Fifty-third Legislature                                                   Finance

Second Regular Session                                                  S.B. 1392

 

PROPOSED AMENDMENT

SENATE AMENDMENTS TO S.B. 1392

(Reference to proposed Farnsworth s/e amendment dated 2/12/2018 ; 4:53 pm)

 


Page 2, line 9, after "42-5061" insert ", 42-5071"

Line 21, after "after" strike remainder of line insert "after "retail" strike remainder of line"

Line 22, after the first comma strike remainder of line insert "strike "prewritten computer software, regardless of delivery method,""

Between lines 23 and 24, insert "Page 32, between lines 28 and 29 insert:

"Sec. 6.  Section 42-5071, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5071.  Personal property rental classification; definitions

A.  The personal property rental classification is comprised of the business of leasing or renting tangible personal property and leasing, renting or licensing for use of prewritten computer software, regardless of delivery method, and specified digital goods for a consideration.  The tax does not apply to:

1.  Leasing or renting films, tapes or slides used by theaters or movies, which are engaged in business under the amusement classification, or used by television stations or radio stations.

2.  Activities engaged in by the Arizona exposition and state fair board or county fair commissions in connection with events sponsored by such entities.

3.  Leasing or renting tangible personal property by a parent corporation to a subsidiary corporation or by a subsidiary corporation to another subsidiary of the same parent corporation if taxes were paid under this chapter on the gross proceeds or gross income accruing from the initial sale of the tangible personal property.  For the purposes of this paragraph, "subsidiary" means a corporation of which at least eighty percent of the voting shares are owned by the parent corporation.

4.  Operating coin‑operated washing, drying and dry cleaning machines or coin‑operated car washing machines at establishments for the use of such machines.

5.  Leasing or renting tangible personal property for incorporation into or comprising any part of a qualified environmental technology facility as described in section 41‑1514.02.  This paragraph shall apply for ten full consecutive calendar or fiscal years following the initial lease or rental by each qualified environmental technology manufacturer, producer or processor.

6.  Leasing or renting aircraft, flight simulators or similar training equipment to students or staff by nonprofit, accredited educational institutions that offer associate or baccalaureate degrees in aviation or aerospace related fields.

7.  Leasing or renting photographs, transparencies or other creative works used by this state on internet websites, in magazines or in other publications that encourage tourism.

8.  Leasing or renting certified ignition interlock devices installed pursuant to the requirements prescribed by section 28‑1461.  For the purposes of this paragraph, "certified ignition interlock device" has the same meaning prescribed in section 28‑1301.

9.  The leasing or renting of space to make attachments to utility poles, as follows:

(a)  By a person that is engaged in business under section 42‑5063 or 42‑5064 or that is a cable operator.

(b)  To a person that is engaged in business under section 42‑5063 or 42‑5064 or that is a cable operator.

10.  Leasing or renting billboards that are designed, intended or used to advertise or inform and that are visible from any street, road or other highway.

B.  The tax base for the personal property rental classification is the gross proceeds of sales or gross income derived from the business, but the gross proceeds of sales or gross income derived from the following shall be deducted from the tax base:

1.  Reimbursements by the lessee to the lessor of a motor vehicle for payments by the lessor of the applicable fees and taxes imposed by sections 28‑2003, 28‑2352, 28‑2402, 28‑2481 and 28‑5801, title 28, chapter 15, article 2 and article IX, section 11, Constitution of Arizona, to the extent such amounts are separately identified as such fees and taxes and are billed to the lessee.

2.  Leases or rentals of tangible personal property that, if it had been purchased instead of leased or rented by the lessee, would have been exempt under:

(a)  Section 42‑5061, subsection A, paragraph 8, 9, 12, 13, 25, 29, 49 or 53.

(b)  Section 42‑5061, subsection B, except that a lease or rental of new machinery or equipment is not exempt pursuant to section 42‑5061, subsection B, paragraph 13 if the lease is for less than two years.

(c)  Section 42‑5061, subsection I, paragraph 1.

(d)  Section 42‑5061, subsection M.

3.  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 and sales of aviation fuel that are subject to the tax imposed under section 28‑8344.

4.  Leasing or renting a motor vehicle subject to and on which the fee has been paid under title 28, chapter 16, article 4.

5.  Amounts received by a motor vehicle dealer for the first month of a lease payment if the lease and the lease payment for the first month of the lease are transferred to a third‑party leasing company.

C.  Sales of tangible personal property to be leased or rented to a person engaged in a business classified under the personal property rental classification are deemed to be resale sales.

D.  In computing the tax base, the gross proceeds of sales or gross income from the lease or rental of a motor vehicle does not include any amount attributable to the car rental surcharge under section 5‑839, 28‑5810 or 48‑4234.

E.  Until December 31, 1988, leasing or renting animals for recreational purposes is exempt from the tax imposed by this section. Beginning January 1, 1989, the gross proceeds or gross income from leasing or renting animals for recreational purposes is subject to taxation under this section.  Tax liabilities, penalties and interest paid for taxable periods before January 1, 1989 shall not be refunded unless the taxpayer requesting the refund provides proof satisfactory to the department that the monies paid as taxes will be returned to the customer.

F.  For the purposes of this section:

1.  "Cable operator" has the same meaning prescribed by section 9‑505.

2.  "Utility pole" means any wooden, metal or other pole used for utility purposes and the pole's appurtenances that are attached or authorized for attachment by the person controlling the pole." END_STATUTE

Renumber to conform"

Page 12, between lines 12 and 13, insert "Line 36, after "privilege" insert "rental, leasing and licensing for use of tangible personal property""

Amend title to conform


 

 

STEVE FARLEY

 

13920441

02/13/2018

04:43 PM

S: FB/lb