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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
TPT; exemption; wastewater; pipes
Purpose
Expands the transaction privilege tax (TPT) deduction and use tax exemption relating to pipes to include pipes or valves that are four inches in diameter or larger that are used to transport wastewater.
Background
TPT is a gross receipts tax levied for the privilege of conducting business in Arizona and is imposed under 16 business classifications. Statute requires businesses to file a TPT return monthly and pay TPT to ADOR by the 20th day of the following month after the tax is incurred (A.R.S. §§ 42-5008 and 42-5014). Use tax is a tax imposed on individuals who purchase taxable products from out-of-state locations or online retailers and as a result, do not pay TPT (ADOR).
The gross proceeds of sales or gross income derived from sales of certain tangible personal property must be deducted from the tax base for the retail classification of TPT, including pipes or valves that are four inches in diameter or larger and are used to transport oil, natural gas, artificial gas, water or coal slurry, including compressor units, regulators, machinery and equipment, fittings, seals and any other part used for operating the pipes or valves (A.R.S. § 42-5061) .
The Joint Legislative Budget Committee estimates that H.B. 2082 would reduce state General Fund revenue by $94,000 annually. Due to data constraints, the estimate is uncertain (JLBC fiscal note).
Provisions
1. Expands the TPT deduction and use tax exemption relating to pipes to include pipes or valves that are four inches in diameter or larger that are used to transport wastewater.
2. Applies the modified deduction and exemption to taxable periods beginning on or after the first day of the month following the general effective date.
3. Becomes effective on the general effective date.
House Action
WM 2/19/25 DP 5-4-0-0
3rd Read 2/26/25 32-27-1
Prepared by Senate Research
March 6, 2025
MG/AL/ci