HomeMy WebLinkAboutORD1284ORDINANCE NO. 1284
AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF
APACHE JUNCTION,ARIZONA,RELATING TO THE PRIVILEGE
LICENSE TAX; ADOPTING "THE 2007 AMENDMENTS TO THE TAX
CODE OF THE CITY OF APACHE JUNCTION" BY REFERENCE;
REPEALING -CONFLICTING-PROVISIONS;PROVIDING FOR
SEVERABILITY;PROVIDING PENALTIES FOR VIOLATIONS;
ESTABLISHING EFFECTIVE DATES; AND DECLARING AN EMERGENCY.
WHEREAS, on September 1, 1987, the City of Apache
Junction adopted the "Tax Code of the City of Apache
Junction, Arizona"; and
WHEREAS, the adoption of this tax code recommended by
the Municipal Sales Tax Commission and mandated by Arizona
Revised Statutes, Title 42 Taxation is applicable to all
Arizona cities and towns; and
WHEREAS, periodically the Arizona State Legislature
makes changes to this state-wide tax code which in turn must
be adopted by all Arizona cities and towns.
BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
APACHE JUNCTION, ARIZONA:
SECTION I.ADOPTING BY REFERENCE
That certain document known as "The 2007 Amendments to the Tax Code
of the City of Apache Junction," three copies of which are on file
in the office of the city clerk of the City of Apache Junction,
Arizona, which document was made a public record by Resolution No.
06-54 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 II.REPEALING CONFLICTING PROVISIONS
All ordinances and parts of ordinances in conflict with the
provisions of this ordinance or any part of the codes adopted
herein by reference are hereby repealed.
ORDINANCE NO. 1284
PAGE 1 OF 3
SECTION III PROVIDING FOR SEVERABILITY
If any section, subsection, sentence, phrase, clause or portion of
this ordinance or any part of the codes 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 IV PROVIDING PENALTIES FOR VIOLATION
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.
SECTION V ESTABLISHING EFFECTIVE DATES
The provisions of section 1 of the Amendment as it relates to the
definition of "transient," section 3 of the Amendment as it relates
to subsections 8A -410(b)(3) through (5) and (c) of the Tax Code of
the City of Apache Junction and sections 7, 8, 12, and 13 of the
Amendment-shall be effective from and after January 1, 2007.
The provisions of section 3 of the Amendment as it relates to
subsection 8A -410(b)2)of the Tax Code of the City of Apache
Junction shall be effective from and after July 1, 1999.
The provisions of sections 4, 5 and 6 of the Amendment shall be
effective from and after September 1, 2006.
SECTION VI DECLARING AN EMERGENCY
The immediate operation of the provision of this ordinance is
necessary for the immediate preservation of the public peace,
health or safety, end that an emergency is hereby declared to
exist; end this ordinance shall be in full force and effect from
and after its passage, adoption and approval by the mayor and city
council of the City of Apache Junction.
ORDINANCE NO. 1284
PAGE 2 OF 3
PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF
APACHE JUNCTION, ARIZONA, THIS 5TH DAY OF DECEMBER , 2006.
SIGNED AND ATTESTED TO THIS 5TH DAY OF DECEMBER 2006.
ATTEST:
DOUGLAS COLEMAN
Mayor
KATHLEEN CONNELLY
City Clerk
APPROVED AS TO FORM:
1 1 2 0 0 G
RICHARD J. STERN
City Attorney.
ORDINANCE NO. 1284
PAGE 3 OF 3
2007 AMENDMENTS TO THE
TAX CODE OF THE CITY OF APACHE JUNCTION
Section 1.Section 8A-100 of the Tax Code of the City of Apache
Junction is amended to read:
Sec. 8A-100.General Definitions.
For the purposes of this Chapter, the following definitions apply:
"Assembler"means a person who unites or combines products, wares,
or articles of manufacture so as to produce a change in form or
substance of such items without changing or altering component
parts.
"Broker"means any person engaged or continuing in business who
acts for another for a consideration in the conduct of a business
activity taxable under this Chapter,and who receives for his
principal all or part of the gross income from the taxable
activity.
"Business"means all activities or acts, personal or corporate,
engaged in and caused to be engaged in with the object of gain,
benefit, or advantage, either direct or indirect, but not casual
activities or sales.
"Business Day"means any day of the week when the Tax Collector's
office is open for the public to conduct the Tax Collector's
business.
"Casual Activity or Sale"means a transaction of an isolated nature
made by a person who neither represents himself to be nor is
engaged in a business subject to a tax imposed by this Chapter.
However, no sale, rental,license for use, or lease transaction
concerning real property nor any activity entered into by a
business taxable by this Chapter shall be treated, or be exempt, as
casual.This definition shall include sales of used capital
assets, provided that the volume and frequency of such sales do not
indicate that the seller regularly engages in selling such
property.
"Combined Taxes"means the sum of all applicable Arizona
Transaction Privilege and Use Taxes; all applicable transportation
taxes imposed upon gross income by this County as authorized by
Article III, Chapter 6, Title 42, Arizona Revised Statutes; and all
applicable taxes imposed by this Chapter.
"Commercial Property"is any real property,or portion of such
property, used for any purpose other than lodging or lodging space,
including structures built for lodging but used otherwise, such as
model homes, apartments used as offices, etc.
Page 1 of 29,
"Communications Channel"means any line, wire, cable, microwave,
radio signal,light beam,telephone,telegraph,or any other
electromagnetic means of moving a message.
"Construction Contracting"refers to the activity of a construction
contractor.
"Construction Contractor"means a person who undertakes to or
offers to undertake to,or purports to have the capacity to
undertake_to,_or_submits_a bid to, or does himself or by or through
others, construct, alter, repair, add to, subtract from, improve,
move, wreck, or demolish any building, highway,road, railroad,
excavation,or other structure,project,development,or
improvement to real property,or to do -any part thereof.
"Construction contractor"includes subcontractors,specialty
contractors,prime contractors,and any person receiving
consideration for the general supervision and/or coordination of
such a construction project except for remediation contracting.
This definition shall govern without regard to whether or not the
construction contractor is acting in fulfillment of a contract.
"Delivery (of Notice)by the Tax Collector"means "receipt (of
notice) by the taxpayer".
"Delivery, Installation, or Other Direct Customer Services"means
services or labor, excluding repair labor, provided by a taxpayer
to or for his customer at the time of transfer of tangible personal
property;provided further that the charge for such labor or
service is separately billed to the customer and maintained
separately in the taxpayer's books and records.
"Engaging",when used with reference to engaging or continuing in
business, includes the exercise of corporate or franchise powers.
"Equivalent Excise Tax"means either:
(1) a Privilege or Use Tax levied by another Arizona
municipality upon the transaction in question, and paid
either to such Arizona municipality directly or to the
vendor; or
(2) an excise tax levied by a political subdivision of a state
other than Arizona upon the transaction in question, and
paid either to such jurisdiction directly or to the
vendor; or
(3) an excise tax levied by a Native American Government
organized under the laws of the federal government upon
the transaction in question,and paid either to such
jurisdiction directly or to the vendor.
"Federal Government"means the United States Government,its
departments and agencies;but not including national banks or
federally chartered or insured banks,savings and loan
institutions, or credit unions.
Page 2 of 29
"Food"means any items intended for human .consumption as defined by
rules and regulations adopted by the Department of Revenue, State
of Arizona,pursuant to A.R.S.Section 42-5106.Under no
circumstances shall "food" include alcoholic beverages or tobacco,
or food items purchased for use in conversion to any form of
alcohol by distillation, fermentation, brewing, or other process.
"Hotel"means any public or private hotel, inn, hostelry, tourist
home, house, motel,rooming house, apartment house,trailer, or
other lodging _place within the City offering lodging, wherein the
owner thereof,for compensation,furnishes lodging to any
transient, except foster homes, rest homes, sheltered care homes,
nursing homes, or primary health care facilities.
"Job Printing"means the activity of copying or reproducing an
article by any means, process, or method."Job printing" includes
engraving of printing plates, embossing, copying, micrographics,
and photo reproduction.
"Lessee"includes the equivalent person in a rental
agreement for all purposes of this Chapter.
"Lessor"includes the equivalent person in a rental
agreement for all purposes of this Chapter.
or licensing.
or licensing
"Licensing (for Use)"means any agreement between the user
("licensee") and the owner or the owner's agent ("licensor") for
the use of the licensor's property whereby the licensor receives
consideration, where such agreement does not qualify as a "sale" or
"lease" or "rental" agreement.
"Lodging (Lodging Space)"means any room or apartment in a hotel or
any other provider of rooms, trailer spaces, or other residential
dwelling spaces; or the furnishings or services and accommodations
accompanying the use and possession of said dwelling space,
including storage or parking space for the property of said tenant.
"Manufactured Buildings"means a manufactured home, mobile home or
factory built building, as defined in A.R.S. Section 41-2142.
"Manufacturer"means a person engaged or continuing in the business
of fabricating, producing,or manufacturing products, wares,or
articles for use from other forms of tangible personal property,
imparting to such new forms,qualities,properties,and
combinations.
"Mining and Metallurgical Supplies"means all tangible personal
property acquired by persons engaged in activities defined in
Section 8A-432 for such use.This definition shall not include:
(1) janitorial equipment and supplies.
(2) office equipment, office furniture, and office supplies.
(3) motor vehicles licensed for use upon the highways of the
State.
Page 3 of 29
"Modifier"means a person who reworks,changes,or adds to
products, wares, or articles of manufacture.
"Nonprofit Entity"means any entity organized and operated
exclusively for. charitable purposes, or operated by the Federal
Government, the State, or any political subdivision of the State.
"Occupancy (of Real Property)"means any occupancy or use, or any
right to occupy or use, real property including any improvements,
rights, or interests in such property.
"Out -of -City Sale"means the sale of tangible personal property and
job printing if all of the following occur:
(1)transference of title and possession occur without the
City; and
(2)the stock from which such personal property was taken was
not within the corporate limits of the City; and
(3)the order is received at a permanent business location of
the seller located outside the City; which location is
used for the substantial and regular conduct of such
business sales activity.In no event shall the place of
business of the buyer be determinative of the situs of the
receipt of the order.
For the purpose of this definition it does not matter that all
other indicia of business occur within the City, including, but not
limited to,accounting,invoicing,.payments,centralized
purchasing, and supply to out -of -City storehouses and out -of -City
retail branch outlets from a primary storehouse within the City.
"Out -of -State Sale"means the sale of tangible personal property
and job printing if all of the following occur:
(1) The order is placed from without the State of Arizona; and
(2) the order is placed by other than a resident of the State
to be determined in a manner similar to "resides within
the City"; and
(3) the property is delivered to the buyer at a location
outside the State; and
(4)the property is purchased for use outside the State.
"Owner -Builder"means an owner or lessor of real property who, by
himself or by or through others, constructs or has constructed or
reconstructs or has reconstructed any improvement to real property.
"Person"means an individual,firm, partnership,joint venture,
association,corporation,estate,trust,receiver,syndicate,
broker,the Federal Government,this State,or any political
subdivision or agency of this State.For the purposes of this
Chapter,a person shall be considered a distinct and separate
person from any general or limited partnership or joint venture or
other association with which such person is affiliated.A
subsidiary corporation shall be considered a separate person from
its parent corporation for purposes of taxation of transactions
with its parent corporation.
Page 4 of 29
"Prosthetic"means any of the following tangible personal property
if such items are prescribed or recommended by a licensed
podiatrist,chiropractor,dentist,physician or surgeon,
naturopath,optometrist,osteopathic physician or surgeon,
psychologist,hearing aid dispenser,physician assistant,nurse
practitioner or veterinarian:
(1) any man-made device for support or replacement of a part
of the body, or to increase acuity of one of the senses.
Such items include:prescription eyeglasses;contact
lenses;_hearing _aids_;artificial limbs or teeth; neck,
back, arm, leg, or similar braces.
insulin,insulin syringes, and glucose test strips sold
with or without a prescription.
hospital beds, crutches, wheelchairs,
aids, or corrective shoes.
drugs or medicine, including oxygen.
equipment used to generate,monitor,
support systems,such as respiratory
concentrator, dialysis machine.
durable medical equipment which has a federal health care
financing administration common procedure code,is
designated reimbursable by Medicare,can withstand
repeated use, is primarily and customarily used to serve a
medical purpose,is generally not useful to a person in
the absence of illness or injury and is appropriate for
use in the home.
(2)
(3)
(4)
(5)
(6)
similar home health
or provide health
equipment,oxygen
"Qualifying Community Health Center"
1)means an entity that is recognized as nonprofit under
Section 501(c)(3) of the United States Internal Revenue Code,
that is a community -based,primary care clinic that has a
community -based board of directors and that is either:
a)the sole provider of primary care in the community.
b)a nonhospital affiliated clinic that is located in a
federally designated medically underserved area in this
State.
2)includes clinics that are being constructed as qualifying
community health centers.
"Qualifying Health Care Organization"means an entity that is
recognized as nonprofit under Section 501(c) of the United States
Internal Revenue Code and that uses,saves or invests at least
eighty percent (80%)of all monies that it receives from all
sources each year only for health and medical related educational
and charitable services, as documented by annual financial audits
prepared by an independent certified public accountant, performed
according to generally accepted accounting standards and filed
annually with the Arizona Department of Revenue.Monies that are
used, saved or invested to lease, purchase or -construct a facility
for health and medical related education -and charitable services
are included in the eighty percent (80%) requirement.
Page 5of 29
"Qualifying Hospital"means any of the following:
(1) a licensed hospital which is organized and operated
exclusively for charitable purposes, no part of the net
earnings of which inures to the benefit of any private
shareholder or individual.
(2) a licensed nursing care institution or a licensed
residential care institution or a residential care
facility operated in conjunction with a licensed nursing
care institution or a licensed kidney dialysis center,
which -provides medical services,nursing services or
health related services and is not used or held fOr
profit.
(3) a hospital, nursing care institution or residential care
institution which is operated by the federal government,
this State or a political subdivision of this State.
(4) a facility that is under construction and that on
completion will be a facility under subdivision (1),(2)
or (3) of this paragraph.
"Receipt (of Notice) by the Taxpayer"means the earlier of actual
receipt or the first attempted delivery by certified United States
mail to the taxpayer's address of record with the Tax Collector.
"Remediation"means those actions that are reasonable, necessary,
cost-effective and technically feasible in the event of the release
or threat of release of hazardous substances into the environment
such that the waters of the State are or may be affected,such
actions as may be necessary to monitor, assess and evaluate such
release or threat of release, actions of remediation, removal or
disposal of hazardous substances or taking such other actions as
may be necessary to prevent, minimize or mitigate damage to the
public health or welfare or to the waters of the State which may
otherwise result from .a release or threat of release of a hazardous
substance that will or may affect the waters of the State.
Remediation activities include the use of biostimulation with
indigenous microbes and bioaugmentation using microbes that are
nonpathogenic, nonopportunistic and that are naturally occurring.
Remediation activities may include community information and
participation costs and providing an alternative drinking water
supply.
"Rental Equipment"means tangible personal property sold, rented,
leased, or licensed to customers to the extent that the item is
actually used by the customer for rental,lease,or license to
others; provided that:
(1) the vendee is regularly engaged in the business of
renting,leasing,or licensing such property for a
consideration;and
(2) the item so claimed as "rental equipment" is not used by
the person claiming the exemption for any purpose other
than rental,lease,or license for compensation,to an
extent greater than fifteen percent (15%) of its actual
use.
Page 6 of 29
"Rental Supply"means an expendable or nonexpendable repair or
replacement part sold to become part of "rental equipment",
provided that:
(1) the documentation relating to each purchased item so
claimed specifically itemizes to the vendor the actual
item of "rental equipment" to which the purchased item is
intended to be attached as a repair or replacement part;
and
(2) the vendee is regularly engaged in the business of
renting,leasing,or licensing such property for a
consideration; and
(3) the item so claimed as "rental equipment" is not used by
the person claiming the exemption for any purpose other
than rental,lease,or license for compensation,to an
extent greater than fifteen percent (15%) of its actual
use.
"Repairer"means a person who restores or renews products, wares,
or articles of manufacture.
"Resides within the City"means in cases other than individuals,
whose legal addresses are determinative of residence, the engaging,
continuing, or conducting of regular business activity within the
City.
"Restaurant"means any business activity where articles of food,
drink, or condiment are customarily prepared or served to patrons
for consumption on or off the premises,also including bars,
cocktail lounges, the dining rooms of hotels, and all caterers.
For the purposes of this Chapter, a "fast food" business, which
includes street vendors and mobile vendors selling in public areas
or at entertainment or sports or similar events, who prepares or
sells food or drink for consumption on or off the premises is
considered a "restaurant", and not a "retailer".
"Retail Sale (Sale at Retail)"means the sale of tangible personal
property, except the sale of tangible person property to a person
regularly engaged in the business of selling such property.
"Retailer"means any person engaged or continuing in the business
of sales of tangible personal property at retail.
"Sale"means any transfer of title or possession,or both,
exchange, barter, conditional or otherwise, in any manner or by any
means whatsoever, including consignment transactions and auctions,
of property for a consideration."Sale" includes any transaction
whereby the possession of such property is transferred but the
seller retains the title as security for the payment of the price.
"Sale" also includes the fabrication of tangible personal property
for consumers who, in whole or in part, furnish either directly or
indirectly the materials used in such fabrication work.
Page 7 of 29
"Speculative Builder"means either:
(1) an owner -builder who sells or contracts to sell,at
anytime,improved real property (as provided in Section
8A-416) consisting of:
A)custom, model, or inventory homes, regardless of the
stage of completion of such homes; or
B)improved residential or commercial lots without a
structure; or
(2) an owner -builder who sells or contracts to sell improved
--real property, other than improved real property specified
in subsection (1) above:
A)prior to completion; or
B)before the expiration of twenty-four (24) months after
the improvements of the real property sold are
substantially complete.
"Substantially Complete"means the construction contracting or
reconstruction contracting:
(1) has passed final inspection or its equivalent; or
(2) certificate of occupancy or its equivalent has been
issued; or
(3)is ready for immediate occupancy or use.
"Supplier"means any person who rents, leases, licenses, or makes
sales of tangible personal property -within the City,either
directly to the consumer or customer or to wholesalers, jobbers,
fabricators, manufacturers, modifiers, assemblers, repairers, or
those engaged in the business of providing services which involve
the use,sale,rental,lease,or license of tangible personal
property.
"Tax Collector"means the Revenue Officer/City Clerk or their
designee or agent for all purposes under this Chapter.
"Taxpayer"means any person liable for any tax under this Chapter.
"Taxpayer Problem Resolution Officer"means the individual
designated by the City to perform the duties identified in Sections
8A-515 and 8A-516.In cities with a population of 50,000 or more,
the Taxpayer Problem Resolution Officer shall be an employee of the
City.In cities with a population of less than 50,000,the
Taxpayer Problem Resolution Officer need not be an employee of the
City.Regardless of whether the Taxpayer Problem Resolution
Officer is or is not an employee of the City, the Taxpayer Problem
Resolution Officer shall have substantive knowledge of taxation.
The identity of and telephone number for the Taxpayer Problem
Resolution Officer can be obtained from the Tax Collector.
-"Telecommunication Service"means any service or activity connected
with the transmission or relay of sound,visual image,data,
information, images, or material over a communications channel or
,any combination of communications channels.
Page 8 of 29
"Transient" means any person who either at the person's own expense
or at the expense of another obtains lodging space or the use of
lodging space on a daily or weekly basis, or on other basis for
less than thirty (30) consecutive days.
"Utility Service"means the producing, providing, or furnishing of
electricity,electric lights,current,power,gas (natural or
artificial), or water to consumers or ratepayers.
Section -2,Section liAr.266of the Tax_Code_of the City of Apache
Junction is amended to read:
Section 8A-266.Exclusion of motor carrier revenues from gross
income.
There shall be excluded from gross income the gross proceeds of
sale or gross income derived from any of the following:
(a) A motor carrier's use on the public highways in this State if
the motor carrier is subject to a fee prescribed in A.R.S.
Title 28, Chapter 15, Article 4 or A.R.S. Title 28, Chapter 16,
Article 4.
(b) Leasing, renting or licensing a motor vehicle subject to and
upon which the fee has been paid under A.R.S. Title 28, Chapter
16.
(c) 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 A.R.S. Title 28, Chapter 16 and who is engaged
in the business of leasing, renting or licensing such property.
(d)For the purposes of these exclusions, "motor carrier" includes
a motor vehicle weighing 26,000 pounds or more, a lightweight
motor vehicle which weighs 12,001 pounds .to 26,000 pounds and a
light motor vehicle weighing 12,000 pounds or less, which pay
the fee prescribed in A.R.S. Title 28, Chapter 15, Article 4 or
A.R.S. Title 28, Chapter 16.
Section 3.Section 8A-410 of the Tax Code of the City of Apache
Junction is amended to read:
Sec. 8A-410.Amusements, exhibitions, and similar activities.
(a) The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%) of the gross income from the business activity
upon every person engaging or continuing in the business of
providing amusement that begins in the City or takes place
entirely within the City, which includes the following type or
nature of businesses:
Page 9 of 29
(1) operating or conducting theaters, movies, operas, shows of
any type or nature,exhibitions,concerts,carnivals,
circuses,amusement parks,-menageries,fairs,races,
contests, games, billiard or pool parlors, bowling alleys,
skating rinks, tennis courts, golf courses, video games,
pinball machines,public dances,dance halls,sports
events,jukeboxes,batting and driving ranges,animal
rides,or any other business charging admission for
exhibition, amusement, or entertainment.
- 12) health -spas, -fitness centers,dance studios,or other
persons who charge for the use of premises 'for sports,
athletic, other health -related activities or instruction,
whether on a per -event use, or for long-term usage, such
as membership fees.
(b)Deductions or exemptions.The gross proceeds of sales or
gross income derived from the following sources is exempt from
the tax imposed by this Section:
(1)(Reserved)
(2) Amounts retained by the Arizona Exposition and State Fair
Board from ride ticket sales at the annual Arizona State
Fair.
(3) Income received from a hotel business subject to tax under
Section 8A-444, if all of the following apply:
(A) The hotel business receives gross income from a
customer for the specific business activity otherwise
subject to amusement tax.
(B) The consideration received by the hotel business is
equal to or greater than the amount to be deducted
under this subsection.
(C) The hotel business has provided an exemption
certificate to the person engaging in business under
this section.
(4)Income that is specifically included as the gross income
of a business activity upon which another Section of this
Article imposes a tax, that is separately stated to the
customer and is taxable to the person engaged in that
classification not to exceed consideration paid to the
person conducting the activity.
(5)Income from arranging transportation connected to
amusement activity that is separately stated to the
customer,not to exceed consideration paid to the
transportation business.
(c) The tax imposed by this Section shall not include arranging an
amusement activity as a service to a person's customers if that
person is not otherwise engaged in the business of operating or
conducting an amusement themselves or through others.This
exception does not apply to businesses that operate or conduct
amusements pursuant to customer orders and send the billings
and receive the payments associated with that activity,
including when the amusement is performed by third party
independent contractors. For the purposes of this paragraph,
Page 10 of 29
"arranging"includes billing for or collecting amusement
charges from a person's customers on behalf of the persons
providing the amusement.
Section 4.Section 8A-415 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-415.Construction contracting:Construction
contractors.
(a) The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%) 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 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 is
deducted from the retail classification pursuant to
Section 8A -465(g)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 exempt 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
Page 11 of 29
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 cleanrooms 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.
(8) The gross proceeds of sales or gross income received from
a post construction contract to perform post -construction
treatment of real property for termite and general pest
control,including wood destroying organisms,shall be
exempt from tax imposed under this Section.
(9) Through December 31, 2009, the gross proceeds of sales or
gross income received from a contract for constructing any
lake facility development in a commercial enhancement
reuse district that is designated pursuant to A.R.S. § 9-
499.08 if the contractor maintains the following records
in a form satisfactory to the Arizona Department of
Revenue and to the City:
(A) The certificate of qualification of the lake facility
development issued by the City pursuant to A.R.S. § 9-
499.08, subsection D.
(B) All state and local transaction privilege tax returns
for the period of time during which the contractor
received gross proceeds of sales or gross income from
Page 12 of 29
a contract to construct a lake facility development in
a designated commercial enhancement reuse district,
showing the amount exempted from state and local
taxation.
(C) Any other information considered to be necessary.
(10)Development or impact fees included in a construction or
development contract for payment to the state or local
government to offset governmental costs of providing
public infrastructure,public safety and other public
services_to a development.
(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
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 5.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 and two -tenths percent (2.2t) 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
Page 13 of 29
(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
(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.
Page 14 of 29
(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, 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:
_ _(iY 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 bf.,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 cleanrooms 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.
(E) Development or impact fees included in a construction
or development contract for payment to the state or
local government to offset governmental costs of
providing public infrastructure,public safety and
other public services to a development.
(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 a contract entered into for the
installation,assembly,repair or maintenance of
income -producing capital equipment,as defined in
Section 8A-110,that is deducted from the retail
classification pursuant to Section 8A -465(g),that
does not become a permanent attachment to a building,
Page 15 of 29
highway,road,railroad,excavation or manufactured
building or other structure, project, development or
improvement shall be exempt 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 6.Section 8A-417 of the Tax Code of the City of Apache
Junction is amended to read:
Section 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
Page 16 of 29
for an owner -builder who is not' a •speculative builder shall be
at an amount equal to two and two -tenths percent (2.2%) 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, 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 cleanrooms 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.
(E) Development or impact fees included in a construction
or development contract for payment to the state or
local government to offset governmental costs of
providing public infrastructure,public safety and
other public services to a development.
Page 17 of 29
(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 a contract entered into for the
installation,assembly,repair or maintenance of
income -producing capital equipment,as defined in
Section 8A-110,that is deducted from the retail
classification pursuant to Section 8A -465(g),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 exempt 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
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.
Page 18 of 29
(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 7.Section 8A-444 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-444.Hotels.
The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%) 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) Exclusions. The tax imposed by this Section shall not include:
(1) 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.
(2) Gross proceeds of sales or gross income that is properly
included in another business activity under this Article
and that is taxable to the person engaged in that business
activity, but the gross proceeds of sales or gross income
to be deducted shall not exceed the consideration paid TO
the person conducting the activity.
(3) Gross proceeds of sales or gross income from transactions
or activities that are not limited to transients and that
would not be taxable if engaged in by a person not subject
to tax under this Article.
(4) Gross proceeds of sales or gross income from transactions
or activities that are not limited to transients and that
would not be taxable if engaged in by a person subject to
taxation under Section 8A-410 or Section 8A-475 due to an
exclusion, exemption or deduction.
(5) Gross proceeds of sales or gross income from commissions
received from a person providing services or property to
the customers of the hotel. However, such commissions may
be subject to tax under Section 8A-445 or Section 8A-450
as rental,leasing or licensing for use of real or
tangible personal property.
(6) Income from providing telephone, fax or Internet services
to customers at an additional charge, that is separately
stated to the customer and is separately maintained in the
hotel's books and records. However, such gross proceeds of
Page 19 of 29
sales or gross income may be subject to tax under
Section 8A-470 as telecommunication services.
Section 8.Section 8A-447 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-447.Rental, leasing, and licensing for use of real
property:additional tax upon transient lodging.
In addition to the taxes levied as provided in Section 8A-444,
there is hereby levied and shall be collected an additional tax in
an amount equal to two percent (2%) of the gross income from the
business activity of any hotel engaging or continuing within the
City in the business of charging for lodging and/or lodging space
furnished to any transient.
Section 9.Section 8A-450 of the Tax Code of the City of Apache
Junction is amended to read::
Section 8A-450.Rental, leasing, and licensing for use of tangible
personal property.
(a) The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%) 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
Page 20 of 29
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,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 an alternative
fuel vehicle if such vehicle was manufactured as a diesel
fuel vehicle and converted to operate on alternative fuel
and equipment that is installed in a conventional diesel
fuel motor vehicle to convert the vehicle to operate on an
alternative fuel, as defined in A.R.S. Section 1-215.
Section 10.Section 8A-455 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-455.Restaurants and Bars.
(a) The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%) of the gross income from the business activity
upon every person engaging or continuing in the business of
preparing or serving food or beverage in a bar,cocktail
Page 21 of 29
lounge, restaurant, or similar establishment where articles of
food or drink are prepared or served for consumption on or off
the premises, including also the activity of catering.Cover
charges and minimum charges must be included in the gross
income of this business activity.
(b) Caterers and other taxpayers subject to the tax who deliver
food and/or serve such food off premises shall also be allowed
to exclude separately charged delivery, set-up, and clean-up
charges,provided that the charges are also maintained
separately in the books and records.When a taxpayer delivers
food and/or serves such food off premises, his regular business
location shall still be deemed the location of the transaction
for the purposes of the tax imposed by this Section.
(c) The tax imposed by this Section shall not apply to sales to a
qualifying hospital, qualifying community health center or a
qualifying health care organization, except when sold for use
in activities resulting in gross income from unrelated business
income as that term is defined in 26 U.S.C. Section 512.
(d) The tax imposed by this Section shall not apply to 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)49, that serves the food and beverages to
its passengers, without additional charge, for consumption in
flight.
(e) The tax imposed by this Section shall not apply to sales of
prepared food, beverages, condiments or 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.
(f) For the purposes of this Section,"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.
Section 11.Section 8A-465 of the Tax Code of the City of Apache
Junction is amended to read:
Section 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.
Page 22 of 29
(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.
(f) sales of prosthetics.
(g) sales of income -producing capital equipment.
(h)sales of rental equipment and rental supplies.
(i)sales of mining and metallurgical supplies.
(j)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.
(1) 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 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.
Page 23 of 29
(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.
(p) 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.
(q)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)
Page 24 of 29
(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:
(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 49),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.
(ff)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
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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.
(ii)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 if
such vehicle was manufactured as a diesel fuel vehicle and
converted to operate on alternative fuel and sales of
equipment that is installed in a conventional diesel fuel
motor vehicle to convert the vehicle to operate on an
alternative fuel, as defined in A.R.S. Section 1-215.
Section 12.Section 8A-470 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-470.Telecommunication services.
(a) The tax rate shall be at an amount equal to three and two-
tenths percent (3.2%) 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.
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(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.
(E) charges for telephone, fax or Internet access services
provided at an additional charge by a hotel business
subject to taxation under Section 8A-444.
(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.
(f)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.
(g)Internet Access Services - the gross income subject to tax
under this section shall not include sales of internet access
services to the person's subscribers and customers.For the
purposes of this subsection:
(1)"Internet"means the computer and telecommunications
facilities that comprise the interconnected worldwide
network of networks that employ the transmission control
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protocol or internet protocol,or any predecessor or
successor protocol,to communicate information of all
kinds by wire or radio.
(2)"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.
Section 13.Section 8A-475 of the Tax Code of the City of Apache
Junction is amended to read:
Section 8A-475.Transporting for hire.
The tax rate shall be at an amount equal to two and two -tenths
percent (2.2%-) of the gross income from the business activity upon
every person engaging or continuing in the business of providing
the following forms of 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:
(I) 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)
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(e)(Reserved)
(f)Deductions or exemptions.The gross proceeds of sales or gross
income derived from the following sources is exempt from the
tax imposed by this Section:
(1)income that is specifically included as the gross income
of a business activity upon which another Section of
Article IV imposes a tax, that is separately stated to the
customer and is taxable to the person engaged in that
classification not to exceed consideration paid to the
person conducting the activity.
(2)income from arranging amusement or transportation when the
amusement or transportation is conducted by another person
not to exceed consideration paid to the amusement or
transportation business.
(g) The tax imposed by this Section shall not include arranging
transportation as a convenience to a person's customers if that
person is not otherwise engaged in the business of transporting
persons, freight or property for hire. This exception does not
apply to businesses that dispatch vehicles pursuant to customer
orders and send the billings and receive the payments
associated with that activity,including when the
transportation is performed by third party independent
contractors. For the purposes of this paragraph,"arranging"
includes billing for or collecting transportation charges from
a person's customers on behalf of the persons providing the
transportation.
Section 14.Regulation 8A-447.1 of the Tax Code of the City of
Apache Junction is repealed.
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