROPERTY FOR
HIRE BY A RAILROAD OPERATING EXCLUSIVELY IN THIS STATE IF THE TRANSPORTATION
COMPRISES A PORTION OF A SINGLE SHIPMENT OF FREIGHT OR PROPERTY, INVOLVING
MORE THAN ONE RAILROAD, EITHER FROM A POINT IN THIS STATE TO A POINT OUTSIDE
THIS STATE OR FROM A POINT OUTSIDE THIS STATE TO A POINT IN THIS STATE.FOR
PURPOSES OF THIS PARAGRAPH, "A SINGLE SHIPMENT' MEANS THE TRANSPORTATION
THAT BEGINS AT THE POINT AT WHICH ONE OF THE RAILROADS FIRST TAKES POSSESSION
OF THE FREIGHT OR PROPERTY AND CONTINUES UNTIL THE POINT AT WHICH ONE OF THE
RAILROADS RELINQUISHES POSSESSION OF THE FREIGHT OR PROPERTY TO A PARTY
OTHER THAN ONE OF THE RAILROADS.
(b)transporting of oil or natural or artificial gas through pipe or conduit.
(c)transporting of property by aircraft.
(d)transporting of persons or property by motor vehicle,including towing and the operation of
private car lines,as such are defined in Article VII,Chapter 14,Title 42,Arizona Revised
Statutes; provided, however, that the tax imposed by this subsection shall not apply to:
(1)gross income subject to the tax imposed by Article IV, Chapter 16, Title 28, Arizona
Revised Statutes.
(2)gross income derived from the operation of a governmentally adopted and controlled
program to provide urban mass transportation.
(3 )(Reserved)
(4)(Reserved)
Section 13.Section 8A-575 of the Tax Code of the City of Apache Junction is amended to read:
Sec.8A-575. Judicial review.(State Administration and Audits)
(a)Appeal of a State Board of Tax Appeals decision to the courts is valid only if all the provisions
of A.R.S. Section 42-124 are met.
(b)(Reserved)
(c)(Reserved)
(d)(Reserved)
(e)THE CIT( HAS THE BURDEN OF PROOF BY A PREPONDERANCE OF THE EVIDENCE IN ANY
COURT PROCEEDING REGARDING ANY FACTUAL ISSUE RELEVANT TO ASCERTAINING THE
TAX LIABILITY OF A TAXPAYER.THIS SUBSECTION DOES NOT ABROGATE ANY
REQUIREMENT OF THIS CHAPTER THAT REQUIRES A TAXPAYER TO SUBSTANTIATE AN
ITEM OF GROSS INCOME,EXCLUSION,EXEMPTION,DEDUCTION,OR CREDIT.THIS
SUBSECTION APPLIES TO A FACTUAL ISSUE IF A PREPONDERANCE OF THE EVIDENCE
DEMONSTRATES THAT:
(1)THE TAXPAYER ASSERTS A REASONABLE DISPUTE REGARDING THE ISSUE.
(2)THE TAXPAYER HAS FULLY COOPERATED WITH THE TAX COLLECTOR REGARDING
THE ISSUE,INCLUDING PROVIDING WITHIN A REASONABLE PERIOD OF TIME,
ACCESS TO AND INSPECTION OF ALL WITNESSES, INFORMATION AND DOCUMENTS
WITHIN THE TAXPAYER'S CONTROL, AS REASONABLY REQUESTED BY THE TAX
COLLECTOR.
(3)THE TAXPAYER HAS KEPT AND MAINTAINED RECORDS AS REQUIRED BY THE CITY.
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The issuance of an adjusted or corrected assessment or notice of refund due to the taxpayer, where
made by the Tax Collector pursuant to the decision of the Hearing Officer, shall not be deemed an
acquiescence by the City or the Tax Collector in said decision, nor shall it constitute a bar or estoppel
to the institution of an action or counterclaim by the City to recover any amounts claimed to be due
to it by virtue of the original assessment.
(1)(g)After the initiation of any action in the appropriate court by either party, the opposite party may file
such counterclaim as would be allowed pursuant to the Arizona Rules of Civil Procedure.
Sec.8A-575. Judicial review.(Local Audits)
(a)A taxpayer may seek judicial review of all or any part of a Hearing Officer's decision by
initiating an action against the City in the appropriate Court of this County.A taxpayer is not
required to pay any tax, penalty, or interest upheld by the hearing officer before seeking such
judicial review.
(b)The Tax Collector may seek judicial review of all or any part of a Hearing Officer's decision
by initiating an action in the appropriate Court of this County.
(c)An action for judicial review can not be commenced by either the taxpayer or the Tax
Collector more than thirty (30) days after receipt by the taxpayer of notice of any refund or
assessment recalculated or reduced to conform to the Hearing Officer's decision, unless the
time to commence such an action is extended in writing signed by both the taxpayer and the
Tax Collector.Failure to bring the action within thirty (30) days or such other time as is
agreed upon in writing shall constitute a waiver of any right to judicial review,except as
provided in subsection (f) below.
(d)The court shall hear and determine the appeal as a trial de novo; however, the Tax Collector
cannot raise in the court any grounds or basis for the assessment not asserted before the
Hearing Officer.Nothing in this subsection,however,shall preclude the Tax Collector from
responding to any arguments which are raised by the taxpayer in the appeal.
(e)THE CITY HAS THE BURDEN OF PROOF BY A PREPONDERANCE OF THE EVIDENCE IN ANY
COURT PROCEEDING REGARDING ANY FACTUAL ISSUE RELEVANT TO ASCERTAINING THE
TAX LIABILITY OF A TAXPAYER.THIS SUBSECTION DOES NOT ABROGATE ANY
REQUIREMENT OF THIS CHAPTER THAT REQUIRES A TAXPAYER TO SUBSTANTIATE AN
ITEM OF GROSS INCOME,EXCLUSION,EXEMPTION,DEDUCTION,OR CREDIT.THIS
SUBSECTION APPLIES TO A FACTUAL ISSUE IF A PREPONDERANCE OF THE EVIDENCE
DEMONSTRATES THAT:
(e)(f)
((g)
(1)THE TAXPAYER ASSERTS A REASONABLE DISPUTE REGARDING THE ISSUE.
(2)THE TAXPAYER HAS FULLY COOPERATED WITH THE TAX COLLECTOR REGARDING
THE ISSUE,INCLUDING PROVIDING WITHIN A REASONABLE PERIOD OF TIME,
ACCESS TO AND INSPECTION OF ALL WITNESSES, INFORMATION AND DOCUMENTS
WITHIN THE TAXPAYER'S CONTROL, AS REASONABLY REQUESTED BY THE TAX
COLLECTOR.
(3)THE TAXPAYER HAS KEPT AND MAINTAINED RECORDS AS REQUIRED BY THE CITY.
The issuance of an adjusted or corrected assessment or notice of refund due to the taxpayer, where
made by the Tax Collector pursuant to the decision of the Hearing Officer, shall not be deemed an
acquiescence by the City or the Tax Collector in said decision, nor shall it constitute a bar or estoppel
to the institution of an action or counterclaim by the City to recover any amounts claimed to be due
to it by virtue of the original assessment.
After the initiation of any action in the appropriate court by either party, the opposite party may file
such counterclaim as would be allowed pursuant to the Arizona Rules of Civil Procedure.
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Section 14.Regulation 8A-100.4 of the Tax Code of the City of Apache Junction is amended to
read:
Reg. 8A-100.4.Out-of-City/Out-of-State Sales:Sales to Indians NATIVE AMERICANS.
Sales to Indians NATIVE AMERICANS or tribal councils by vendors located within the City shall be deemed
sales within the City, unless all of the following conditions exist:
(1)The vendor has properly accounted for such sales, in a manner similar to the recordkeeping
requirements for out -of -City sales; and,
(2)All of the following elements of the sale exist:
(A)solicitation and placement of the order occurs on the reservation; and
(B)delivery is made to the reservation; and
(C)payment originates from the reservation.
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