ARIZONA STATE SENATE
Forty-seventh Legislature, Second Regular Session
FACT SHEET FOR H.B. 2084
sales tax exemption; fire apparatus
Purpose
Exempts the sale of large fire trucks from transaction privilege and use tax.
Background
The transaction privilege tax (TPT) is Arizona’s version of a sales tax. The sales tax consists of many different tax categories, the largest of which is the retail sales tax that comprises half of total sales tax revenues.
According the Joint Legislative Budget Committee (JLBC) fiscal note, there are two types of fire trucks that meet the 17,000 pound exemption requirement, pumper and ladder trucks, that are both used to respond to emergencies and suppress fires. Based on information received from fire truck manufacturers in Arizona, there are between 100 and 150 pumper trucks and between 10 and 50 ladder trucks sold in Arizona annually. Arizona fire truck consultants estimate the cost of a pumper truck to be between $325,000 and $500,000 and the estimated cost for a ladder truck is estimated to be between $675,000 and $1 million.
JLBC estimates the cost to the state General Fund is $2.3 million in FY 2006-2007 and $2.7 million in FY 2007-2008 once it is fully implemented. However, the fiscal note prepared was based on language that exempted sales to a political subdivision. The House engrossed bill includes the sale of all fire trucks used in Arizona; as a result the cost could increase.
Provisions
1. Exempts from the retail classification of TPT and use tax, the sale of fire trucks with a gross weight of at least 17,000 pounds used to respond to fire emergencies and provide support in Arizona.
2. Makes technical changes.
3. Becomes effective on September 1, 2006.
House Action
CMMA 1/17/06 DP 11-0-0-1
WM 1/23/06 DPA 5-3-0-1
3rd Read 3/13/06 60-0-0-0
Prepared by Senate Research
March 28, 2006
SL/HG/jas