Assigned to FIN                                                                                                                      FOR COMMITTEE

 

 

 

 


ARIZONA STATE SENATE

Fifty-Seventh Legislature, First Regular Session

 

REVISED

FACT SHEET FOR H.B. 2639

 

TPT; exemption; qualifying equipment; extension

Purpose

Extends the transaction privilege tax (TPT) deduction and use tax exemption for qualifying equipment purchased by a certified healthy forest enterprise until December 31, 2028.

Background

The Healthy Forest Enterprise Incentives Program is statutorily established and administered by the Arizona Commerce Authority (ACA) to encourage local governments to provide incentives for the promotion of forest health. Statute outlines requirements for a business to receive incentives for enhancing or sustaining forest health, sustaining or recovering watershed or improving public safety through the harvesting or processing of qualifying forest products.

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 for sales of qualifying equipment purchased between July 1, 2004, and December 31, 2026, by a certified healthy forest enterprise used directly in harvesting or processing qualifying forest products removed from qualifying projects. Such property is also exempt from use tax. To qualify for the TPT deduction or use tax exemption, the certified healthy forest enterprise must present its certification from the ACA at the time of purchase.

Qualifying equipment includes 1) forest thinning and residue removal equipment that is licensed for operation on public highways; 2) forest residue receiving and handling equipment;
3) sorting and processing equipment; and 4) forest waste and residue disposal and processing equipment (A.R.S. § 41-1516).

The Joint Legislative Budget Committee states that, due to data constraints regarding the current use of the exemption, the fiscal impact cannot be determined, but any impact is expected to be limited (JLBC fiscal note).

Provisions

1.   Extends the TPT deduction and use tax exemption from December 31, 2026, until December 31, 2028, for qualifying equipment purchased by a certified healthy forest enterprise.

2.   Becomes effective on the general effective date.

Revisions

· Updates the fiscal impact statement.


House Action

LARA             2/3/25        DP       5-2-0-2

3rd Read          2/17/25                  37-22-1

Prepared by Senate Research

March 11, 2025

MG/ci