A.R.S. § 42-5061 — Arizona Code / Title 42 / Chapter 5 / Article 2 / Section 5061
42-5061 Retail classification; definitions
Status: in_force

42-5061. Retail classification; definitions

A. The retail classification is comprised of the business of selling tangible personal property at retail. The tax base for the retail classification is the gross proceeds of sales or gross income derived from the business. The tax imposed on the retail classification does not apply to the gross proceeds of sales or gross income from:

1. Professional or personal service occupations or businesses that involve sales or transfers of tangible personal property only as inconsequential elements.

2. Services rendered in addition to selling tangible personal property at retail.

3. Sales of warranty or service contracts. The storage, use or consumption of tangible personal property provided under the conditions of such contracts is subject to tax under section 42-5156.

4. Sales of tangible personal property by any nonprofit organization organized and operated exclusively for charitable purposes and recognized by the United States internal revenue service under section 501(c)(3) of the internal revenue code.

5. Sales to persons engaged in business classified under the restaurant classification of articles used by human beings for food, drink or condiment, whether simple, mixed or compounded.

6. Business activity that is properly included in any other business classification that is taxable under this article.

7. The sale of stocks and bonds.

8. Drugs and medical oxygen, including delivery hose, mask or tent, regulator and tank, if prescribed by a member of the medical, dental or veterinarian profession who is licensed by law to administer such substances.

9. Prosthetic appliances as defined in section 23-501 and as prescribed or recommended by a health professional who is licensed pursuant to title 32, chapter 7, 8, 11, 13, 14, 15, 16, 17 or 29.

10. Insulin, insulin syringes and glucose test strips.

11. Prescription eyeglasses or contact lenses.

12. Hearing aids as defined in section 36-1901.

13. Durable medical equipment that has a centers for medicare and medicaid services common procedure code, is designated reimbursable by medicare, is prescribed by a person who is licensed under title 32, chapter 7, 8, 13, 14, 15, 17 or 29, 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.

14. Sales of motor vehicles to nonresidents of this state for use outside this state if either of the following applies:

(a) The motor vehicle dealer ships or delivers the motor vehicle to a destination out of this state.

(b) The vehicle, trailer or semitrailer has a gross vehicle weight rating of more than ten thousand pounds, is used or maintained to transport property in the furtherance of interstate commerce and otherwise meets the definition of commercial motor vehicle as defined in section 28-5201.

15. Food, as provided in and subject to the conditions of article 3 of this chapter and sections 42-5074 and 42-6017.

16. Items purchased with United States department of agriculture coupons issued under the supplemental nutrition assistance program pursuant to the food and nutrition act of 2008 (P.L. 88-525; 78 Stat. 703; 7 United States Code sections 2011 through 2036b) by the United States department of agriculture food and nutrition service or food instruments issued under section 17 of the child nutrition act (P.L. 95-627; 92 Stat. 3603; P.L. 99-661, section 4302; P.L. 111-296; 42 United States Code section 1786).

17. Textbooks by any bookstore that are required by any state university or community college.

18. Food and drink to a person that is engaged in a business that is classified under the restaurant classification and that provides such food and drink without monetary charge to its employees for their own consumption on the premises during the employees' hours of employment.

19. Articles of food, drink or condiment and accessory tangible personal property to a school district or charter school if such articles and accessory tangible personal property are to be prepared and served to persons for consumption on the premises of a public school within the district or on the premises of the charter school during school hours.

20. Lottery tickets or shares pursuant to title 5, chapter 5.1, article 2.

21. The sale of cash equivalents and the sale of precious metal bullion and monetized bullion to the ultimate consumer, but the sale of coins or other forms of money for manufacture into jewelry or works of art is subject to the tax and the gross proceeds of sales or gross income derived from the redemption of any cash equivalent by the holder as a means of payment for goods or services that are taxable under this article is subject to the tax. For the purposes of this paragraph:

(a) "Cash equivalents" means items or intangibles, whether or not negotiable, that are sold to one or more persons, through which a value denominated in money is purchased in advance and may be redeemed in full or in part for tangible personal property, intangibles or services. Cash equivalents include gift cards, stored value cards, gift certificates, vouchers, traveler's checks, money orders or other instruments, orders or electronic mechanisms, such as an electronic code, personal identification number or digital payment mechanism, or any other prepaid intangible right to acquire tangible personal property, intangibles or services in the future, whether from the seller of the cash equivalent or from another person. Cash equivalents do not include either of the following:

(i) Items or intangibles that are sold to one or more persons, through which a value is not denominated in money.

(ii) Prepaid calling cards or prepaid authorization numbers for telecommunications services made taxable by subsection P of this section.

(b) "Monetized bullion" means coins and other forms of money that are manufactured from gold, silver or other metals and that have been or are used as a medium of exchange in this or another state, the United States or a foreign nation.

(c) "Precious metal bullion" means precious metal, including gold, silver, platinum, rhodium and palladium, that has been smelted or refined so that its value depends on its contents and not on its form.

22. Motor vehicle fuel and use fuel that are subject to a tax imposed under title 28, chapter 16, article 1, sales of use fuel to a holder of a valid single trip use fuel tax permit issued under section 28-5739, sales of aviation fuel that are subject to the tax imposed under section 28-8344 and sales of jet fuel that are subject to the tax imposed under article 8 of this chapter.

23. Tangible personal property sold to a person engaged in the business of leasing or renting such property under the personal property rental classification if such property is to be leased or rented by such person.

24. Tangible personal property sold in interstate or foreign commerce if prohibited from being so taxed by the constitution of the United States or the constitution of this state.

25. Tangible personal property sold to:

(a) A qualifying hospital as defined in section 42-5001.

(b) A qualifying health care organization as defined in section 42-5001 if the tangible personal property is used by the organization solely to provide health and medical related educational and charitable services.

(c) A qualifying health care organization as defined in section 42-5001 if the organization is dedicated to providing educational, therapeutic, rehabilitative and family medical education training for blind and visually impaired children and children with multiple disabilities from the time of birth to age twenty-one.

(d) A qualifying community health center as defined in section 42-5001.

(e) A nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code and that regularly serves meals to the needy and indigent on a continuing basis at no cost.

(f) For taxable periods beginning from and after June 30, 2001, a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code and that provides residential apartment housing for low-income persons over sixty-two years of age in a facility that qualifies for a federal housing subsidy, if the tangible personal property is used by the organization solely to provide residential apartment housing for low-income persons over sixty-two years of age in a facility that qualifies for a federal housing subsidy.

(g) A qualifying health sciences educational institution as defined in section 42-5001.

(h) Any person representing or working on behalf of another person described in subdivisions (a) through (g) of this paragraph if the tangible personal property is incorporated or fabricated into a project described in section 42-5075, subsection P.

26. Magazines or other periodicals or other publications by this state to encourage tourist travel.

27. Tangible personal property sold to:

(a) A person that is subject to tax under this article by reason of being engaged in business classified under section 42-5075 or to a subcontractor working under the control of a person engaged in business classified under section 42-5075, if the property so sold is any of the following:

(i) Incorporated or fabricated by the person into any real property, structure, project, development or improvement as part of the business.

(ii) Incorporated or fabricated by the person into any project described in section 42-5075, subsection P.

(iii) Used in environmental response or remediation activities under section 42-5075, subsection B, paragraph 6.

(b) A person that is not subject to tax under section 42-5075 and that has been provided a copy of a certificate under section 42-5009, subsection L, if the property so sold is incorporated or fabricated by the person into the real property, structure, project, development or improvement described in the certificate.

28. The sale of a motor vehicle to a nonresident of this state if the purchaser's state of residence does not allow a corresponding use tax exemption to the tax imposed by article 1 of this chapter and if the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01.

29. 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 in programs for persons with mental or physical disabilities if the programs are exclusively for training, job placement, rehabilitation or testing.

30. Sales of tangible personal property by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the organization is associated with a major league baseball team or a national touring professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual. This paragraph does not apply to an organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from taxation under section 42-5073.

31. Sales of commodities, as defined by title 7 United States Code section 2, that are consigned for resale in a warehouse in this state in or from which the commodity is deliverable on a contract for future delivery subject to the rules of a commodity market regulated by the United States commodity futures trading commission.

32. Sales of tangible personal property by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the internal revenue code if the organization sponsors or operates a rodeo featuring primarily farm and ranch animals and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

33. Sales of propagative materials to persons who use those items to commercially produce agricultural, horticultural, viticultural or floricultural crops in this state. For the purposes of this paragraph, "propagative materials":

(a) Includes seeds, seedlings, roots, bulbs, liners, transplants, cuttings, soil and plant additives, agricultural minerals, auxiliary soil and plant substances, micronutrients, fertilizers, insecticides, herbicides, fungicides, soil fumigants, desiccants, rodenticides, adjuvants, plant nutrients and plant growth regulators.

(b) Except for use in commercially producing industrial hemp as defined in section 3-311, does not include any propagative materials used in producing any part, including seeds, of any plant of the genus cannabis.

34. Machinery, equipment, technology or related supplies that are only useful to assist a person with a physical disability as defined in section 46-191 or a person who has a developmental disability as defined in section 36-551 or has a head injury as defined in section 41-3201 to be more independent and functional.

35. Sales of natural gas or liquefied petroleum gas used to propel a motor vehicle.

36. Paper machine clothing, such as forming fabrics and dryer felts, sold to a paper manufacturer and directly used or consumed in paper manufacturing.

37. Coal, petroleum, coke, natural gas, virgin fuel oil and electricity sold to a qualified environmental technology manufacturer, producer or processor as defined in section 41-1514.02 and directly used or consumed in generating or providing on-site power or energy solely for environmental technology manufacturing, producing or processing or environmental protection. This paragraph applies for twenty full consecutive calendar or fiscal years from the date the first paper manufacturing machine is placed in service. In the case of an environmental technology manufacturer, producer or processor that does not manufacture paper, the time period begins with the date the first manufacturing, processing or production equipment is placed in service.

38. Sales of liquid, solid or gaseous chemicals used in manufacturing, processing, fabricating, mining, refining, metallurgical operations, research and development and, beginning on January 1, 1999, printing, if using or consuming the chemicals, alone or as part of an integrated system of chemicals, involves direct contact with the materials from which the product is produced for the purpose of causing or allowing a chemical or physical change to occur in the materials as part of the production process. This paragraph 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 section. For the purposes of this paragraph, "printing" means a commercial printing operation and includes job printing, engraving, embossing, copying and bookbinding.

39. Through December 31, 1994, personal property liquidation transactions, conducted by a personal property liquidator. From and after December 31, 1994, personal property liquidation transactions shall be taxable under this section provided that nothing in this subsection shall be construed to authorize the taxation of casual activities or transactions under this chapter. For the purposes of this paragraph:

(a) "Personal property liquidation transaction" means a sale of personal property made by a personal property liquidator acting solely on behalf of the owner of the personal property sold at the dwelling of the owner or on the death of any owner, on behalf of the surviving spouse, if any, any devisee or heir or the personal representative of the estate of the deceased, if one has been appointed.

(b) "Personal property liquidator" means a person who is retained to conduct a sale in a personal property liquidation transaction.

40. Sales of food, drink and condiment for consumption within the premises of any prison, jail or other institution under the jurisdiction of the state department of corrections, the department of public safety, the department of juvenile corrections or a county sheriff.

41. A motor vehicle and any repair and replacement parts and tangible personal property becoming a part of such motor vehicle sold to a motor carrier that is subject to a fee prescribed in title 28, chapter 16, article 4 and that is engaged in the business of leasing or renting such property.

42. Sales of:

(a) Livestock and poultry to persons engaging in the businesses of farming, ranching or producing livestock or poultry.

(b) Livestock and poultry feed, salts, vitamins and other additives for livestock or poultry consumption that are sold to persons for use or consumption by their own livestock or poultry, for use or consumption in the businesses of farming, ranching and producing or feeding livestock, poultry, or livestock or poultry products or for use or consumption in noncommercial boarding of livestock. For the purposes of this paragraph, "poultry" includes ratites.

43. Sales of implants used as growth promotants and injectable medicines, not already exempt under paragraph 8 of this subsection, for livestock or poultry owned by or in possession of persons that are engaged in producing livestock, poultry, or livestock or poultry products or that are engaged in feeding livestock or poultry commercially. For the purposes of this paragraph, "poultry" includes ratites.

44. Sales of motor vehicles at auction to nonresidents of this state for use outside this state if the vehicles are shipped or delivered out of this state, regardless of where title to the motor vehicles passes or its free on board point.

45. Tangible personal property sold to a person engaged in business and subject to tax under the transient lodging classification if the tangible personal property is a personal hygiene item or articles used by human beings for food, drink or condiment, except alcoholic beverages, that are furnished without additional charge to and intended to be consumed by the transient during the transient's occupancy.

46. Sales of alternative fuel, as defined in section 1-215, to a used oil fuel burner who has received a permit to burn used oil or used oil fuel under section 49-426 or 49-480.

47. 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:

(a) Printed or photographic materials, beginning August 7, 1985.

(b) Electronic or digital media materials, beginning July 17, 1994.

48. Tangible personal property sold to a commercial airline and consisting of food, beverages and condiments and accessories used for serving the food and beverages, if those items are to be provided without additional charge to passengers for consumption in flight. For the purposes of this paragraph, "commercial airline" means a person holding a federal certificate of public convenience and necessity or foreign air carrier permit for air transportation to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

49. Sales of alternative fuel vehicles if the 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 section 1-215.

50. Sales of any spirituous, vinous or malt liquor by a person that is licensed in this state as a wholesaler by the department of liquor licenses and control pursuant to title 4, chapter 2, article 1.

51. Sales of tangible personal property to be incorporated or installed as part of environmental response or remediation activities under section 42-5075, subsection B, paragraph 6.

52. Sales of tangible personal property by a nonprofit organization that is exempt from taxation under section 501(c)(6) of the internal revenue code if the organization produces, organizes or promotes cultural or civic related festivals or events and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

53. Application services that are designed to assess or test student learning or to promote curriculum design or enhancement purchased by or for any school district, charter school, community college or state university. For the purposes of this paragraph:

(a) "Application services" means software applications provided remotely using hypertext transfer protocol or another network protocol.

(b) "Curriculum design or enhancement" means planning, implementing or reporting on courses of study, lessons, assignments or other learning activities.

54. Sales of motor vehicle fuel and use fuel to a qualified business under section 41-1516 for off-road use in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41-1516.

55. Sales of repair parts installed in equipment used directly by a qualified business under section 41-1516 in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41-1516.

56. Sales or other transfers of renewable energy credits or any other unit created to track energy derived from renewable energy resources. For the purposes of this paragraph, "renewable energy credit" means a unit created administratively by the corporation commission or governing body of a public power utility to track kilowatt hours of electricity derived from a renewable energy resource or the kilowatt hour equivalent of conventional energy resources displaced by distributed renewable energy resources.

57. Orthodontic devices dispensed by a dental professional who is licensed under title 32, chapter 11 to a patient as part of the practice of dentistry.

58. Sales of tangible personal property incorporated or fabricated into a project described in section 42-5075, subsection P, that is located within the exterior boundaries of an Indian reservation for which the owner, as defined in section 42-5075, of the project is an Indian tribe or an affiliated Indian. For the purposes of this paragraph:

(a) "Affiliated Indian" means an individual Native American Indian who is duly registered on the tribal rolls of the Indian tribe for whose benefit the Indian reservation was established.

(b) "Indian reservation" means all lands that are within the limits of areas set aside by the United States for the exclusive use and occupancy of an Indian tribe by treaty, law or executive order and that are recognized as Indian reservations by the United States department of the interior.

(c) "Indian tribe" means any organized nation, tribe, band or community that is recognized as an Indian tribe by the United States department of the interior and includes any entity formed under the laws of the Indian tribe.

59. Sales of works of fine art, as defined in section 44-1771, at an art auction or gallery in this state to nonresidents of this state for use outside this state if the vendor ships or delivers the work of fine art to a destination outside this state.

60. Sales of tangible personal property by a marketplace seller that are facilitated by a marketplace facilitator in which the marketplace facilitator has remitted or will remit the applicable tax to the department pursuant to section 42-5014.

B. In addition to the deductions from the tax base prescribed by subsection A of this section, the gross proceeds of sales or gross income derived from sales of the following categories of tangible personal property shall be deducted from the tax base:

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, including a person representing or working on behalf of such a person in a manner described in section 42-5075, subsection P, and 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 that are components of carrier systems.

4. Machinery, equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution. Transformers and control equipment used at transmission substation sites constitute equipment used in producing or transmitting electrical power.

5. Machinery and equipment used directly for energy storage for later electrical use. For the purposes of this paragraph:

(a) "Electric utility scale" means a person that is engaged in a business activity described in section 42-5063, subsection A or such person's equipment or wholesale electricity suppliers.

(b) "Energy storage" means commercially available technology for electric utility scale that is capable of absorbing energy, storing energy for a period of time and thereafter dispatching the energy and that uses mechanical, chemical or thermal processes to store energy.

(c) "Machinery and equipment used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released.

6. Neat animals, horses, asses, sheep, ratites, swine or goats used or to be used as breeding or production stock, including sales of breedings or ownership shares in such animals used for breeding or production.

7. Pipes or valves four inches in diameter or larger used to transport oil, natural gas, artificial gas, water, wastewater or coal slurry, including compressor units, regulators, machinery and equipment, fittings, seals and any other part that is used in operating the pipes or valves.

8. Aircraft, navigational and communication instruments and other accessories and related equipment sold to:

(a) A person:

(i) Holding, or exempted by federal law from obtaining, a federal certificate of public convenience and necessity for use as, in conjunction with or becoming part of an aircraft to be used to transport persons for hire in intrastate, interstate or foreign commerce.

(ii) That is certificated or licensed under federal aviation administration regulations (14 Code of Federal Regulations part 121 or 135) as a scheduled or unscheduled carrier of persons for hire for use as or in conjunction with or becoming part of an aircraft to be used to transport persons for hire in intrastate, interstate or foreign commerce.

(iii) Holding a 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.

(iv) Operating an aircraft to transport persons in any manner for compensation or hire, or for use in a fractional ownership program that meets the requirements of federal aviation administration regulations (14 Code of Federal Regulations part 91, subpart K), including as an air carrier, a foreign air carrier or a commercial operator or under a restricted category, within the meaning of 14 Code of Federal Regulations, regardless of whether the operation or aircraft is regulated or certified under part 91, 119, 121, 133, 135, 136 or 137, or another part of 14 Code of Federal Regulations.

(v) That will lease or otherwise transfer operational control, within the meaning of federal aviation administration operations specification A008, or its successor, of the aircraft, instruments or accessories to one or more persons described in item (i), (ii), (iii) or (iv) of this subdivision, subject to section 42-5009, subsection Q.

(b) Any foreign government.

(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.

9. 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.

10. Railroad rolling stock, rails, ties and signal control equipment used directly to transport persons or property.

11. 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.

12. Buses or other urban mass transit vehicles that are used directly to transport persons or property for hire or pursuant to a governmentally adopted and controlled urban mass transportation program and that are sold to bus companies holding a federal certificate of convenience and necessity or operated by any city, town or other 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.

13. Groundwater measuring devices required under section 45-604.

14. Machinery and equipment consisting of agricultural aircraft, tractors, off-highway vehicles, tractor-drawn implements, self-powered implements, machinery and equipment necessary for extracting milk, and machinery and equipment necessary for cooling milk and livestock, and drip irrigation lines not already exempt under paragraph 7 of this subsection and that are used for commercial production of agricultural, horticultural, viticultural and floricultural crops and products in this state. For the purposes of this paragraph:

(a) "Off-highway vehicles" means off-highway vehicles as defined in section 28-1171 that are modified at the time of sale to function as a tractor or to tow tractor-drawn implements and that are not equipped with a modified exhaust system to increase horsepower or speed or an engine that is more than one thousand cubic centimeters or that have a maximum speed of fifty miles per hour or less.

(b) "Self-powered implements" includes machinery and equipment that are electric-powered.

15. Machinery or equipment used in research and development. For the purposes of 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.

16. 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 part 25.

(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 part 25.

(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 the 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.

17. Clean rooms that are used for manufacturing, processing, fabrication or research and development, as defined in paragraph 15 of this subsection, of semiconductor products. For the purposes of this paragraph, "clean room" 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. Clean room:

(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 clean room environment.

(b) Does not include the building or other permanent, nonremovable component of the building that houses the clean room environment.

18. Machinery and equipment used directly in feeding poultry, environmentally controlling housing for poultry, moving eggs within a production and packaging facility or sorting or cooling eggs. This exemption does not apply to vehicles used for transporting eggs.

19. Machinery or equipment, including related structural components and containment structures, 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 and 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. For the purposes of this paragraph, "containment structure" means a structure that prevents, monitors, controls or reduces noxious or harmful discharge into the environment.

20. Machinery and equipment that are sold to a person engaged in commercially producing livestock, livestock products or agricultural, horticultural, viticultural or floricultural crops or products in this state, including a person representing or working on behalf of such a person in a manner described in section 42-5075, subsection P, if the machinery and equipment are used directly and primarily to prevent, monitor, control or reduce air, water or land 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.

22. Qualifying equipment that is purchased from and after June 30, 2004 through December 31, 2028 by a qualified business under section 41-1516 for harvesting or processing qualifying forest products removed from qualifying projects as defined in section 41-1516. To qualify for this deduction, the qualified business at the time of purchase must present its certification approved by the department.

23. Computer data center equipment sold to the owner, operator or qualified colocation tenant of a computer data center that is certified by the Arizona commerce authority under section 41-1519 or an authorized agent of the owner, operator or qualified colocation tenant during the qualification period for use in the qualified computer data center. For the purposes of this paragraph, "computer data center", "computer data center equipment", "qualification period" and "qualified colocation tenant" have the same meanings prescribed in section 41-1519.

C. The deductions provided by subsection B of this section do not include sales of:

1. Expendable materials. For the purposes of this paragraph, expendable materials do not include any of the categories of tangible personal property specified in subsection B 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, other than the telecommunications transmissions described in subsection B, paragraph 16 of this section.

5. Motor vehicles required to be licensed by this state, except buses or other urban mass transit vehicles specifically exempted pursuant to subsection B, paragraph 12 of this section, 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.

8. Machinery and equipment or other tangible personal property used by a contractor in performing a contract.

D. In addition to the deductions from the tax base prescribed by subsection A of this section, there shall be deducted from the tax base the gross proceeds of sales or gross income derived from sales of machinery, equipment, materials and other tangible personal property used directly and predominantly to construct a qualified environmental technology manufacturing, producing or processing facility as described in section 41-1514.02. This subsection applies for ten full consecutive calendar or fiscal years after the start of initial construction.

E. In computing the tax base, gross proceeds of sales or gross income from retail sales of heavy trucks and trailers does not include any amount attributable to federal excise taxes imposed by 26 United States Code section 4051.

F. If a person is engaged in an occupation or business to which subsection A of this section applies, the person's books shall be kept so as to show separately the gross proceeds of sales of tangible personal property and the gross income from sales of services, and if not so kept the tax shall be imposed on the total of the person's gross proceeds of sales of tangible personal property and gross income from services.

G. If a person is engaged in the business of selling tangible personal property at both wholesale and retail, the tax under this section applies only to the gross proceeds of the sales made other than at wholesale if the person's books are kept so as to show separately the gross proceeds of sales of each class, and if the books are not so kept, the tax under this section applies to the gross proceeds of every sale so made.

H. A person who engages in manufacturing, baling, crating, boxing, barreling, canning, bottling, sacking, preserving, processing or otherwise preparing for sale or commercial use any livestock, agricultural or horticultural product or any other product, article, substance or commodity and who sells the product of such business at retail in this state is deemed, as to such sales, to be engaged in business classified under the retail classification. This subsection does not apply to:

1. Agricultural producers who are owners, proprietors or tenants of agricultural lands, orchards, farms or gardens where agricultural products are grown, raised or prepared for market and who are marketing their own agricultural products.

2. Businesses classified under the:

(a) Transporting classification.

(b) Utilities classification.

(c) Telecommunications classification.

(d) Pipeline classification.

(e) Private car line classification.

(f) Publication classification.

(g) Job printing classification.

(h) Prime contracting classification.

(i) Restaurant classification.

I. The gross proceeds of sales or gross income derived from the following shall be deducted from the tax base for the retail classification:

1. Sales made directly to the United States government or its departments or agencies by a manufacturer, modifier, assembler or repairer.

2. Sales made directly to a manufacturer, modifier, assembler or repairer if such sales are of any ingredient or component part of products sold directly to the United States government or its departments or agencies by the manufacturer, modifier, assembler or repairer.

3. Overhead materials or other tangible personal property that is used in performing a contract between the United States government and a manufacturer, modifier, assembler or repairer, including property used in performing a subcontract with a government contractor who is a manufacturer, modifier, assembler or repairer, to which title passes to the government under the terms of the contract or subcontract.

4. Sales of overhead materials or other tangible personal property to a manufacturer, modifier, assembler or repairer if the gross proceeds of sales or gross income derived from the property by the manufacturer, modifier, assembler or repairer will be exempt under paragraph 3 of this subsection.

J. There shall be deducted from the tax base fifty percent of the gross proceeds or gross income from any sale of tangible personal property made directly to the United States government or its departments or agencies that is not deducted under subsection I of this section.

K. The department shall require every person claiming a deduction provided by subsection I or J of this section to file on forms prescribed by the department at such times as the department directs a sworn statement disclosing the name of the purchaser and the exact amount of sales on which the exclusion or deduction is claimed.

L. In computing the tax base, gross proceeds of sales or gross income does not include:

1. A manufacturer's cash rebate on the sales price of a motor vehicle if the buyer assigns the buyer's right in the rebate to the retailer.

2. The waste tire disposal fee imposed pursuant to section 44-1302.

M. There shall be deducted from the tax base the amount received from sales of solar energy devices. The retailer shall register with the department as a solar energy retailer. By registering, the retailer acknowledges that it will make its books and records relating to sales of solar energy devices available to the department for examination.

N. In computing the tax base in the case of the sale or transfer of wireless telecommunications equipment as an inducement to a customer to enter into or continue a contract for telecommunications services that are taxable under section 42-5064, 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.

O. For the purposes of this section, a sale of wireless telecommunications 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 telecommunications services that are taxable under section 42-5064 is considered to be a sale for resale in the regular course of business.

P. 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.

Q. For the purposes of this section, the diversion of gas from a pipeline by a person engaged in the business of:

1. 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.

2. Converting natural gas into liquefied natural gas, for the sole purpose of fueling compressor equipment used in the conversion process, is not a sale of gas to the operator of the compressor equipment.

R. For the purposes of this section, the transfer of title or possession of coal from an owner or operator of a power plant to a person in the business of refining coal is not a sale of coal if both of the following apply:

1. The transfer of title or possession of the coal is for the purpose of refining the coal.

2. The title or possession of the coal is transferred back to the owner or operator of the power plant after completion of the coal refining process. For the purposes of this paragraph, "coal refining process" means the application of a coal additive system that aids in the reduction of power plant emissions during the combustion of coal and the treatment of flue gas.

S. If a seller is entitled to a deduction pursuant to subsection B, paragraph 16, subdivision (b) of this section, the department may require the purchaser to establish that the requirements of subsection B, paragraph 16, subdivision (b) of this section have been satisfied. If the purchaser cannot establish that the requirements of subsection B, paragraph 16, subdivision (b) of this section have been satisfied, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under article 1 of this chapter if the seller had not made a deduction pursuant to subsection B, paragraph 16, subdivision (b) of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and related to the tangible personal property purchased. The amount shall be treated as transaction privilege tax to the purchaser and as tax revenues collected from the seller to designate the distribution base pursuant to section 42-5029.

T. For the purposes of section 42-5032.01, the department shall separately account for revenues collected under the retail classification from businesses selling tangible personal property at retail:

1. On the premises of a multipurpose facility that is owned, leased or operated by the tourism and sports authority pursuant to title 5, chapter 8.

2. At professional football contests that are held in a stadium located on the campus of an institution under the jurisdiction of the Arizona board of regents.

U. For the purposes of section 42-5032.03 and subject to section 48-4238, beginning October 1, 2025 and each month thereafter through December 31, 2055, the department shall separately account for revenues collected under the retail classification from each business selling tangible personal property at retail on the premises of a major league baseball facility or an adjacent building that is owned by a county stadium district pursuant to title 48, chapter 26 and operated by the county stadium district or the professional baseball franchise organization that occupies the major league baseball facility or adjacent building. For the purposes of this subsection, "adjacent building" and "major league baseball facility" have the same meanings prescribed in section 48-4201.

V. In computing the tax base for the sale of a motor vehicle to a nonresident of this state, if the purchaser's state of residence allows a corresponding use tax exemption to the tax imposed by article 1 of this chapter and the rate of the tax in the purchaser's state of residence is lower than the rate prescribed in article 1 of this chapter or if the purchaser's state of residence does not impose an excise tax, and the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01, there shall be deducted from the tax base a portion of the gross proceeds or gross income from the sale so that the amount of transaction privilege tax that is paid in this state is equal to the excise tax that is imposed by the purchaser's state of residence on the nonexempt sale or use of the motor vehicle.

W. For the purposes of this section:

1. "Agricultural aircraft" means an aircraft that is built for agricultural use for the aerial application of pesticides or fertilizer or for aerial seeding.

2. "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.

3. "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.

4. "Selling at retail" means a sale for any purpose other than for resale in the regular course of business in the form of tangible personal property, but transfer of possession, lease and rental as used in the definition of sale mean only such transactions as are found on investigation to be in lieu of sales as defined without the words lease or rental.

X. For the purposes of subsection I of this section:

1. "Assembler" means a person who unites or combines products, wares or articles of manufacture so as to produce a change in form or substance without changing or altering the component parts.

2. "Manufacturer" means a person who is principally engaged in fabricating, producing or manufacturing products, wares or articles for use from raw or prepared materials, imparting to those materials new forms, qualities, properties and combinations.

3. "Modifier" means a person who reworks, changes or adds to products, wares or articles of manufacture.

4. "Overhead materials" means tangible personal property, the gross proceeds of sales or gross income derived from that would otherwise be included in the retail classification, and that are used or consumed in performing a contract, the cost of which is charged to an overhead expense account and allocated to various contracts based on generally accepted accounting principles and consistent with government contract accounting standards.

5. "Repairer" means a person who restores or renews products, wares or articles of manufacture.

6. "Subcontract" means an agreement between a contractor and any person who is not an employee of the contractor for furnishing supplies or services that, in whole or in part, are necessary to perform one or more government contracts, or under which any portion of the contractor's obligation under one or more government contracts is performed, undertaken or assumed and that includes provisions causing title to overhead materials or other tangible personal property used in performing the subcontract to pass to the government or that includes provisions incorporating such title passing clauses in a government contract into the subcontract.
A.R.S. § 42-17254 — Arizona Code / Title 42 / Chapter 17 / Article 6 / Section 17254
42-17254 Assessment and collection of municipal taxes
Status: in_force

42-17254. Assessment and collection of municipal taxes

A. On or before the third Monday in August each year the county board of supervisors shall:

1. Assess the amount of taxes that is certified as having been levied for city and town purposes.

2. Designate the amount to be levied for such purposes on each one hundred dollars of assessed valuation.

B. The county treasurer shall collect the city and town taxes at the same time and in the same manner provided for collecting county taxes.

C. The resolution by the county board of supervisors authorizing the collection of taxes shall include city and town taxes and shall provide the treasurer with the same powers respecting the collection of city and town taxes and the return and sale of property for delinquent city and town taxes as are conferred with respect to state and county taxes.
A.R.S. § 42-2080 — Arizona Code / Title 42 / Chapter 2 / Article 2 / Section 2080
42-2080 Rulings, procedures, notices and other administrative announcements; notice; public comment; records; confidentiality; exceptions
Status: in_force

42-2080. Rulings, procedures, notices and other administrative announcements; notice; public comment; records; confidentiality; exceptions

A. The department may issue draft rulings, procedures, notices and administrative announcements that apply to tax laws and regulations, either generally or for a specific set of facts, and that otherwise do not change the substance and meaning of a statute or rule.  Except for private taxpayer rulings issued pursuant to section 42-2101, the department shall allow for and accept written public comments on the draft ruling, procedure, notice or administrative announcement as prescribed by this section. A ruling, procedure, notice or administrative announcement becomes final and effective thirty days after the ruling, procedure, notice or administrative announcement is issued for public comment and review unless the department withdraws the ruling, procedure, notice or administrative announcement.  The department may amend the draft ruling, procedure, notice or administrative announcement in response to public comments received during the thirty-day period.

B. The department shall establish and maintain on its website a publicly accessible record of all draft and final rulings, procedures, notices and administrative announcements and shall prominently announce additions, modifications and other changes to this record on the department website's home page.

C. A draft ruling, procedure, notice or administrative announcement that applies to tax laws and regulations is not considered final and effective unless the ruling, procedure, notice or administrative announcement contains all of the following:

1. The subject matter of the draft ruling, procedure, notice or administrative announcement.

2. A citation to all statutes, rules and published administrative rulings relating to the draft ruling, procedure, notice or administrative announcement.

3. The name and contact information of department personnel with whom persons may communicate regarding the draft ruling, procedure, notice or administrative announcement.

4. The date on which the draft ruling, procedure, notice or administrative announcement was proposed.

5. The date on which the draft ruling, procedure, notice or administrative announcement will become final and effective.

6. A statement of whether public comments on the draft ruling, procedure, notice or administrative announcement were received and where the written comments and the department's response to those comments are available for inspection.

7. The signature of the director.

D. Before a draft ruling, procedure, notice or administrative announcement is effective and final pursuant to subsection A of this section, the department shall consider any public comments received on the draft ruling, procedure, notice or administrative announcement. If the department chooses not to incorporate a public comment into the final ruling, procedure, notice or administrative announcement, the department shall respond to the comment explaining the basis for the department's decision and preserve that response as a public record.

E. The director shall ensure that any public records required by this section comply with the confidentiality requirements prescribed by article 1 of this chapter.

F. This section does not apply to department actions that are subject to title 41, chapters 6 and 6.1, private taxpayer rulings issued pursuant to section 42-2101, tax forms and instructions, routine notices that remind taxpayers of normal filing obligations and other routine department communications that do not substantively apply to and interpret tax laws and regulations.

G. The court shall decide all questions of law without deference to any determination that is made by the department. Notwithstanding section 41-1092, paragraph 3, any final agency action taken pursuant to this section is an appealable agency action under title 41, chapter 6, article 10 that may be appealed within thirty days after the effective date of the ruling, procedure, notice or administrative announcement.
A.R.S. § 42-3005 — Arizona Code / Title 42 / Chapter 3 / Article 1 / Section 3005
42-3005 Agents and other employees; bond; credentials; removal
Status: in_force

42-3005. Agents and other employees; bond; credentials; removal

A. The department shall appoint, as necessary, such agents, clerks and stenographers authorized by law who:

1. Shall perform duties as may be required not inconsistent with this chapter.

2. May act for the department as it prescribes and as provided by this chapter.

B. Each agent shall execute a bond in the amount of five thousand dollars conditioned upon the faithful discharge of the agent's duties, but the department, in its discretion, may bond all or any of its agents by a multiple or joint bond.

C. The agents, clerks and stenographers may be removed by the department for cause, and the department is the final judge of the sufficiency of the cause.

D. All agents or representatives of the department shall have credentials signed by the director for identification purposes.
A.R.S. § 42-3503 — Arizona Code / Title 42 / Chapter 3 / Article 12 / Section 3503
42-3503 Acquisition and possession of untaxed other tobacco products; definitions
Status: in_force

42-3503. Acquisition and possession of untaxed other tobacco products; definitions

A. A person, other than a manufacturer or an importer shipping into the state, shall be licensed as a distributor if the person acquires or possesses untaxed other tobacco products for sale, barter or exchange or for any other purpose besides or in addition to personal use or consumption in this state, including Indian reservations located in this state.

B. A distributor shall obtain other tobacco products only from a manufacturer or an importer, or a distributor with a current license issued under section 42-3401.

C. For the purposes of this section:

1. "Importer" means a person who has received approval from the federal alcohol and tobacco tax and trade bureau to directly or indirectly import finished tobacco products into the United States for sale or distribution, pursuant to 26 United States Code section 5712 and 27 Code of Federal Regulations part 41.

2. "Manufacturer" means a person who has received approval from the federal alcohol and tobacco tax and trade bureau to manufacture, fabricate, assemble, process or label finished tobacco products, pursuant to 26 United States Code section 5712 and 27 Code of Federal Regulations part 40.
A.R.S. § 42-15103 — Arizona Code / Title 42 / Chapter 15 / Article 3 / Section 15103
42-15103 Contents of notice form
Status: in_force

42-15103. Contents of notice form

The notice form shall:

1. Prominently display a statement for all residential properties that:

(a) Defines class three properties as described in section 42-12003.

(b) Informs property owners that if the property listed on the notice does not meet the description provided pursuant to subdivision (a) of this paragraph, the owner must notify the county assessor of the usage of the property or the owner may be subject to a civil penalty prescribed by section 42-12052.

2. Include simplified instructions on the procedure and deadlines for appealing the assessed valuation shown on the notice.

3. Prominently display a statement informing owners of property that is used for residential rental purposes that:

(a) The parcel must be listed on the notice as class four, and the owner must register the residential rental property with the county assessor pursuant to section 33-1902 or the owner may be subject to a penalty.

(b) If the owner is required to register the rental property with the county assessor and fails to do so after receipt of this notice, the city or town may impose a civil penalty payable to the city or town in the amount of $150 per day for each day of violation, and the city or town may impose enhanced inspection and enforcement measures on the property.

(c) Residential rental properties are required to comply with the landlord tenant law pursuant to title 33, chapters 10 and 11.
A.R.S. § 42-6108.01 — Arizona Code / Title 42 / Chapter 6 / Article 3 / Section 6108.01
42-6108.01 Tax on hotels
Status: in_force

42-6108.01. Tax on hotels

A. The qualified electors residing in a county having a population of less than two million but more than five hundred thousand persons, by majority vote at an election held in the county, may levy and, if levied, the department of revenue shall collect a tax on the gross proceeds of sales or gross income from the business of every person engaging or continuing in a business taxed under chapter 5 of this title and classified under section 42-5070 or 42-5076 within the county.  A tax under this section:

1. Is in addition to taxes imposed by chapter 5 of this title and section 42-6108 and any tax imposed by a city or town in the county.

2. Applies in both incorporated and unincorporated areas of the county.

B. If levied, the tax shall be levied under this section beginning on the first day of the first month beginning ninety days after the election to levy the tax.  The tax shall be in effect for thirty years.  The tax may be extended by majority vote of the qualified electors residing in the county at an election held in the county for a period of not more than ten years.

C. The rate of the tax is one per cent of the tax base prescribed by section 42-5070 or 42-5076.

D. Each month the state treasurer shall credit the net revenues collected pursuant to this section to the tourism fund established by section 41-2306.
A.R.S. § 42-6016 — Arizona Code / Title 42 / Chapter 6 / Article 1 / Section 6016
42-6016 Mobile food vendors; definitions
Status: in_force

42-6016. Mobile food vendors; definitions

A. A city, town or other taxing jurisdiction may levy a transaction privilege, sales, use, franchise or other similar tax or fee as provided by the model city tax code on a person engaging in business as a mobile food vendor subject to the restaurant classification pursuant to section 42-5074 for sales of food or beverages for immediate service and consumption and the retail classification pursuant to section 42-5061 for sales of incidental retail items if the adopted tax:

1. Applies only with respect to transactions that occur within the jurisdictional boundaries of the city, town or taxing jurisdiction.

2. Is administered in a manner that is consistent with the treatment of restaurants or similar establishments where food or beverages are prepared and served for consumption on or off the premises.

3. Is administered, collected and enforced by the department and remitted to the city, town or other taxing jurisdiction in a uniform manner.

B. The taxpayer shall maintain records that show separately the taxable receipts from transactions in the respective cities, towns or other taxing jurisdictions in which the taxpayer conducts business. If the taxpayer fails to comply with this subsection, the department shall collect the tax based on the taxpayer's total receipts, applying the highest tax rate levied by any city, town or other taxing jurisdiction.

C. For the purposes of this section:

1. "Mobile food unit" means a food establishment that is licensed by this state, that is readily movable and that dispenses food or beverages for immediate service and consumption and other incidental retail items from any vehicle as defined in section 28-101.

2. "Mobile food vendor" means any person who owns, controls, manages or leases a mobile food unit or contracts with a person to prepare foods and vend from, drive or operate a mobile food unit.
A.R.S. § 42-1009 — Arizona Code / Title 42 / Chapter 1 / Article 1 / Section 1009
42-1009 Department of revenue tax system modernization project advisory committee; membership
Status: in_force

42-1009. Department of revenue tax system modernization project advisory committee; membership

(Rpld. 1/1/30)

The department of revenue tax system modernization project advisory committee is established and shall serve as the liaison between the department and the users of the tax system. The committee shall consist of the following members:

1. The director of the department of revenue or the director's designee who shall serve as the chairperson of the committee.

2. The director of the department of administration or the director's designee.

3. The auditor general or the auditor general's designee as a nonvoting member.

4. The director of the joint legislative budget committee or the director's designee as a nonvoting member.

5. The director of the governor's office of strategic planning and budgeting or the director's designee.

6. One member who represents a city or town in this state. The director of the department of revenue shall appoint this member.

7. One member who represents a county in this state. The director of the department of revenue shall appoint this member.

8. One member who represents the business community in this state. The director of the department of revenue shall appoint this member.

9. One member who is appointed by the president of the senate.

10. One member who is appointed by the speaker of the house of representatives.
A.R.S. § 42-17257 — Arizona Code / Title 42 / Chapter 17 / Article 6 / Section 17257
42-17257 Notice of establishment or change in city, town or taxing district boundaries
Status: in_force

42-17257. Notice of establishment or change in city, town or taxing district boundaries

A. On or before November 1 of the year preceding the year in which assessments or taxes are to be levied, the governing body of each city, town, school district and community college district and other special taxing districts and assessment districts that are organized by law or in the process of organizing by law shall file with the department and the county assessor information prescribed by the director of the department relating to changes in boundaries and the boundaries of newly created taxing jurisdictions.

B. At the request of the governing body of any taxing jurisdiction, on or before November 30 of the year preceding the year in which assessments or taxes are to be levied, the director may extend the deadline prescribed by subsection A of this section to allow the taxing jurisdiction to file the required information. The director may not extend this deadline beyond December 20 of the year preceding the year in which assessments or taxes are to be levied.

C. A change in boundaries of an existing taxing jurisdiction or the establishment of a new taxing jurisdiction is not effective for assessment and tax levying purposes for the tax year unless notice has been given as prescribed by this section. If the change in boundaries of an existing taxing district or if the establishment of a new taxing jurisdiction for the following fiscal year is not complete by December 20, a preliminary filing, which shall include all information prescribed by law, may be submitted pursuant to this section.  After the governing board of the new taxing jurisdiction is authorized to act, but not later than May 15, the appropriate governing body or bodies shall notify the department and the county assessor of the formation effective for the following fiscal year.
A.R.S. § 42-11001 — Arizona Code / Title 42 / Chapter 11 / Article 1 / Section 11001
42-11001 Definitions
Status: in_force

42-11001. Definitions

In chapters 11 through 19 of this title, unless the context otherwise requires:

1. "Assessed valuation" means the value derived by applying the applicable percentage prescribed by chapter 15, article 1 of this title to the full cash value or limited property value of the property, as applicable.

2. "Board" or "state board" means the state board of equalization.

3. "County board" means the county board of supervisors sitting as the county board of equalization.

4. "Current usage" means the use to which property is put at the time of valuation by the assessor or the department.

5. "Due date" means the next business day if a due date of any report, claim, return, statement, payment, deposit, petition, notice or other document or filing falls on Saturday, Sunday or a legal holiday.

6. "Full cash value", for property tax purposes, means the value determined as prescribed by statute. If a statutory method is not prescribed, full cash value is synonymous with market value, which means the estimate of value that is derived annually by using standard appraisal methods and techniques. Full cash value is the basis for assessing, fixing, determining and levying primary and secondary property taxes on property described in section 42-13304.  Full cash value shall not be greater than market value regardless of the method prescribed to determine value for property tax purposes.

7. "Limited property value" means the value determined pursuant to section 42-13301. Limited property value is the basis for:

(a) Computing levy limitations for counties, cities, towns and community college districts.

(b) Assessing, fixing, determining and levying primary and secondary property taxes on all property except property described in section 42-13304.

8. "Net assessed value" means the assessed value minus any exempt property.

9. "Person" means a natural person, individual, proprietor, proprietorship, company, corporation, organization, association, joint venture, partner, partnership, trust, estate or limited liability company, the federal or state government, a political subdivision of a state or any other legal entity or combination of entities that owns, controls or has possession of real or personal property.

10. "Personal property" includes property of every kind, both tangible and intangible, that is not included as real estate.

11. "Primary property taxes" means all ad valorem taxes except for secondary property taxes.

12. "Producing mine" or "mining claim" means a mine or mining claim from which coal or any other mineral or mineral substance, except for clay, sand, gravel, building stone or a mineral or mineral substance that is normally processed into artificial stone, has been extracted for commercial purposes at any time during a period of one year before the first Monday in January of the valuation year.

13. "Real estate" includes the ownership of, claim to, possession of or right of possession to lands or patented mines.

14. "Residential treatment and education facility" means any residential facility that is subject to title 15, chapter 10, article 6.

15. "Roll" means the assessment and tax roll.

16. "Secondary property taxes" means:

(a) Ad valorem taxes or special property assessments that are used to pay the principal of and the interest and redemption charges on bonded indebtedness or other lawful long-term obligations that are issued or incurred for a specific capital purpose by a municipality, county or taxing district.

(b) Ad valorem taxes or assessments that are levied by or for special taxing districts and assessment districts other than school districts and community college districts.

(c) Amounts that are levied pursuant to an election to exceed a budget, expenditure or tax limitation.

17. "Tax year" for all property means the calendar year in which the taxes are levied.

18. "Valuation" means the full cash value or limited property value that is determined for real or personal property, as applicable.

19. "Valuation date", for the purposes of real property and property valued by the department, means January 1 of the year preceding the year in which taxes are levied.

20. "Valuation year" means:

(a) For real property and property valued by the department, the calendar year preceding the year in which the taxes are levied.

(b) For personal property, the calendar year in which the taxes are levied.
A.R.S. § 42-18232 — Arizona Code / Title 42 / Chapter 18 / Article 6 / Section 18232
42-18232 Notice of sale
Status: in_force

42-18232. Notice of sale

A. The qualified entity conducting the sale of the property shall provide notice of the time and place of the sale, a description of the property to be sold and the amount of the opening bid by each of the following methods:

1. Recording a notice in the office of the recorder of each county where the property is situated.

2. If the property is reasonably accessible, posting a copy of the notice of sale in a conspicuous place on the property to be sold at least twenty days before the sale. If access to the property is denied because a common entrance to the property is restricted by a limited access gate or similar impediment, the notice shall be posted at that gate or impediment.

3. Posting at one of the places provided for posting public notices at any building that serves as a location of the superior court in the county where the property is to be sold.

4. Publishing the notice of sale in a newspaper of general circulation in the county in which the property to be sold is situated. The notice of sale shall be published at least once a week for four consecutive weeks. The last date of publication may not be less than ten days before the date of sale. The newspaper that publishes the notice shall also post the notice on a website that posts the legal notices of ten or more Arizona newspapers.

5. Sending the notice to the property owners notified pursuant to section 42-18202.

B. The notice of sale shall contain:

1. The date, time and place of the sale. The date, time and place shall be set pursuant to section 42-18233. The date may not be later than the sixtieth day after the date that the notice of sale was recorded.

2. The street address, if any, or identifiable location as well as the legal description of the property.

3. The county assessor's tax parcel number for the property.

4. The amount of the opening bid. The opening bid shall be set pursuant to section 42-18204.

5. The telephone number of the qualified entity conducting the sale.

C. The notice of sale is sufficient if made in substantially the following form:

Notice of Sale for Excess Proceeds

There are unpaid taxes on the property located at (address) that you may own or have a legal interest in or that may be contiguous to your property. The property will be sold at public auction at (specific place of sale) on (date and time) and that sale will be final unless the outstanding taxes are paid. The opening bid at the public auction is (opening bid amount).

To make payment or to receive further information, contact the (county) county treasurer immediately at (address) or (telephone number) or the (qualified entity) at (address) or (telephone number).

___________(date)___________

______(acknowledgment)______

Legal description of property to be sold:

(street address, if any, or identifiable

location of property)

(legal description of property)

(tax parcel number)

D. Any error or omission in the information required by subsection B or C of this section, other than an error in the legal description of the property or an error in the date, time or place of sale, does not invalidate the sale. Any error in the legal description of the property does not invalidate the sale if, considered as a whole, the information provided is sufficient to identify the property being sold. If there is an error or omission in the legal description so that the property cannot be identified, or if there is an error in the date, time or place of sale, the qualified entity shall record a cancellation of notice of sale. The qualified entity or any person furnishing information to the qualified entity is not subject to liability for any error or omission in the information required by subsection B or C of this section except for the wilful and intentional failure to provide such information.

E. The notice of sale for excess proceeds may not be rerecorded for any reason. This subsection does not prohibit the recording of a new or subsequent notice of sale regarding the same property.
A.R.S. § 42-13604 — Arizona Code / Title 42 / Chapter 13 / Article 13 / Section 13604
42-13604 Required documentation
Status: in_force

42-13604. Required documentation

A. As a condition of valuation under this article, an owner or operator of low-income multifamily residential rental property must provide written documentation to the county assessor confirming that the property has been placed in service as a low-income multifamily residential rental property consistent with section 42 of the internal revenue code.

B. Internal revenue service form 8609 or an equivalent successor form designated by the internal revenue code that is signed by the Arizona department of housing or the certificate of occupancy and the declaration of affirmative land use restrictive covenants agreement recorded on the property satisfy the documentation requirement prescribed by this section.
A.R.S. § 42-14309 — Arizona Code / Title 42 / Chapter 14 / Article 7 / Section 14309
42-14309 Debt; lien
Status: in_force

42-14309. Debt; lien

The tax imposed by this article:

1. Is a debt of the private car company.

2. May be collected by an action instituted and prosecuted by the attorney general on the director's request.

3. Is a lien pursuant to section 42-17154 against the private car property.

4. Is also a lien against all other property of the taxpayer under section 42-1151.
A.R.S. § 42-2067 — Arizona Code / Title 42 / Chapter 2 / Article 2 / Section 2067
42-2067 Limitation on the use of pseudonyms by department employees
Status: in_force

42-2067. Limitation on the use of pseudonyms by department employees

A. Employees of the department shall not use pseudonyms when interacting with the public unless the director or the director's designee first determines on written request that the use of the pseudonym is appropriate. The employee's request must include adequate justification for the use of a pseudonym, such as protection of personal safety.

B. The director shall maintain a list of the persons who are authorized to use pseudonyms.
A.R.S. § 42-16252 — Arizona Code / Title 42 / Chapter 16 / Article 6 / Section 16252
42-16252 Notice of proposed correction; response; petition for review; appeal
Status: in_force

42-16252. Notice of proposed correction; response; petition for review; appeal

A. Subject to the limitations and conditions prescribed by this article, if a tax officer determines that any real or personal property has been assessed improperly as a result of a property tax error, the tax officer shall send the taxpayer a notice of proposed correction at the taxpayer's last known address by:

1. Certified mail, return receipt requested, if correction of the error results in an increase in the full cash value or change in legal classification of the property.

2. First class mail or, at the taxpayer's written request, delivery by common carrier or electronic transmittal, if correction of the error does not result in an increase in the valuation of the property.

B. The notice shall:

1. Be in a form prescribed by the department.

2. Clearly identify the subject property by tax parcel number or tax roll number and the year or years for which the correction is proposed.

3. Explain the error, the reasons for the error and the proposed correction of the error.

4. Inform the taxpayer of the procedure and deadlines for appealing all or part of the proposed determination before the tax roll is corrected.

C. Within thirty days after receiving a notice of proposed correction, the taxpayer may file a written response to the tax officer that sent the notice to either consent to or dispute the proposed correction of the error and to state the grounds for disputing the correction. A failure to file a written response within thirty days constitutes consent to the proposed correction.  A taxpayer may file a request for an extension of time within thirty days after receiving the notice of proposed correction. The extension of time may not exceed thirty days. If an extension is granted, any response that is not filed within the extended due date constitutes consent to the proposed correction.

D. The taxpayer may appeal any valuation or legal classification issue that arises from the proposed correction as provided in this section.

E. If the taxpayer consents to the proposed correction, or consents to the proposed correction but disputes the proposed valuation or legal classification as provided on the form prescribed by the department, the tax roll shall be promptly corrected to allow property taxes to be levied and collected in all subsequent tax years, but no additional tax, interest or penalty may be imposed for the current tax year or any tax year preceding the date of the notice of proposed correction.

F. If the taxpayer disputes the proposed correction or the proposed valuation or legal classification, the tax officer shall meet with the taxpayer or the taxpayer's representative in any case in which the taxpayer has timely filed a written response to discuss the proposed correction. If after the meeting the tax officer and the taxpayer reach an agreement on all or part of the proposed correction, the tax officer and the taxpayer shall each sign an agreement and the tax roll must be promptly corrected to the extent agreed on.

G. If after the meeting the parties fail to agree on all or part of the proposed correction, the tax officer shall serve a notice on the taxpayer by certified mail within thirty days after the meeting date advising the taxpayer that the tax roll will be corrected to the extent agreed on.  The taxpayer may file a petition on a form prescribed by the department with the board of equalization within thirty days after the date of the notice or it is barred. On receiving the petition, the board shall hold a hearing on the disputed issues in the proposed correction within thirty days and shall issue a written decision pursuant to the board's rules.

H. A party that is dissatisfied with the decision of the board may appeal the decision to court within sixty days after the date the board's decision is mailed, but any additional taxes that are determined to be due must be timely paid before delinquency for the court to retain jurisdiction of the matter.
A.R.S. § 42-3401 — Arizona Code / Title 42 / Chapter 3 / Article 10 / Section 3401
42-3401 Tobacco distributor licenses; application; conditions; revocations and cancellations
Status: in_force

42-3401. Tobacco distributor licenses; application; conditions; revocations and cancellations

A. Every person acquiring or possessing for the purpose of making the initial sale or distribution in this state of any tobacco products on which a tax is imposed by this chapter shall obtain from the department a license to sell tobacco products. The application for the license shall be in the form provided by the department and shall be accompanied by a fee of $25 for each place of business listed in the application.  The form shall state that the identity of the applicant will be posted to the department's website for public inspection. The application for a license shall include the applicant's name and address, the applicant's principal place of business, all other places of business where the applicant's business is conducted for the purpose of making the initial sale or distribution of tobacco products in this state, including any location that maintains an inventory of tobacco products, and any other information required by the department. The applicant's principal place of business and other business locations may not include a residential location or post office box address, except as allowed under subsection D, paragraph 2, subdivision (c) of this section. If the applicant is a firm, partnership, limited liability company, limited liability partnership or association, the applicant shall list the name and address of each of the applicant's members.  If the applicant is a corporation, the application shall list the name and address of the applicant's officers and any person who directly or indirectly owns an aggregate amount of ten percent or more of the ownership interest in the corporation. If a licensee is a corporation, firm, partnership, limited liability company, limited liability partnership or association, the licensee under this subsection shall notify the department in writing within thirty days after any change in membership, legal entity status or ownership of more than fifty percent of the total ownership interest in a single transaction. If a licensee changes its business location, the licensee under this subsection shall notify the department within thirty days after a change in location. If the licensee is making a change in its business location by adding or replacing one or more additional places of business that are not currently listed on its application, the licensee must remit a fee of $25 for each additional place of business.

B. For the purposes of subsection A of this section, an applicant with a controlling interest in more than one business engaged in activities as a distributor shall apply for a single license encompassing all such businesses and list each place of business in its application.  For the purposes of this subsection, "controlling interest" means direct or indirect ownership of at least eighty percent of the voting shares of a corporation or of the interests in a company, business or person other than a corporation.

C. The department shall issue a license authorizing the applicant to acquire or possess tobacco products in this state on the condition that the applicant complies with this chapter and the rules of the department.  The license:

1. Shall be nontransferable. A licensee may not transfer its license to a new owner when selling its business, and any court-appointed trustee, receiver or other person shall obtain a license in its own name in cases of liquidation, insolvency or bankruptcy or pursuant to a court order if the business remains in operation as a distributor of tobacco products. In cases of liquidation, insolvency or bankruptcy or pursuant to a court order, the department will not consider a business as remaining in operation under this paragraph if the court-appointed trustee, receiver or other person winds up the business within sixty days after the order is issued.  A licensee shall apply for a new license if it changes its legal entity status or otherwise changes the legal structure of its business.

2. Shall be valid for one year unless earlier canceled or revoked by the department.

3. Shall be displayed in a conspicuous place at the licensee's place of business. If the licensee operates from more than one place of business, the licensee must display a copy of its license in a conspicuous place at each location.

D. As a condition of licensure under this section, an applicant agrees to the following conditions:

1. A person may not hold or store any tobacco products, whether within or outside of this state, for sale or distribution in this state by or on behalf of a distributor at any place other than a location that has been disclosed to the department pursuant to subsection A of this section.  This paragraph does not include a person holding or storing tobacco products by or on behalf of the distributor when the tobacco products are in transit to a distributor or retailer as part of a lawful sale.

2. All tobacco products held or stored, whether within or outside of this state, for sale or distribution in this state by or on behalf of a distributor:

(a) Shall be accessible to the department during normal business hours without a judicial warrant or prior written consent of the distributor.

(b) May not be held or stored in a vehicle, except as allowed under section 42-3403, subsection B.

(c) May not be held or stored at a residential location, unless the sole luxury for sale or distribution by or on behalf of the distributor is taxed as a cigar under section 42-3052, paragraph 8 or 9 and the product weight of the cigars is not more than five hundred pounds. If the product is held or stored at a residential location, as a condition of licensure, the distributor shall provide written consent and allow access to the department to inspect the stock of luxuries and all books, papers, invoices, records and electronically stored data showing sales, receipts and purchases of luxuries. The distributor shall submit the written consent to the department with the license application or on demand of the department.

3. Tobacco products may be sold, transferred or distributed to a retailer located on an Indian reservation in this state only if the retailer is registered with, and has a registration identification number issued by, the department.

E. A person who is convicted of an offense described in section 42-1127, subsection E is permanently ineligible to hold a license issued under this section.

F. The department may not issue or renew a license to an applicant and may revoke a license issued under subsection C of this section if any of the following applies:

1. The applicant or licensee owes $1,000 or more in delinquent taxes imposed on tobacco products under this chapter that are not under protest or subject to a payment agreement.

2. The department has revoked any license held by the applicant or licensee within the previous two years.

3. The applicant or licensee has been convicted of a crime that relates to stolen or counterfeit cigarettes.

4. The applicant or licensee has imported cigarettes into the United States for sale or distribution in violation of 19 United States Code section 1681a.

5. The applicant or licensee has imported cigarettes into the United States for sale or distribution without fully complying with the federal cigarette labeling and advertising act (P.L. 89-92; 79 Stat. 282; 15 United States Code section 1331).

6. The applicant or licensee is in violation of section 13-3711 or section 36-798.06, subsection A.

7. Pursuant to section 44-7111, section 6(a), the applicant or licensee is in violation of section 44-7111, section 3(c).

8. The civil rights of the applicant or licensee have been suspended under section 13-904. An applicant or licensee whose civil rights have been suspended is ineligible to hold a license for a period of five years following the restoration of the applicant's or licensee's civil rights.

G. In addition to any other civil or criminal penalty and except as otherwise provided in this section, the department may deny the issuance or renewal of or revoke a license issued under subsection C of this section if the person violates any requirement under this title more than two times within a three-year period or fails to otherwise maintain the conditions of licensure in this section.

H. The department shall publish on its website the names of each person who is issued a license under subsection C of this section, including any trade names or business names used by the licensee. The department shall update the published names at least once each month.

I. A person may not apply for or hold a distributor's license if that person does not engage in the activities described in subsection A of this section. In addition to any other applicable penalty, the department may cancel the license of any licensee that fails to incur any tax liability under this chapter for twelve consecutive months.

J. Any revocation, cancellation or denial of a license issued under this section by the department must comply with section 41-1092.11, subsection B.

K. Notwithstanding any other law, for the purposes of subsection F, paragraphs 1 and 2 of this section, section 42-1127, subsection C and section 42-3461, subsection B, if a distributor has listed in its application more than one place of business, any revocation, cancellation, denial or nonrenewal of the distributor's license shall apply only with effect to remove the place of business or business location at which the activity occurred from the distributor's license.  If such a removal occurs, the distributor shall be subject to restrictions that the department prescribes by rule.
A.R.S. § 42-5029.01 — Arizona Code / Title 42 / Chapter 5 / Article 1 / Section 5029.01
42-5029.01 Qualifying Indian tribe; report; accounting procedures; definitions
Status: in_force

42-5029.01. Qualifying Indian tribe; report; accounting procedures; definitions

A. To qualify for funding pursuant to section 42-5029, subsection E, paragraph 4 or section 42-5029.02, subsection A, paragraph 4, a qualifying Indian tribe shall report its full-time equivalent student enrollment, as calculated under section 15-1466.01, in the preceding fiscal year to the auditor general by June 30 each year and shall comply with the same accounting procedures and practices prescribed by the auditor general for calculating full-time equivalent student enrollment for community college districts.  A qualifying Indian tribe may report to the state board of education the number of students simultaneously enrolled in a course for both high school and community college credit.

B. For the purposes of this section:

1. "Community college" includes any college that is owned, operated or chartered by a qualifying Indian tribe.

2. "Qualifying Indian tribe" has the same meaning prescribed in section 42-5031.01, subsection D.
A.R.S. § 42-11109 — Arizona Code / Title 42 / Chapter 11 / Article 3 / Section 11109
42-11109 Exemption for religious property; affidavit
Status: in_force

42-11109. Exemption for religious property; affidavit

A. Property or buildings that are used or held primarily for religious worship, including land, improvements, furniture and equipment, are exempt from taxation if the property is not used or held for profit.

B. Within ten days after receiving an initial affidavit of eligibility submitted under section 42-11152 by a nonprofit organization that owns property used primarily for religious worship, the county assessor, on request, shall issue a receipt for the affidavit.

C. The organization shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code when initially claiming the exemption.

D. A nonprofit organization that obtains title to property that was previously owned by another nonprofit organization and used primarily for religious worship shall comply with the requirements of section 42-11152 to qualify and establish eligibility for exemption.

E. If a nonprofit organization that holds title to property used primarily for religious worship fails to file the affidavit required by section 42-11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to:

1. Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer. The county treasurer is entitled to credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted.

2. Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid.
A.R.S. § 42-1108 — Arizona Code / Title 42 / Chapter 1 / Article 3 / Section 1108
42-1108 Audit; deficiency assessments; nonaudit adjustments; electronic filing
Status: in_force

42-1108. Audit; deficiency assessments; nonaudit adjustments; electronic filing

A. If a taxpayer fails to file a return required by this title or title 43, or if the department is not satisfied with the return or payment of the amount of tax required to be paid under either title, the department may examine any return, including any books, papers, records or memoranda relating to the return, to determine the correct amount of tax.  This examination must occur within the time periods prescribed by section 42-1104 and may be accomplished through a detailed review of transactions or records or by a statistically valid sampling method.

B. The department shall give the taxpayer notice of its determination of a deficiency by mail or as prescribed by subsection C of this section, and the deficiency, plus penalties and interest, is final forty-five days after the date of receipt of the notice to the taxpayer unless an appeal is taken to the department. For individual income tax, the period is ninety days after the date of mailing.  In the case of a joint income tax return, the notice may be a single joint notice mailed to the last known address, but if either spouse notifies the department that separate residences have been established, the department shall mail duplicate originals of the joint notice to each spouse.

C. The department may issue notice of its determination of a deficiency under subsection B of this section by using an electronic portal in lieu of mail, if all of the requirements of this subsection are met, after December 31, 2018 or when the department establishes the electronic portal, whichever is later.  The use of the electronic portal in lieu of mail is subject to the following requirements and conditions:

1. The taxpayer agrees in writing to allow the department to use the electronic portal to issue notice of the department's determination of deficiency for specified tax periods. The agreement shall include an email address that the department may use to notify the taxpayer as required by paragraph 2 of this subsection.  A taxpayer that provides an email address is certifying that the taxpayer regularly monitors that email address. If the taxpayer's email address changes, the taxpayer shall notify the department of a new email address.

2. The department shall notify the taxpayer, using the taxpayer's e-mail address, on the same day the notice of its determination of a deficiency is posted to the electronic portal.

3. The date of receipt for a notice provided by electronic portal is the later of the date the notice is posted to the electronic portal or the date the notification is received by the taxpayer. A notification sent by e-mail is considered to be received by the taxpayer on the day it is sent by the department.

D. If a deficiency is determined and the assessment becomes final, the department shall mail notice and demand to the taxpayer for the payment of the deficiency. Notwithstanding section 42-1125, subsection E, the deficiency assessed is due and payable at the expiration of ten days after the date of the notice and demand.

E. A certificate by the department of the mailing or e-mailing of the notices specified in this section is prima facie evidence of the assessment of the deficiency and the giving of the notices.

F. Any amount of tax in excess of that disclosed by the return due to a nonaudit adjustment, as listed in subsection G or H of this section, notice of which has been mailed to the taxpayer, is not a deficiency assessment within the meaning of this section. The taxpayer may not protest or appeal as in the case of a deficiency assessment, based on such a notice, and the assessment or collection of the amount of tax erroneously omitted in the return is not prohibited by this article.

G. An adjustment due to any of the following is considered a nonaudit adjustment:

1. An addition, subtraction, multiplication, division or other mathematical error shown on any return.

2. The failure of the taxpayer to properly compute the tax liability based on the taxable income reported on the return.

3. An incorrect usage or selection of information for a filed return from tax tables, schedules or similar documents provided by the department if the incorrect usage is apparent from the existence of other information on the return.

4. An entry on a return that is inconsistent with an entry on a schedule, form, statement, list or other document filed with the return.

5. An omission of information required on the return to substantiate an entry.

6. An entry on a return of a deduction or credit in an amount that exceeds a statutory limit if the limit is a monetary figure, a percentage, a ratio or a fraction and the items entered into the application of this limit appear on the return, including claiming a deduction or credit that is not authorized by statute for the taxable period.

7. Missing or incorrect taxpayer identification numbers for the purposes of claiming exemptions or credits.

8. An entry of a credit or deduction that requires a preapproval if the credit or deduction has not been preapproved or if the entry is for more than the preapproved amount.

9. An entry of a credit or deduction amount carried forward from a prior year that is outside of the statutory period allowed for the carryforward or is for an amount that is inconsistent with the taxpayer's prior year returns.

H. If a taxpayer that files its return electronically is allowed to input the information from a document into the electronic filing program instead of providing the actual document with the return, the department may request a copy of the document from the taxpayer at any time.  If the taxpayer provides the document, the department may adjust the return to reflect the amounts on the document.  If the taxpayer does not provide the requested document within the period provided by the department, the department may deny any deduction, credit or withholding that the document is intended to substantiate. An adjustment made pursuant to this subsection is considered a nonaudit adjustment under subsection G, paragraph 4 of this section, even though the actual document is not included with the electronically filed return if the department requests the document within sixty days after the due date of the return or the date on which the return was filed, whichever is later.
A.R.S. § 42-15202 — Arizona Code / Title 42 / Chapter 15 / Article 5 / Section 15202
42-15202 Assessment of permanently affixed mobile homes as real property
Status: in_force

42-15202. Assessment of permanently affixed mobile homes as real property

A mobile home that has been permanently affixed to real property and for which an affidavit of affixture has been recorded pursuant to this article shall be assessed as real property.
A.R.S. § 42-11110 — Arizona Code / Title 42 / Chapter 11 / Article 3 / Section 11110
42-11110 Exemption for cemeteries
Status: in_force

42-11110. Exemption for cemeteries

A. Cemeteries as defined in section 32-2101 that are set apart and used to inter deceased human beings and historic private burial sites and historic private cemeteries as defined in section 41-511.04 are exempt from taxation.

B. The owner of a cemetery, historic private burial site or historic private cemetery shall initially establish qualification for exemption under this section by filing an affidavit with the county assessor under section 42-11152.  Thereafter, the owner shall notify the county assessor pursuant to section 42-11152 if:

1. Any part of the property is no longer, or will not be, used as a cemetery or has been rezoned, and the assessor shall sever that part of the property from the exempt parcel.

2. Any interest in the title to any part of the property is conveyed to a new owner.
A.R.S. § 42-18101 — Arizona Code / Title 42 / Chapter 18 / Article 3 / Section 18101
42-18101 Sale and foreclosure of tax liens; effect of insubstantial failure to comply
Status: in_force

42-18101. Sale and foreclosure of tax liens; effect of insubstantial failure to comply

A. The county treasurer shall secure the payment of unpaid delinquent taxes by using the provisions of this article and articles 4, 5 and 6 of this chapter to sell the tax liens provided for in section 42-17154 and to foreclose the right to redeem.

B. An insubstantial failure to comply with these provisions does not affect the validity of:

1. The assessment and levy of taxes.

2. Any tax lien on real property for delinquent unpaid taxes.

3. The sale of a tax lien or the foreclosure of the right to redeem by which tax collection is enforced.
A.R.S. § 42-3308 — Arizona Code / Title 42 / Chapter 3 / Article 7 / Section 3308
42-3308 Agreements between the department and tribal tax authorities; definition
Status: in_force

42-3308. Agreements between the department and tribal tax authorities; definition

A. The department may collect and administer any tribal excise tax on tobacco products imposed by an Indian tribe, as described in section 42-3302, subsection C on entering into an intergovernmental agreement or contract with the tribe to provide a uniform or coordinated method of administration of Indian reservation tobacco tax imposed by this state under this article and tribal excise tax imposed by the tribe.

B. Any intergovernmental agreement or contract pursuant to subsection A of this section must contain provisions for a uniform or coordinated audit procedure for the Indian reservation tobacco tax imposed by this state under this article and tribal excise tax on tobacco products imposed by the tribe.

C. For the purposes of this section, "excise tax on tobacco products" has the same meaning prescribed for "luxury, sales, transaction privilege or similar tax" under section 42-3301.
A.R.S. § 42-1152 — Arizona Code / Title 42 / Chapter 1 / Article 4 / Section 1152
42-1152 Filing of lien; notice; recording
Status: in_force

42-1152. Filing of lien; notice; recording

A. The notice prescribed in section 42-1151, subsection B may be filed by the department against the taxpayer's real property located in any county by recording a notice of lien in the form prescribed by subsection C of this section in the office of the county recorder.

B. The notice prescribed in section 42-1151, subsection B may be filed by the department against the taxpayer's personal property or rights to personal property located within this state by recording a notice of lien in the form prescribed by subsection C of this section in the office of the secretary of state.

C. A notice of lien recorded under this section shall specify the nature of the tax, the amount of tax, interest and penalty and other amounts owed by the taxpayer to the department that are due, the taxable periods for which such amounts are due and the name and last known address of the taxpayer liable for such amounts.
A.R.S. § 42-17057 — Arizona Code / Title 42 / Chapter 17 / Article 2 / Section 17057
42-17057 Computing new levy limits in the case of county division or consolidation; election on revised levy limit
Status: in_force

42-17057. Computing new levy limits in the case of county division or consolidation; election on revised levy limit

A. In the event of a division of a county into two or more new counties or the consolidation of counties, the property tax oversight commission shall determine the maximum allowable levy of primary property taxes in each new county for the first full fiscal year after the new county governments are established by:

1. Computing the maximum levy allowable for the fiscal year under section 42-17051 for the old county or counties, assuming no division or consolidation had occurred.

2. Assigning that maximum amount to the new county, in the case of a consolidation, or apportioning that maximum amount among the new counties, in the case of a division, according to their respective net assessed limited property valuations.

B. The amounts thus assigned to the new counties are the levy limits for purposes of this article for that fiscal year.

C. On or before April 1 of the first full fiscal year after the new county government is established, the board of supervisors of a new county, by a two-thirds vote, may call a special election to submit a revised levy limit to the qualified electors of the county.  The special election shall be held on the third Tuesday in May.  Immediately after calling the election the board shall publicize and distribute to the registered voters of the county information regarding the date and polling places of the election and a comparison of the current levy limit and the proposed levy limit.  The ballot shall be printed with the question "Shall the proposed levy limit be adopted for _______________ county?" followed by squares marked "yes" and "no" in which the voter may indicate a vote for or against the proposition. If a majority of the voters voting:

1. Approves the proposed levy limit, it shall be applied to the county for all purposes under this article for the next fiscal year and is the basis from which to determine the levy limit under section 42-17051 for subsequent fiscal years.

2. Rejects the proposed levy limit, the levy limit for the county assigned pursuant to subsection A of this section is the basis from which to determine the levy limit under section 42-17051 for subsequent fiscal years.
A.R.S. § 42-15203 — Arizona Code / Title 42 / Chapter 15 / Article 5 / Section 15203
42-15203 Affidavit of affixture
Status: in_force

42-15203. Affidavit of affixture

A. A person who owns a mobile home that is permanently affixed to real property may file an affidavit of affixture with the county recorder of the county in which the real property is located.

B. An affidavit of affixture shall contain all of the following:

1. The vehicle identification numbers of the mobile home.

2. The legal description of the real property to which the mobile home has been affixed.

3. A statement that the mobile home has not previously been assessed and taxed in this state as personal property or the name and address of the person to whom the last tax statement for the mobile home was sent and the location of the mobile home when it was last taxed.

4. The name of the holder of any security interests in the mobile home that are not terminated by consent of the secured party contained on the affidavit of affixture pursuant to subsection C of this section and the original principal amount secured by the security interest.

5. As an attachment, the department of transportation's receipt issued pursuant to section 28-2063, subsection A, paragraph 3.

C. The recording of an affidavit of affixture does not impair the rights of any holder of a perfected security interest in the mobile home unless the affidavit of affixture contains the acknowledged consent of the secured party to the termination of the security interest. If a secured party so consents, that security interest terminates when the affidavit of affixture is recorded.

D. If an affidavit of affixture is submitted for recording on a mobile home entering this state for sale or installation, a certificate of compliance or waiver issued by the Arizona department of housing is required and shall be submitted with the affidavit of affixture.

E. If a release of a security interest that, according to its terms, recites that it secures an obligation having a stated indebtedness not greater than five hundred thousand dollars exclusive of interest has not been executed and recorded within sixty days of full satisfaction of the obligation secured by the security interest, a title insurer as defined in section 20-1562 may prepare, execute and record a full release of the security interest. At least thirty days before issuing and recording a release pursuant to this subsection, the title insurer shall mail by certified mail with postage prepaid, return receipt requested, to the holder of the security interest contained in the affidavit of affixture at the last known address shown of record and to any persons who according to the records of the title insurer received payment of the obligation at the address shown in the records, a notice of its intention to release the security interest accompanied by a copy of the release to be recorded.  The release shall set forth:

1. The name of the holder of the security interest or any successors in interest of record of the security interest and, if known, the name of any servicing agent.

2. The name of the owner of the property shown on the affidavit of affixture.

3. The name of the current record owner of the property.

4. The recording reference to the affidavit of affixture.

5. The date and amount of payment, if known.

6. A statement that the title insurer has actual knowledge that the obligation secured by the security interest has been paid in full.

F. The release of security interest may be executed by a duly appointed attorney-in-fact of the title insurer, but such delegation does not relieve the title insurer from any liability pursuant to this section.

G. A release issued pursuant to subsection E of this section is entitled to recordation and, when recorded, constitutes a full release of security interest.

H. In addition to any other remedy provided by law, a title insurer preparing or recording the release of security interest pursuant to subsection E of this section is liable to any party for actual damage, including attorney fees, that any person may sustain by reason of the issuance and recording of the release of security interest.

I. The title insurer shall not record a release of security interest if, before the expiration of the thirty-day period specified in subsection E of this section, the title insurer receives a notice from the holder or servicing agent that states that the security interest continues to secure an obligation.

J. The title insurer may charge a reasonable fee for services to the owner of the land or other person requesting a release of security interest, including search of title, document preparation and mailing services rendered, and in addition may collect official fees.

K. A mobile home identified in an affidavit of affixture recorded pursuant to section 33-1501 shall be assessed as personal property.
A.R.S. § 42-14257 — Arizona Code / Title 42 / Chapter 14 / Article 6 / Section 14257
42-14257 Debt; lien
Status: in_force

42-14257. Debt; lien

The tax imposed by this article:

1. Is a debt of the airline company.

2. May be collected by an action instituted and prosecuted by the attorney general on the director's request.

3. Is a lien pursuant to section 42-17154 against the assessed flight property.

4. Is also a lien against all other property of the taxpayer under section 42-1151.
A.R.S. § 42-1127 — Arizona Code / Title 42 / Chapter 1 / Article 3 / Section 1127
42-1127 Criminal violation; classification; place of trial; definitions
Status: in_force

42-1127. Criminal violation; classification; place of trial; definitions

A. It is a class 4 felony to:

1. Corruptly or by force or threats of force or injury:

(a) Attempt to intimidate, impede or injure an employee of the department acting in an official capacity.

(b) Obstruct, impede or attempt to obstruct or impede the administration of this title or title 43.

2. Attempt by means of bribery, misrepresentation, intimidation or force or threats of force to obstruct, delay or prevent the communication of information or testimony relating to a violation of this title or title 43 to an employee or officer of the department, or knowingly injure another personally or injure the person's property on account of the person giving, personally or by any other person, any such information or testimony to an employee of the department.

3. Make, forge, alter or counterfeit with the intent to defraud a stamp or meter impression prepared or prescribed by the department under chapter 3 of this title, or to knowingly utter, publish, pass or tender as true a false, altered, forged or counterfeited stamp or meter impression, or to use a stamp provided for and required by chapter 3 of this title which has already once been used, with the intent to evade the tax imposed by chapter 3 of this title.

4. Tamper with, or cause to be tampered with, any metering machine authorized to be used under chapter 3 of this title.

B. A first-time violation of this subsection may be designated as a class 1 misdemeanor, but otherwise it is a class 5 felony to:

1. Knowingly fail to pay any tax administered pursuant to this article due or believed due by the taxpayer with intent to evade the tax.

2. Knowingly prepare, present or aid, procure or advise in preparing or presenting any return, affidavit, claim or other document which is fraudulent or is false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the taxpayer authorized or required to present the return, affidavit, claim or document.

3. Simulate or falsely or fraudulently execute or sign any license or other required document, or cause the license or document to be falsely or fraudulently executed or advise or aid in such execution, with the intent to conceal or cover up a material fact relating to a tax administered pursuant to this article.

4. Knowingly fail to file a return or supply required information, or falsify or conceal a material fact, document or record, make a false, fictitious or fraudulent statement or representation or make or use a false writing or document knowing it to contain a false, fictitious or fraudulent statement or entry, with intent that the department rely on the false, fictitious or fraudulent statement or entry in determining tax liability under this article.

5. Purchase, install or use any automated sales suppression device or service or zapper or phantom-ware with the intent to defeat or evade any tax administered pursuant to this article that is due or believed to be due by the taxpayer. In addition, a person that is convicted of a violation of this paragraph:

(a) Is subject to a fine of not more than one hundred thousand dollars or, if a corporation, not more than five hundred thousand dollars.  Monies paid as fines shall be deposited in the department of revenue tax fraud interdiction fund established by section 42-1116.02.

(b) Is liable for all taxes, fees, penalties and interest due as a result of the person's use of the automated sales suppression device or service or zapper or phantom-ware.

(c) Shall forfeit all profits associated with the person's purchase or use of the automated sales suppression device or service or zapper or phantom-ware.

6. Sell, license, purchase, install, transfer, sell as a service, manufacture, develop or possess any automated sales suppression device or service or zapper or phantom-ware knowing that the purpose of the device is to defeat or evade any tax administered pursuant to this article.  In addition, a person that is convicted of a violation of this paragraph:

(a) Is subject to a fine of not more than one hundred thousand dollars or, if a corporation, not more than five hundred thousand dollars.  Monies paid as fines shall be deposited in the department of revenue tax fraud interdiction fund established by section 42-1116.02.

(b) Is liable for all taxes, fees, penalties and interest due as a result of the person's use of the automated sales suppression device or service or zapper or phantom-ware.

(c) Shall forfeit all profits associated with the person's sale or use of the automated sales suppression device or service or zapper or phantom-ware.

C. A distributor as defined in section 42-3001 who violates section 42-3452, subsection A, paragraph 2 is guilty of a class 1 misdemeanor. If the distributor is convicted of a second violation of section 42-3452, subsection A, paragraph 2, the department may revoke the distributor's license issued pursuant to section 42-3401.

D. A distributor as defined in section 42-3001 who violates any provision of section 42-3401, section 42-3452, subsection A, paragraph 1 or section 42-3456 is guilty of a class 1 misdemeanor.  If the distributor is a licensee under section 42-3401 and is convicted of a second violation of section 42-3456, the department may revoke the distributor's license.

E. It is a class 3 felony for any person to:

1. Except as provided in section 42-3457, transport, in an unstamped or unlawfully stamped condition, for the purpose of sale ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6, 7 or 9 of this title.

2. Wilfully sell or offer for sale, in an unstamped or unlawfully stamped condition, ten thousand or more cigarettes that were subject to the tax imposed by chapter 3, article 2, 6 or 7 of this title.

3. Wilfully sell or offer for sale off an Indian reservation ten thousand or more cigarettes that are stamped for on-reservation sales.

F. For the purposes of subsection E of this section, the possession or transportation in this state at any time by any person, other than a licensed distributor, as defined in section 42-3001, of ten thousand or more cigarettes in an unstamped or unlawfully stamped condition, other than in interstate shipment consistent with federal contraband cigarette trafficking laws (18 United States Code chapter 114), is presumptive evidence that the cigarettes:

1. Are possessed or transported for the purpose of sale.

2. Are subject to the taxes imposed by chapter 3, article 2, 6, 7 or 9 of this title.

G. A person who knowingly sells a luxury on which the tax has not been paid or accounted for as required by chapter 3 of this title is guilty of a class 1 misdemeanor.

H. A retailer who possesses any package, bottle or other container containing a luxury that does not bear the stamps required to be affixed by chapter 3 of this title is guilty of a class 1 misdemeanor.

I. A person is guilty of a class 3 misdemeanor who:

1. Is engaged in the business of selling a luxury, either at wholesale or retail, and who knowingly refuses or fails to produce on demand by the department invoices of all luxuries the person purchased or received within two years immediately before the demand, unless the person shows by satisfactory proof that the person is unable to do so for reasons beyond the person's control.

2. Makes a false entry on an invoice, package or container of luxuries, or who with intent to avoid the taxes imposed by chapter 3 of this title presents a false entry for inspection of the department.

3. Knowingly prevents or hinders the department from making a full inspection of any place where a luxury is sold or stored, or knowingly prevents or hinders the inspection of invoices, books, records or papers required to be kept.

4. Violates any provision of this article or an administrative rule adopted by the department for which no other penalty is prescribed.

J. The place of trial for the offenses enumerated in this section is in the county of residence or principal place of business of the defendant or defendants. If the defendant has no residence or principal place of business in this state, the trial shall be held in Maricopa county.

K. A person who defrauds this state by violating any requirement under chapter 3 of this title, with criminal intent to evade any such requirement, is guilty of a class 4 felony and shall pay a penalty of three times the retail value of the cigarettes involved.

L. A person who knowingly violates any requirement under chapter 3 of this title, with the criminal intent to evade any such requirement, is guilty of a class 6 felony.

M. A person who knowingly sells or offers to sell off an Indian reservation more than two thousand but less than ten thousand cigarettes that are stamped for on-reservation sales, with the criminal intent to evade the tax imposed by chapter 3 of this title, is guilty of a class 5 felony.

N. Any distributor, as defined in section 42-3001, who sells or possesses more than two thousand cigarettes with false manufacturing labels or cigarettes with counterfeit tax stamps, with the criminal intent to evade any requirement under chapter 3 of this title, is guilty of a class 5 felony and shall pay a penalty of:

1. For a first violation involving two thousand or more cigarettes, two thousand dollars or three times the retail value of the cigarettes, whichever is greater.

2. For a subsequent violation involving two thousand or more cigarettes, fifty thousand dollars or three times the retail value of the cigarettes, whichever is greater.

O. For the purposes of this section:

1. "Automated sales suppression device" means a computer software program that falsifies the electronic records of electronic cash registers and other point-of-sale systems, including transaction data and transaction reports.

2. "Electronic cash register" means an electronic or computer system that records a register or supporting data for the purpose of computing, storing or processing retail sales and other transaction data.

3. "Luxury" means any article, object or device on which a tax is imposed under chapter 3 of this title.

4. "Phantom-ware" means hidden or concealed computer software or hardware of an electronic cash register or other point-of-sale system that can create a second set of records or eliminate or manipulate transaction records that may or may not be preserved in digital formats in order to misrepresent the existence or the true record of a transaction in the electronic cash register.

5. "Point-of-sale system" means an electronic device that is used to process card payments at retail locations.

6. "Transaction data" means data relating to a commercial transaction that includes data identifying each purchased item, the price for each item, a taxability determination for each item, a segregated tax amount for each taxed item, the amount of cash or credit tendered, the net amount of change returned to the customer, the date and time of the purchase, the name, address and identification number of the vendor and the receipt or invoice number of the transaction.

7. "Transaction report" means any means or method of reporting, displaying or generating transaction data.

8. "Zapper":

(a) Means a computer software program that falsifies the electronic records of electronic cash registers or other point-of-sale systems, including, but not limited to, transaction data and transaction reports.

(b) Includes the software program, any device that carries the software program or an internet link to the software program.
A.R.S. § 42-18208 — Arizona Code / Title 42 / Chapter 18 / Article 5 / Section 18208
42-18208 Expiration of lien and certificate; notice
Status: in_force

42-18208. Expiration of lien and certificate; notice

A. If a tax lien that was purchased pursuant to section 42-18114 on or before August 31, 2002 is not redeemed and the purchaser or the purchaser's heirs or assigns fail to commence an action to foreclose the right of redemption on or before ten years from the date that the lien was purchased, the certificate of purchase or registered certificate expires and the lien is void.

B. At least six months before the certificate of purchase or registered certificate expires, the county treasurer shall:

1. Notify each purchaser by certified mail of the pending expiration.

2. Post the names of purchasers who hold liens that are subject to pending expiration:

(a) Near the outer door of the office of the county treasurer.

(b) On the county treasurer's web site.

3. Publish the names of purchasers who hold liens that are subject to pending expiration at least one time in a newspaper of general circulation in the county.

C. Subsection A of this section does not apply if the tax lien is assigned to the state pursuant to section 42-18113 unless the lien is resold pursuant to section 42-18122.

D. If a judicial proceeding prohibits bringing an action to foreclose the right to redeem, the time of expiration under this section shall be extended by twelve months following the completion of the judicial proceeding.
A.R.S. § 42-6210 — Arizona Code / Title 42 / Chapter 6 / Article 5 / Section 6210
42-6210 Park property lease excise tax
Status: in_force

42-6210. Park property lease excise tax

A. A county shall levy and collect an annual excise tax on each prime lessee of a lease with the national park service of the United States department of the interior of a property improvement located in the county.

B. The tax prescribed by this section shall be assessed, collected and distributed in the same manner as prescribed in this article for the government property lease excise tax, except that:

1. Section 42-6206 does not apply to a lease with the national park service.

2. The tax rate shall not be less than twenty per cent of the tax rate prescribed in section 42-6203, subsection A or B, as applicable.
A.R.S. § 42-5402 — Arizona Code / Title 42 / Chapter 5 / Article 9 / Section 5402
42-5402 Levy of tax
Status: in_force

42-5402. Levy of tax

A. A prepaid wireless telecommunications E911 excise tax is levied on every seller in an amount of eight-tenths of one per cent of the gross proceeds of sales or gross income derived from the retail sale of prepaid wireless telecommunications service.

B. The seller is liable for the tax imposed under this section.  The amount of tax may be separately stated on the invoice, receipt or other similar document that is provided to the consumer by the seller or otherwise disclosed to the consumer. The seller may retain three per cent of the amount of tax collected before remitting the tax to the department.

C. For the purpose of determining the location of a retail sale of prepaid wireless telecommunications service under this article, a retail sale of prepaid wireless telecommunications service occurs in this state if:

1. The retail sale of prepaid wireless telecommunications service is completed in person at a business location in this state.

2. If paragraph 1 of this subsection does not apply, the product is delivered to the consumer at an address in this state.

3. If paragraphs 1 and 2 of this subsection do not apply, the seller's records that are maintained in the ordinary course of business indicate that the consumer's address is located in this state and the seller's records are not made or kept in bad faith.

4. If paragraphs 1, 2 and 3 of this subsection do not apply, the consumer gives the seller an address in this state during the completion of the sale, including the consumer's payment instrument if no other address is available, and the address is not given in bad faith.

5. If paragraphs 1 through 4 of this subsection do not apply, the wireless telephone number is associated with a location in this state.

D. The amount of tax that is paid by a seller shall not be included in the tax base for computing any transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, that is imposed by this state, any political subdivision of this state or any intergovernmental agency.

E. The tax levied under this section shall be the only E911 funding obligation for prepaid wireless telecommunications service in this state. This state, any political subdivision of this state or any intergovernmental agency shall not levy any other similar tax or fee, however denominated, on any seller or consumer for the sale, purchase, use or provision of prepaid wireless telecommunications service for the purpose of funding E911 service.
A.R.S. § 42-11115 — Arizona Code / Title 42 / Chapter 11 / Article 3 / Section 11115
42-11115 Exemption for property held to preserve or protect scientific resources
Status: in_force

42-11115. Exemption for property held to preserve or protect scientific resources

Property that is held by a charitable organization, recognized under section 501(c)(3) of the internal revenue code, to preserve and protect scientific, biological, geological, paleontological, natural or archaeological resources is exempt from taxation.
A.R.S. § 42-18122 — Arizona Code / Title 42 / Chapter 18 / Article 3 / Section 18122
42-18122 Resale of tax liens assigned to the state; fee
Status: in_force

42-18122. Resale of tax liens assigned to the state; fee

A. If a tax lien is assigned to this state as provided by this article, the county treasurer shall sell, assign and deliver the certificate of purchase to any person who pays to the county treasurer the whole amount then due under the certificate, including interest, penalties and charges, and in addition the entire amount of subsequent taxes assessed on the property described in the certificate.

B. The county treasurer shall collect a fee of not more than ten dollars from the assignee for making each assignment.
A.R.S. § 42-11112 — Arizona Code / Title 42 / Chapter 11 / Article 3 / Section 11112
42-11112 Exemption for observatories
Status: in_force

42-11112. Exemption for observatories

Observatories that are maintained for astronomical research and education for the public welfare and property that is used in the work or maintenance of observatories, including property held in trust, are exempt from taxation if the observatories and other property are used only for those purposes and are not used or held for profit.
A.R.S. § 42-11107 — Arizona Code / Title 42 / Chapter 11 / Article 3 / Section 11107
42-11107 Exemption for institutions for relief of indigent or afflicted
Status: in_force

42-11107. Exemption for institutions for relief of indigent or afflicted

Property of charitable institutions for the relief of the indigent or afflicted, appurtenant land and their fixtures, equipment and other reasonably required property including property used for the administration of such relief, are exempt from taxation if the institutions and property are not used or held for profit.
A.R.S. § 42-6003 — Arizona Code / Title 42 / Chapter 6 / Article 1 / Section 6003
42-6003 Multi-municipal taxes; determination of municipality entitled to levy and collect taxes; appeal; definitions
Status: in_force

42-6003. Multi-municipal taxes; determination of municipality entitled to levy and collect taxes; appeal; definitions

A. Except as otherwise provided in this section, a taxpayer who has paid transaction privilege taxes on a transaction to an appropriate city or town, or qualified for an exemption from transaction privilege taxes under the ordinance of an appropriate city or town, is not required to pay transaction privilege taxes on the same transaction to any other city or town.

B. If a city or town asserts, in whole or in part, the right to a tax which was paid to an appropriate city or town, the cities and towns claiming the tax shall attempt to resolve allocation of the tax among themselves.  Except as otherwise provided in this section, the taxpayer shall not be a party to the dispute but may be compelled to give evidence or produce books and records.

C. If a city or town asserts the right to tax a transaction which is exempt from transaction privilege taxes under the ordinance of an appropriate city or town, the city or town asserting the right to tax and the city or town which the taxpayer asserts is an appropriate city or town shall attempt to resolve which city or town has the superior jurisdictional claim. Except as otherwise provided in this section, the taxpayer shall not be a party to the dispute but may be compelled to give evidence or produce books and records.

D. If the cities or towns involved cannot resolve the dispute arising under subsection B or C, any city or town which is a party to the dispute may submit the issue to the municipal tax code commission for resolution. The taxpayer may intervene in any proceeding before the commission to assist in resolving the dispute. The commission shall determine which city or town has the superior jurisdictional claim, based upon its respective ordinances and common law principles related to transaction privilege taxation, and, if the taxpayer paid tax on the transaction, shall award the entire tax to the prevailing city or town.

E. If it is determined that the taxpayer should have paid taxes to a city or town with a higher tax rate than the city or town to which the tax was actually paid, the taxpayer is liable for the tax at the higher rate only on transactions occurring after the taxable month of the written notification requirement provided in subsection H.

F. If a city or town with a higher tax rate asserts a claim to transaction privilege taxes paid to an appropriate city or town with a lower tax rate, the taxpayer may submit the issue to the municipal tax code commission for resolution and may intervene as a party in a proceeding before the commission to resolve the dispute.

G. Any party aggrieved by an order or decision of the municipal tax code commission may appeal to the state board of tax appeals within thirty days after notice of the order or decision of the commission has been received by the party. Any party aggrieved by an order or decision of the state board of tax appeals under this section may appeal the order or decision to tax court but must commence such action within thirty days after notice of the order or decision of the state board has been received by the party.

H. Following an agreement among the cities or towns involved as to which city or town has jurisdiction over transaction privilege taxation on a transaction or following a final determination by the municipal tax code commission, the state board of tax appeals or the tax court that a city or town is entitled to collect such taxes, and following written notification to the taxpayer, the taxpayer shall thereafter pay transaction privilege taxes on similar transactions to that city or town.

I. In this section:

1. "Appropriate city or town" means a city or town in this state either:

(a) In which the business sales office which generated the taxable transaction is located.

(b) In which the purchaser resides, is located or is situated at the time of the transaction.

(c) Which imposes or claims the right to impose a transaction privilege tax on the transaction in question under its ordinance.

2. "Transaction privilege tax" means a municipal transaction privilege license tax, use tax or similar tax and includes for purposes of this section any penalty assessed by a city or town for nonpayment, delinquent payment or failure to timely report or file a return, and any interest assessed because of late payment of taxes.
A.R.S. § 42-1125 — Arizona Code / Title 42 / Chapter 1 / Article 3 / Section 1125
42-1125 Civil penalties; definition
Status: in_force

42-1125. Civil penalties; definition

A. If a taxpayer fails to make and file a return for a tax administered pursuant to this article on or before the due date of the return or the due date as extended by the department, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect, four and one-half percent of the tax required to be shown on the return shall be added to the tax for each month or fraction of a month elapsing between the due date of the return and the date on which it is filed. The total penalty shall not exceed twenty-five percent of the tax found to be remaining due. The penalty so added to the tax is due and payable on notice and demand from the department. For the purpose of computing the penalty imposed under this subsection, the amount required to be shown as tax on a return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of the month and by the amount of any credit against the tax that may be claimed on the return. If the amount required to be shown as tax on a return is less than the amount shown as tax on the return, the penalty described in this subsection shall be applied by substituting the lower amount.

B. If a taxpayer fails or refuses to file a return on notice and demand by the department, the taxpayer shall pay a penalty of twenty-five percent of the tax, which is due and payable on notice and demand by the department, in addition to any penalty prescribed by subsection A of this section, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect. This penalty is payable on notice and demand from the department.

C. If a taxpayer fails or refuses to furnish any information requested in writing by the department, the department may add a penalty of twenty-five percent of the amount of any deficiency tax assessed by the department concerning the assessment of which the information was required, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.

D. If a person fails to pay the amount shown as tax on any return within the time prescribed, a penalty of one-half of one percent, not to exceed a total of ten percent, shall be added to the amount shown as tax for each month or fraction of a month during which the failure continues, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.  If the department determines that the person's failure to pay was due to reasonable cause and not due to wilful neglect and that a payment agreement pursuant to section 42-2057 is appropriate, the department shall not impose the penalty unless the taxpayer fails to comply with the payment agreement.  If the taxpayer is also subject to a penalty under subsection A of this section for the same tax period, the total penalties under subsection A of this section and this subsection shall not exceed twenty-five percent. For the purpose of computing the penalty imposed under this subsection:

1. The amount shown as tax on a return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of that month and by the amount of any credit against the tax that may be claimed on the return.

2. If the amount shown as tax on a return is greater than the amount required to be shown as tax on that return, the penalty shall be applied by substituting the lower amount.

E. If a person fails to pay any amount required to be shown on any return that is not so shown within twenty-one calendar days after the date of notice and demand, a penalty of one-half of one percent, not to exceed a total of ten percent, shall be added to the amount of tax for each month or fraction of a month during which the failure continues, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.  If the taxpayer is also subject to penalty under subsection A of this section for the same tax period, the total penalties under subsection A of this section and this subsection shall not exceed twenty-five percent. For the purpose of computing the penalty imposed under this subsection, any amount required to be shown on any return shall be reduced by the amount of any part of the tax that is paid on or before the beginning of that month and by the amount of any credit against the tax that may be claimed on the return.

F. In the case of a deficiency, for which a determination is made of an additional amount due, that is due to negligence but without intent to defraud, the person shall pay a penalty of ten percent of the amount of the deficiency.

G. If part of a deficiency is due to fraud with intent to evade tax, fifty percent of the total amount of the tax, in addition to the deficiency, interest and other penalties provided in this section, shall be assessed, collected and paid as if it were a deficiency.

H. If the amount, whether determined by the department or the taxpayer, required to be withheld by the employer pursuant to title 43, chapter 4 is not paid to the department on or before the date prescribed for its remittance, the department may add a penalty of twenty-five percent of the amount required to be withheld and paid, unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.

I. A person who, with or without intent to evade any requirement of this article or any lawful administrative rule of the department of revenue under this article, fails to file a return or to supply information required under this article or who, with or without such intent, makes, prepares, renders, signs or verifies a false or fraudulent return or statement or supplies false or fraudulent information shall pay a penalty of not more than $1,000. This penalty shall be recovered by the department of law in the name of this state by an action in any court of competent jurisdiction.

J. If the taxpayer files what purports to be a return of any tax administered pursuant to this article but that is frivolous or that is made with the intent to delay or impede the administration of the tax laws, that person shall pay a penalty of $500.

K. If any person who is required to file or provide an information return under this title or title 43 or who is required to file or provide a return or report under chapter 3 of this title fails to file the return or report at the prescribed time or in the manner required, or files a return or report that fails to show the information required, that person shall pay a penalty of $100 for each month or fraction of a month during which the failure continues unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.  The total penalties for each return or report under this subsection shall not exceed $500.

L. If it appears to the superior court that proceedings before it have been instituted or maintained by a taxpayer primarily for delay or that the taxpayer's position is frivolous or groundless, the court may award damages in an amount not to exceed $1,000 to this state. Damages so awarded shall be collected as a part of the tax.

M. A person who is required under section 43-413 to furnish a statement to an employee and who wilfully furnishes a false or fraudulent statement, or who wilfully fails to furnish a statement required by section 43-413, is for each such failure subject to a penalty of $50.

N. A person who is required to collect or truthfully account for and pay a tax administered pursuant to this article, including any luxury privilege tax, and who wilfully fails to collect the tax or truthfully account for and pay the tax, or wilfully attempts in any manner to evade or defeat the tax or its payment, is, in addition to other penalties provided by law, liable for a penalty equal to the total amount of the tax evaded, not collected or not accounted for and paid.  Except as provided in subsections U, V and W of this section, no other penalty under this section relating to failure to pay tax may be imposed for any offense to which this subsection applies.

O. For reporting periods beginning from and after February 28, 2011, if a taxpayer who is required under section 42-1129 to pay by electronic funds transfer fails to do so, that taxpayer shall pay a penalty of five percent of the amount of the payment not made by electronic funds transfer unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.  For the reporting periods beginning on July 1, 2015, the penalty in this subsection applies to any taxpayer who is required under section 42-3053 to pay by electronic funds transfer and fails to do so unless it is shown that the failure is due to reasonable cause and not due to wilful neglect.

P. Unless due to reasonable cause and not to wilful neglect:

1. A person who fails to provide that person's taxpayer identification number in any return, statement or other document as required by section 42-1105, subsection A shall pay a penalty of $5 for each such failure.

2. A person, when filing any return, statement or other document for compensation on behalf of a taxpayer, who fails to include that person's own taxpayer identification number and the taxpayer's identification number shall pay a penalty of $50 for each such failure.

3. A person, when filing any return, statement or other document without compensation on behalf of a taxpayer, who fails to include that person's own taxpayer identification number and the taxpayer's identification number is not subject to a penalty.

No other penalty under this section may be imposed if the only violation is failure to provide taxpayer identification numbers.

Q. If a taxpayer fails to pay the full amount of estimated tax required by title 43, chapter 5, article 6, a penalty is assessed equal to the amount of interest that would otherwise accrue under section 42-1123 on the amount not paid for the period of nonpayment, not exceeding ten percent of the amount not paid. The penalty prescribed by this subsection is in lieu of any other penalty otherwise prescribed by this section and in lieu of interest prescribed by section 42-1123.

R. Beginning January 1, 2015, if a taxpayer continues in business without timely renewing a municipal privilege tax license as prescribed in section 42-5005, subsection D, a civil penalty of up to $25 shall be added to the renewal fee for each jurisdiction.

S. The department of law, with the consent of the department of revenue, may compromise any penalty for which it may bring an action under this section.

T. Penalties shall not be assessed under subsection D of this section on additional amounts of tax paid by a taxpayer at the time the taxpayer voluntarily files an amended return. This subsection does not apply if:

1. The taxpayer is under audit by the department.

2. The amended return was filed on demand or request by the department.

U. In addition to other penalties provided by law, a person who knowingly and intentionally does not comply with any requirement under chapter 3 of this title relating to tobacco products shall pay a penalty of $1,000. A person who knowingly and intentionally does not pay any luxury tax that relates to tobacco products imposed by chapter 3 of this title shall pay a penalty that is equal to ten percent of the amount of the unpaid tax.

V. A manufacturer or importer or a distributor, as defined in section 42-3001, who knowingly and intentionally sells or possesses cigarettes with false manufacturing labels or cigarettes with counterfeit tax stamps, or who obtains cigarettes through the use of a counterfeit license, shall pay the following penalties:

1. For a first violation involving two thousand or more cigarettes, $1,000.

2. For a subsequent violation involving two thousand or more cigarettes, $5,000.

W. The civil penalties in this section are in addition to any civil penalty under chapter 3, article 10, 11 or 12 of this title.

X. Notwithstanding subsection A of this section:

1. And except as provided by paragraph 2 of this subsection, the penalty imposed on a taxpayer that fails to make and file a return for tax administered pursuant to chapter 5 or 6 of this title on or before the due date of the return or the due date as extended by the department, unless it is shown that the failure is due to a reasonable cause and not due to wilful neglect, is four and one-half percent of the tax required to be shown on the return, or $25, whichever is greater.  The penalty shall be added to the tax for each month or fraction of a month elapsing between the due date of the return and the date on which it is filed. The total penalty may not exceed twenty-five percent of the tax required to be shown on the return, or $100, whichever is greater.

2. The penalty imposed on a taxpayer that is required under section 42-5014 to file electronically and that fails to do so is five percent of the tax required to be shown on the return, or $25, whichever is greater, unless the failure is due to a reasonable cause and not due to wilful neglect.

3. For the purposes of this subsection, "tax required to be shown on the return" means the total tax liability before deducting payments.

Y. Notwithstanding subsection B of this section, the penalty imposed on a taxpayer that fails to file a return pursuant to chapter 5 or 6 of this title on notice and demand by the department is twenty-five percent of the tax, or $100, whichever is greater.  The penalty is due and payable on notice and demand by the department, in addition to any penalty prescribed by subsection A of this section, unless it is shown that the failure is due to a reasonable cause and not due to wilful neglect.

Z. For the purposes of this section, and only as applied to the taxes imposed by chapter 5, articles 1 through 6 and chapter 6, articles 1, 2 and 3 of this title, "reasonable cause" means a reasonable basis for the taxpayer to believe that the tax did not apply to the business activity or the storage, use or consumption of the taxpayer's tangible personal property in this state.
A.R.S. § 42-17105 — Arizona Code / Title 42 / Chapter 17 / Article 3 / Section 17105
42-17105 Adoption of budget
Status: in_force

42-17105. Adoption of budget

A. After the hearing on estimates under section 42-17104 is concluded, the governing body shall convene in a special meeting and finally determine and adopt estimates of proposed expenditures for the purposes stated in the published proposal.

B. The adopted estimates constitute the budget of the county, city or town for the current fiscal year.

C. The total amounts that are proposed to be spent in the budget shall not exceed the total of amounts that were proposed for expenditure in the published estimates.
A.R.S. § 42-14004 — Arizona Code / Title 42 / Chapter 14 / Article 1 / Section 14004
42-14004 Change of valuation
Status: in_force

42-14004. Change of valuation

After the department determines the valuation of any property but before it transmits the valuation to the appropriate assessing authority, the department, on the property owner's written application or on its own motion, may change the valuation to properly reflect the property's full cash value. The department shall immediately send by mail or by e-mail a copy of the change to the property owner.
A.R.S. § 42-5252 — Arizona Code / Title 42 / Chapter 5 / Article 6 / Section 5252
42-5252 Levy of tax; applicability
Status: in_force

42-5252. Levy of tax; applicability

A. A tax is levied on every provider in an amount as follows:

1. For the fiscal years beginning from and after June 30, 2001 and ending before July 1, 2006, thirty-seven cents per month for each activated wire and wireless service account for the purpose of financing emergency telecommunication services.

2. For fiscal year 2006-2007, twenty-eight cents per month for each activated wire and wireless service account for the purpose of financing emergency telecommunication services.

3. For the fiscal years beginning from and after June 30, 2007, twenty cents per month for each activated wire and wireless service account for the purpose of financing emergency telecommunication services.

B. A tax is levied on every public service corporation at the rate of 1.1 per cent of the  public service corporations' gross proceeds of sales or gross income derived from the business of providing exchange access services. Revenues from the tax shall be used for the purpose of financing telecommunication devices for the deaf and the severely hearing and speech impaired under the program established pursuant to section 36-1947. For the purposes of this subsection, "public service corporation" means a public service corporation that offers telephone or telecommunications services pursuant to title 40 and that provides exchange access services.

C. Each provider shall state on the invoice to customers a separate line item stating the amount of tax levied pursuant to subsections A and B of this section.

D. Unless the context otherwise requires, article 1 of this chapter governs the administration of the tax imposed under this section.

E. The tax levied under this section does not apply to prepaid wireless telecommunications service.
A.R.S. § 42-11053 — Arizona Code / Title 42 / Chapter 11 / Article 2 / Section 11053
42-11053 Investigating property valuations
Status: in_force

42-11053. Investigating property valuations

A. The department shall investigate property valuations and any matters relating to property taxes and shall require the production of any private or public record relating to those valuations or property taxes.

B. The director or the director's agent may:

1. Enter on and examine any property in this state to determine its full cash value. If the owner or possessor of property refuses entrance to the director or the director's agent, the director may estimate the valuation of the property.

2. Require any officer whose duties relate to assessing or collecting taxes to report to the director at the time and in the manner that the director prescribes.
A.R.S. § 42-18231 — Arizona Code / Title 42 / Chapter 18 / Article 6 / Section 18231
42-18231 Definition of qualified entity
Status: in_force

42-18231. Definition of qualified entity

For the purposes of this article, "qualified entity" means an association or corporation doing business in this state as a bank pursuant to title 6, chapter 2, credit union pursuant to title 6, chapter 4, consumer lender pursuant to title 6, chapter 5, escrow agent pursuant to title 6, chapter 7, insurance company pursuant to title 20, law firm or special master appointed by the court.
A.R.S. § 42-17001 — Arizona Code / Title 42 / Chapter 17 / Article 1 / Section 17001
42-17001 Definitions
Status: in_force

42-17001. Definitions

In this chapter, unless the context otherwise requires:

1. "Commission" means the property tax oversight commission established by section 42-17002.

2. "Fire district" means a fire district established pursuant to title 48, chapter 5.

3. "Political subdivision" means a county, charter county, city, charter city, town, community college district or school district.
A.R.S. § 42-1122 — Arizona Code / Title 42 / Chapter 1 / Article 3 / Section 1122
42-1122 Setoff for debts to state agencies, political subdivisions and courts; revolving fund; penalties; definitions
Status: in_force

42-1122. Setoff for debts to state agencies, political subdivisions and courts; revolving fund; penalties; definitions

A. The department shall establish a liability setoff program by which refunds under section 42-1118 and title 43, chapters 10 and 11 may be used to satisfy debts that the taxpayer owes to this state, a political subdivision or a court. The program shall comply with the standards and requirements prescribed by this section.

B. If a taxpayer owes an agency, political subdivision or court a debt, the agency, political subdivision or court, by November 1 of each year, may notify the department, furnishing at least the state agency, court or program identifier, the taxpayer's first name, last name, middle initial or middle name and suffix and social security number and any other available identification that the agency, political subdivision or court deems appropriate of the debtor as shown on the records of the agency, political subdivision or court, and the amount of the debt.

C. The department shall match the information submitted by the agency, political subdivision or court by at least two items of identification of the taxpayer with taxpayers who qualify for refunds under section 42-1118 and shall:

1. Notify the agency, political subdivision or court of a potential match, the taxpayer's home address and any additional taxpayer identification numbers used by the taxpayer. Even if the taxpayer is not entitled to a refund, the department of revenue shall provide to:

(a) The court, the clerk of the court and the department of economic security, for child support and spousal maintenance purposes only, the home address of a taxpayer whose debt for overdue support is referred for setoff and any additional taxpayer identification numbers used by the taxpayer.

(b) The court the home address and any additional taxpayer identification numbers used by the taxpayer whose debt for a court obligation is referred for setoff and who is identified by the court as a probationer on absconder status.

2. Request final agency, political subdivision or court confirmation in writing or electronically as determined by the department within ten days after the match and of the continuation of the debt.  If the agency, political subdivision or court fails to provide confirmation within forty-five days after the request, the department shall release the refund to the taxpayer.

D. An agency, political subdivision or court may submit updated information, additions, deletions and other changes on a quarterly or more frequent basis, at the convenience of the agency, political subdivision or court.

E. On confirmation pursuant to subsection C, paragraph 2 of this section, the agency or political subdivision shall notify the taxpayer, by mail to the most recent physical address or electronically to the most recent email address provided by the taxpayer to the department:

1. Of the intention to set off the debt against the refund due.

2. Of the taxpayer's right to appeal to the appropriate court or to request a review by the agency or political subdivision pursuant to agency or political subdivision rule, within thirty days after the physical or electronic mailing of the notice.

F. In addition, the taxpayer shall receive notice that if the refund is intercepted in error through no fault of the taxpayer, the taxpayer is entitled to the full refund plus interest and penalties from the agency, political subdivision or court as provided by subsection O of this section.

G. The basis for a request for review as provided by subsection E of this section shall not include the validity of the claim if its validity has been established at an agency hearing, by judicial review in a court of competent jurisdiction in this or any other state or by final administrative decision and shall state with specificity why the taxpayer claims the obligation does not exist or why the amount of the obligation is incorrect.

H. If, within thirty days after the physical or electronic mailing of the notice, the taxpayer requests a review by the agency or political subdivision or provides the agency or political subdivision with proof that an appeal has been taken to the appropriate court, the agency or political subdivision shall immediately notify the department and the setoff procedure shall be stayed pending resolution of the review or appeal.

I. If the department does not receive notice of a timely appeal, it shall draw and deliver a warrant in the amount of the available refund up to the amount of the debt in favor of the agency or political subdivision and notify the taxpayer of the action by physical mail or email.

J. Subsections E, G, H and I of this section do not apply to a debt imposed by a court except that the taxpayer shall receive notice of the intent to set off the debt against the refund due and the right to appeal to the court that imposed the debt within thirty days after the physical or electronic mailing of the notice.  The basis for the request for review shall not include the validity of the claim and shall state with specificity why the taxpayer claims the obligation does not exist or why the obligation is incorrect.

K. If the setoff accounts for only a portion of the refund due, the remainder of the refund shall be sent to the taxpayer.  A court shall not use this section to satisfy a judgment or payment of a fine or civil penalty until the judgment has become final or until the time to appeal the imposition of a fine or civil penalty has expired.

L. A revolving fund is established to recover and pay the cost of operating the setoff program under this section.  Monies in the fund may also be used for the general operating expenses of the department. The department may prescribe a fee to be collected from each agency, political subdivision or court using the setoff procedure or from the taxpayer, and the amount shall be deposited in the fund. The amount of the fee shall reasonably reflect the actual cost of the service provided. Monies in the revolving fund are subject to legislative appropriation.

M. If agencies, political subdivisions or courts have two or more delinquent accounts for the same taxpayer, the refund may be apportioned among them pursuant to rules prescribed by the department of revenue, except that a setoff to the department of economic security for overdue support has priority over all other setoffs.

N. If the refund is insufficient to satisfy the entire debt, the remainder of the debt may be collected by the agency, political subdivision or court as provided by law or resubmitted for setoff against subsequent refunds.

O. In the case of a refund that is intercepted in error through no fault of the taxpayer under this section, the taxpayer shall be reimbursed by the agency, political subdivision or court with interest pursuant to section 42-1123.  In addition, if all or part of a refund is intercepted in error due to an agency, political subdivision or court incorrectly identifying a taxpayer as a debtor through no fault of the taxpayer, the agency, political subdivision or court shall also pay the taxpayer a penalty as follows:

1. If the agency, political subdivision or court reimburses the taxpayer sixteen through one hundred eighty days after the agency, political subdivision or court receives notification that the refund was erroneously intercepted and the refund was received by the agency, political subdivision or court, the penalty is equal to ten percent of the amount of the refund that was intercepted.

2. If the agency, political subdivision or court reimburses the taxpayer one hundred eighty-one through three hundred sixty-five days after the agency, political subdivision or court receives notification that the refund was erroneously intercepted and the refund was received by the agency, political subdivision or court, the penalty is equal to fifteen percent of the amount of the refund that was intercepted.

3. If the agency, political subdivision or court fails to reimburse the taxpayer within three hundred sixty-five days after the agency, political subdivision or court receives notification that the refund was erroneously intercepted and the refund was received by the agency, political subdivision or court, the penalty is equal to twenty percent of the amount of the refund that was intercepted.

P. The time periods set forth in subsection O of this section shall be stayed during a review of an agency decision pursuant to section 25-522.

Q. Except as is reasonably necessary to accomplish the purposes of this section, the department shall not disclose under this section any information in violation of chapter 2, article 1 of this title.

R. An agency, political subdivision or court shall not enter into an agreement with a debtor for:

1. The assignment of any prospective refund to the agency, political subdivision or court in satisfaction of the debt.

2. Payment of the debt if the debt has been confirmed to the department for setoff under subsection C, paragraph 2 of this section.

S. If a tax refund is based on a joint income tax return and the department of economic security receives a written claim from the nonobligated spouse within forty-five days after the notice of a setoff for overdue child support, the setoff only applies to that portion of the refund due to the obligor. The nonobligated spouse shall provide to the department of economic security copies of both the obligated and nonobligated spouse's federal W-2 forms and evidence of estimated tax payments supporting the proportionate share of each spouse's payment of tax. The department of economic security shall retain the amount of the setoff refund due to the obligated spouse determined by a proration based on the tax payments of each spouse by estimated tax payment or tax withheld from wages.

T. For the purposes of this section:

1. "Agency" means:

(a) A department, agency, board, commission or institution of this state.

(b) A corporation that is under contract with this state and that provides a service that would otherwise be provided by a department, agency, board, commission or institution of this state if the contract specifically authorizes participation in the liability setoff program and the attorney general's office has reviewed the contract and approves such authorization. The participation in the liability setoff program shall be limited to debt related to the services the corporation provides for or on behalf of this state.

2. "Court" means all courts of record, justice courts and municipal courts.

3. "Debt":

(a) Means an amount over $50 that is owed to an agency, political subdivision or court by a taxpayer and may include a judgment in favor of this state or a political subdivision of this state, interest, penalties, charges, costs, fees, fines, civil penalties, surcharges, assessments, administrative charges or any other amount.

(b) Includes monies that are owed by a taxpayer for overdue support and that are referred to the department of economic security or the clerk of the court for collection.

4. "Overdue support" means a delinquency in court ordered payments for spousal maintenance or support of a child or for spousal maintenance to the parent with whom the child is living if child support is also being enforced pursuant to an assignment or application filed under 42 United States Code section 654(6) or other applicable law.

5. "Political subdivision" means a county or an incorporated city or town in this state.
A.R.S. § 42-16259 — Arizona Code / Title 42 / Chapter 16 / Article 6 / Section 16259
42-16259 Transmittal of corrected billing to taxpayer; delinquency; refunds; interest
Status: in_force

42-16259. Transmittal of corrected billing to taxpayer; delinquency; refunds; interest

A. The county treasurer shall mail a corrected billing to the taxpayer on the occurrence of any of the following:

1. The consent of the taxpayer to a tax roll correction.

2. The consent of the tax officer to the notice of claim.

3. The decision of the board of equalization.

4. The final nonappealable ruling by a court of competent jurisdiction.

B. Any taxes that are assessed pursuant to this article are delinquent if not paid within ninety days after the date the corrected billing is mailed to the taxpayer.

C. If taxes have been overpaid, the amount of taxes overpaid shall be refunded with interest at the legal rate set by the department as prescribed by section 42-1123 within ninety days after the tax roll is corrected.  For the purpose of computing interest under this subsection, if the tax was paid in installments, a pro rata share of the total overpayment is considered to be attributable to each installment.
A.R.S. § 42-15065 — Arizona Code / Title 42 / Chapter 15 / Article 2 / Section 15065
42-15065 Assessing personal property construction work in progress; definition
Status: in_force

42-15065. Assessing personal property construction work in progress; definition

A. The county assessor shall not:

1. Value or assess personal property construction work in progress until the construction work has progressed to a sufficient degree for the personal property to be useful for the purpose for which it is being constructed.

2. Place personal property construction work in progress on the roll unless it is valued by the department as provided by law.

B. For purposes of this section, "personal property construction work in progress" means the amount spent and entered on the taxpayer's accounting records as of December 31 of the preceding calendar year as construction work in progress.
A.R.S. § 42-5032.02 — Arizona Code / Title 42 / Chapter 5 / Article 1 / Section 5032.02
42-5032.02 Distribution of revenues for city, town or county infrastructure improvements related to manufacturing facilities; definitions
Status: in_force

42-5032.02. Distribution of revenues for city, town or county infrastructure improvements related to manufacturing facilities; definitions

A. Subject to subsection B of this section, from and after September 30, 2013 through September 30, 2033, the state treasurer shall pay in monthly increments a city, town or county up to the amount determined under subsection C of this section for public infrastructure improvements for the benefit of a manufacturing facility.

B. The state treasurer shall not make any payments under subsection C of this section until both of the following apply:

1. Ten percent of the qualifying capital investment that is certified under subsection D of this section and that constitutes construction phase services, as defined in section 42-5075, has been made by the manufacturing facility.

2. From and after June 30, 2014.

C. The total amount paid to a city, town or county under subsection A of this section shall not exceed the total amount of state transaction privilege tax revenues collected under section 42-5010, subsection A from persons conducting business under section 42-5075 derived from contracts to construct buildings and associated improvements for the benefit of a manufacturing facility or eighty percent of the total cost of the public infrastructure improvements, whichever is less. The total amount paid to all cities, towns and counties under this subsection shall not exceed a maximum of $200,000,000.

D. Within one hundred eighty days after the commencement of the construction of buildings and associated improvements for the benefit of a manufacturing facility that will require a city, town or county to make infrastructure improvements, the manufacturing facility shall file a sworn certification with the Arizona commerce authority and submit a copy of this sworn certification to the applicable city, town or county that the manufacturing facility agrees to either:

1. Make at least $500,000,000 in capital investment if the manufacturing facility is located in a county that has a population of eight hundred thousand persons or more.

2. Make at least $50,000,000 in capital investment if the manufacturing facility is located in a county that has a population of less than eight hundred thousand persons.

E. The certification under subsection D of this section shall contain a sworn statement or certification, signed by an officer of the manufacturing facility under penalty of perjury, that the information contained is true and correct according to the best belief and knowledge of the person submitting the information after a reasonable investigation of the facts.

F. Before submitting the certification to the Arizona commerce authority, the manufacturing facility and the city, town or county must enter into a written agreement that:

1. Identifies and states the cost of the public infrastructure improvements that will be constructed.

2. Identifies the sources of monies, including monies received pursuant to this section, that will be used to pay for the public infrastructure improvements.

G. On receipt of the sworn certification from a manufacturing facility pursuant to subsection D of this section, the city, town or county shall enter into a written agreement with the department. This agreement and any amendments or changes to the agreement shall:

1. State the cost of the public infrastructure improvements and separately identify the particular improvements that will be made.

2. State that the monies received under this section will be used exclusively to pay for public infrastructure improvements that are necessary to support the activities of the manufacturing facility.

3. State that the city, town or county will commit all of its portion of the revenue received pursuant to section 42-5029, subsection D derived from contracts subject to section 42-5075 to construct buildings and associated improvements for the benefit of the manufacturing facility for public infrastructure improvements that benefit the manufacturing facility.

4. State that the city, town or county will immediately notify the department when monies received under this section exceed eighty percent of the cost of the infrastructure improvements and will return the amount of the excess to the state treasurer for deposit in the state general fund.

5. Stipulate the actual amount of the construction funding that will be derived from sources other than this state.

6. Identify the persons who will be prime contractors on the construction of buildings and associated improvements for the benefit of a manufacturing facility and state that each prime contractor has been notified as to which portion of the contractor's income shall be separately identified to the department pursuant to section 42-5075, subsection H.

7. State that the city, town or county agrees that any amounts paid by the department to a prime contractor as identified under paragraph 6 of this subsection resulting from an audit adjustment or claim for credit or refund of taxes described in subsection C of this section shall be recovered by the department from the city, town or county by reducing the amount paid to the city, town or county under section 42-5029 from monies designated as distribution base in the month next succeeding the month in which the adjustment or claim is paid.

8. State that the city, town or county agrees that the department will use the amounts subject to any distribution required under subsection A of this section in calculating the maximum amount set by subsection C of this section.

9. State that the city, town or county agrees that if, on notification by the department, the state treasurer ceases payments because of the condition described in subsection H of this section, the city, town or county has no claim to additional payments if the department subsequently pays amounts to a prime contractor identified in an agreement with any city, town or county, as described in paragraph 6 of this subsection, due to an audit adjustment or claim for credit or refund of taxes described in subsection C of this section.

10. Provide any other information deemed necessary by the department.

H. On notification by the department, the state treasurer shall cease payments under subsection A of this section if either of the following occurs:

1. The city, town or county has received monies that meet or exceed eighty percent of the cost of the public infrastructure improvements that are necessary to support the activities related to the manufacturing facility as described in the written agreement pursuant to subsection G of this section.

2. The total amount subject to any distribution required under subsection A of this section has met the maximum amount set by subsection C of this section.

I. For the purposes of this section:

1. "Associated improvement" includes any public infrastructure improvement that is made for the benefit of the manufacturing facility outside of the parcel or parcels of real property where the manufacturing facility is located.

2. "Capital investment" means an expenditure to acquire, lease or improve property that is used for the benefit of a manufacturing facility, including land, buildings, machinery and fixtures.

3. "Manufacturing facility":

(a) Means an establishment that is engaged in the mechanical, physical or chemical transformation or fabrication of materials, substances or components into new products in this state, that is classified within sections 31 through 33 inclusive of the 2007 edition of the North American industry classification system as published by the national technical information service of the United States department of commerce and that agrees to either:

(i) Make at least $500,000,000 in capital investment if the manufacturing facility is located in a county that has a population of eight hundred thousand persons or more.

(ii) Make at least $50,000,000 in capital investment if the manufacturing facility is located in a county that has a population of less than eight hundred thousand persons.

(b) Does not include mining, milling or smelting mineral ore or generating electricity.

4. "Population" means the population determined in the most recent United States decennial census or the most recent special census as provided in section 28-6532.

5. "Public infrastructure" means water production, delivery and disposal facilities, wastewater production, delivery and disposal facilities and roads that are necessary to support the activities of the manufacturing facility.
A.R.S. § 42-14304 — Arizona Code / Title 42 / Chapter 14 / Article 7 / Section 14304
42-14304 Failure to make annual statement; penalty; action for recovery; false or fraudulent statement; classification
Status: in_force

42-14304. Failure to make annual statement; penalty; action for recovery; false or fraudulent statement; classification

A. If a private car company knowingly fails or refuses to file the statement required by this article, the department shall assess a penalty in the amount of the lesser of:

(a) One-half of one per cent of the value that is estimated by the department.

(b) One hundred dollars per day for each day the company fails to file the statement after April 1.

B. On the request of the director, the attorney general shall institute an action in the name of this state to recover the penalty.

C. If a private car company fails or refuses to make the statement or to furnish the department with the information it requests, the department shall obtain the information in another manner.

D. A person who makes a false or fraudulent statement with the intent to defeat or evade assessment is guilty of a class 2 misdemeanor.
A.R.S. § 42-16002 — Arizona Code / Title 42 / Chapter 16 / Article 1 / Section 16002
42-16002 Changes and corrections in tax roll to reflect determinations on review or appeal
Status: in_force

42-16002. Changes and corrections in tax roll to reflect determinations on review or appeal

A. The county assessor or county treasurer, whichever is appropriate, shall make the necessary changes in the tax roll and records to reflect the determinations that change valuations or classifications of property that result from reviews, administrative or judicial appeals or correction of errors and omissions under this title.

B. If a review or administrative appeal pursuant to article 2, 3 or 4 of this chapter or a judicial appeal pursuant to article 5 of this chapter results in a reduction of the valuation or a change in the classification of property, in the next year the valuation or classification of property shall be the valuation or classification that was determined by the review or appeal unless either:

1. There is new construction, a structural change or a change of use on the property as prescribed by section 42-13302, subsection A, paragraph 2.

2. Chapters 11 through 19 of this title require a specific annual formula for the valuation.

C. This section does not limit the right of a property owner to appeal the valuation or classification of the property.
A.R.S. § 42-14154 — Arizona Code / Title 42 / Chapter 14 / Article 4 / Section 14154
42-14154 Computing valuation of electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property; definitions
Status: in_force

42-14154. Computing valuation of electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property; definitions

A. The valuation of all electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property that is subject to valuation for tax purposes shall be determined in the manner prescribed by this section except for:

1. The property of member-owned nonprofit electric distribution cooperatives.

2. Renewable energy equipment that is valued pursuant to section 42-14155.

B. Electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property shall be valued as follows:

1. The department shall determine the original plant in service cost.

2. The original plant in service cost shall then be reduced by:

(a) The related accumulated provision for depreciation.

(b) The reduction in value caused by a state or federal governmental order prohibiting total or partial physical use of electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property for periods of more than six months.  Any reductions in value caused by a total or partial prohibition of the physical use of the property shall not exceed the cost of the restricted property less accumulated depreciation.

3. The department shall not value contributions in aid of construction.

C. The value of construction work in progress is fifty per cent of the amount spent and entered on the taxpayer's accounting records as of December 31 of the preceding calendar year as construction work in progress.

D. The value of materials and supplies is the total cost of such property as of December 31 of the preceding calendar year.

E. The value of environmental protection facilities that are required by law is fifty per cent of the depreciated cost of the facilities.

F. All terms and applications of terms shall be interpreted according to the federal energy regulatory commission uniform system of accounts for electric and gas utilities in effect on January 1, 1989.

G. For the purposes of this section, unless the context otherwise requires:

1. "Construction work in progress" means the total of the balances of work orders for an electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative plant in process of construction on December 31 of the preceding calendar year, exclusive of land rights and licensed vehicles.

2. "Depreciation" means straight line depreciation over the useful life of the item of property.

3. "Distribution cooperative" means a member-owned nonprofit electric distribution cooperative corporation that is organized under or becomes subject to title 10, chapter 19, article 2 or title 10, chapters 24 through 40.

4. "Electric transmission, electric distribution, gas distribution, combination gas and electric transmission and distribution, and transmission and distribution cooperative property" means plant, construction work in progress, materials and supplies and environmental protection facilities.

5. "Environmental protection facilities" means the acquisition or construction cost of any building, structure, equipment, facility or improvement that is designed and constructed solely to control, reduce, prevent or abate:

(a) Discharges or releases into the environment of gaseous, liquid or solid substances, heat or noise.

(b) Any other adverse impact of an activity on the environment.

6. "Materials and supplies" means the cost, including sales, use and excise taxes, and transportation costs to point of delivery in this state, less purchases and trade discounts, of all unapplied material and supplies on hand in this state as of December 31 of the preceding calendar year.

7. "Original plant in service cost" means the actual cost of acquiring or constructing property including additions, retirements, adjustments and transfers, but without deducting related accumulated provision for depreciation, amortization or other purposes.

8. "Plant" means all property that is situated in this state and that is used or useful for the transmission or distribution of electric power or distribution of natural gas. Plant does not include land rights, materials and supplies and licensed vehicles.

9. "Transmission cooperative" means a member-owned nonprofit electric transmission cooperative corporation that is organized under or becomes subject to title 10, chapter 19, article 4.
A.R.S. § 42-16158 — Arizona Code / Title 42 / Chapter 16 / Article 4 / Section 16158
42-16158 Appeal of valuation or legal classification from department to state board of equalization
Status: in_force

42-16158. Appeal of valuation or legal classification from department to state board of equalization

A. A property owner who is not satisfied with the valuation or legal classification of the property as determined by the department may appeal to the state board by filing a petition with the state board that is postmarked on or before October 1 or within fifteen days after the department mails its decision to the property owner, whichever date is later. The state board shall prescribe the form of and procedure for filing the petition by administrative rule.

B. The state board shall notify the petitioner of the time and place of the hearing. The petitioner:

1. May appear before the state board at such time as the board may direct.

2. Is entitled to be heard at any hearing regarding the valuation or legal classification of the property.

3. Shall show cause why the valuation or legal classification should be changed.

C. If the state board orders the valuation or legal classification to be changed, it shall immediately transmit a copy of the order to the property owner and to the officers of this state and the county, city or town in charge of tax assessments who shall correct the tax roll accordingly.
A.R.S. § 42-2203 — Arizona Code / Title 42 / Chapter 2 / Article 5 / Section 2203
42-2203 Protection from application of joint overpayment against spouse's delinquencies or debts; recovery of protected monies; appeal
Status: in_force

42-2203. Protection from application of joint overpayment against spouse's delinquencies or debts; recovery of protected monies; appeal

A. Notwithstanding section 42-1122, at the time of filing a joint income tax return pursuant to section 43-309, a taxpayer may apply to the department for protection of the taxpayer's share of any overpayment or refund from setoff for the past due state taxes, child support, spousal maintenance or other obligations of the taxpayer's spouse that are ordered by a court or owed to an agency of this state.

B. The department shall receive applications for protection under this section in a form and manner prescribed by the department.

C. If the department grants relief under this section, the amount of the claimant's protected share:

1. Is determined by a proration based on each spouse's estimated tax payments or taxes withheld from wages. For purposes of this proration, estimated payments will be divided evenly between spouses unless it is clearly demonstrated by the taxpayers that a portion of the estimated payments were for income that is not community property.

2. May not exceed the portion of the entire refund or overpayment with respect to the joint return properly allocable to the claimant. The claimant has the burden of proving the portion properly allocable to the claimant.

D. If monies protected under subsection A of this section have already been distributed to an agency or political subdivision, the claimant shall file with the appropriate agency or political subdivision a request for recovery of the protected amount pursuant to section 42-1122.

E. A taxpayer may appeal a determination under this section pursuant to section 42-1251 or 42-1253.
A.R.S. § 42-18114 — Arizona Code / Title 42 / Chapter 18 / Article 3 / Section 18114
42-18114 Successful purchaser
Status: in_force

42-18114. Successful purchaser

A real property tax lien shall be sold pursuant to this article to the person who pays the whole amount of delinquent taxes, interest, penalties and charges due on the property, and who in addition offers to accept the lowest rate of interest on the amount so paid to redeem the property from the sale, which may not exceed the rate prescribed by, and computed pursuant to, section 42-18053.  The lien bears interest at the bid rate from the first day of the month following the purchase of the tax lien.
A.R.S. § 42-6105 — Arizona Code / Title 42 / Chapter 6 / Article 3 / Section 6105
42-6105 County transportation excise tax; counties with population of one million two hundred thousand or more persons
Status: in_force

42-6105. County transportation excise tax; counties with population of one million two hundred thousand or more persons

A. If approved by the qualified electors voting at a countywide election, a county with a population of one million two hundred thousand or more persons shall levy and the department shall collect a tax as provided by this section, in addition to all other taxes.

B. The tax shall be levied and collected:

1. At a rate of not more than ten per cent of the transaction privilege tax rate prescribed by section 42-5010, subsection A applying, as of January 1, 1990, to each person engaging or continuing in the county in a business taxed under chapter 5, article 1 of this title.

2.  At a rate of not more than ten per cent of the rate prescribed by section 42-5352, subsection A.

3. On the use or consumption of electricity or natural gas by retail electric or natural gas customers in the county who are subject to use tax under section 42-5155, at a rate equal to the transaction privilege tax rate under paragraph 1 of this subsection applying to persons engaging or continuing in the county in the utilities transaction privilege tax classification.

C. The tax levied under this section shall be in effect for a term of twenty years.

D. The net revenues collected under this section shall be distributed and deposited as follows for use consistent with the regional transportation plan adopted under title 28, chapter 17, article 1:

1. 56.2 per cent to the regional area road fund pursuant to section 28-6303 for freeways and other routes in the state highway system, including capital expense and maintenance.

2. 10.5 per cent to the regional area road fund pursuant to section 28-6303 for major arterial streets and intersection improvements, including capital expense and implementation studies.

3. 33.3 per cent to the public transportation fund pursuant to section 48-5103 for:

(a) Capital costs, maintenance and operation of public transportation classifications.

(b) Capital costs and utility relocation costs associated with a light rail public transit system.