Your letter requests a determination regarding the application of transaction privilege tax on income derived by . . . The following is a restatement of the facts presented in your letter.
Taxpayer is a for profit corporation that provides . . .
Taxpayer recently re-negotiated a contract with . . . to provide vehicles, under vehicle license agreements, for . . Under Taxpayer s previous contract with . . ., Taxpayer paid Arizona transaction privilege tax under the personal property rental classification. The Arizona Department of Revenue audited Taxpayer while paying under that classification. Therefore, Taxpayer is not subject to transaction privilege tax. The state and its political subdivisions are subject to transaction privilege tax when engaged in proprietary functions.