Bill Amendment: AZ HB2111 | 2013 | Fifty-first Legislature 1st Regular
Bill Title: Transaction privilege tax changes
Status: 2013-06-25 - Governor Signed [HB2111 Detail]
Download: Arizona-2013-HB2111-SENATE_PROPOSED_AMENDMENT_Finance.html
Fifty-first Legislature Finance
First Regular Session H.B. 2111
PROPOSED AMENDMENT
SENATE AMENDMENTS TO H.B. 2111
(Reference to proposed amendment dated 3/18/2013; 4:58 p.m.)
Page 1, line 2, after the quotation mark strike remainder of line
Strike lines 3 through 25
Strike page 2
Page 3, strike lines 1 through 15
Renumber to conform
Page 12, between lines 7 and 8, insert:
"Sec. 3. Section 42-1004, Arizona Revised Statutes, is amended to read:
42-1004. General powers and duties of the department; res judicata; remedies; enforcement; special collections account
A. The department shall administer and enforce this title, title 43 and other laws assigned to it and has all the powers and duties prescribed by law for such purposes. In all proceedings prescribed by law the department may act on behalf of this state. In addition, the department shall:
1. Formulate policies, plans and programs to effectuate the missions and purposes of the department.
2. Employ and remove personnel subject to title 41, chapter 4, article 4 and, as applicable, articles 5 and 6, determine the conditions of employment and prescribe the duties and powers of administrative, professional, technical, secretarial, clerical and other personnel as may be necessary in the performance of its duties, and contract for the services of outside advisors, consultants and aides as may be reasonably necessary.
3. Make contracts and incur obligations within the general scope of its activities and operations subject to the availability of its funds.
4. Contract with or assist other departments, agencies or institutions of the state, local, Indian tribal and federal governments in the furtherance of its purposes, objectives and programs.
5. Accept grants, matching funds and direct payments from public or private agencies for the conduct of programs which are consistent with the overall purposes and objectives of the department.
6. Provide information and advice within the scope of its duties subject to the laws on confidentiality of information and departmental rules adopted pursuant to such laws.
7. Advise with and make recommendations to the governor and the legislature on all matters concerning its objectives.
8. Have an official seal which shall be judicially noticed.
9. Provide an integrated, coordinated and uniform system of tax administration and revenue collection for the state, including a coordinated electronic method of collecting state and municipal transaction privilege and affiliated excise taxes.
B. The department may:
1. With the approval of the attorney general:
(a) Abate any balance owed by a taxpayer if the balance is uncollectible. Related liens, if any, are extinguished on abatement.
(b) Abate all or part of the unpaid portion of any tax if the director determines that the administration and collection costs involved would exceed the amount of the tax.
2. Offer publications relating to the administration of state taxes for sale at a price equal to the pro rata cost of publication and distribution. Monies received from the sale of publications shall be placed in a revenue publications revolving fund. Monies in the fund:
(a) Shall be used to meet publication and distribution expenses.
(b) Are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.
3. Enter into contingent fee contracts to collect delinquent state taxes, penalties, interest and other amounts owed to the department under title 43 and chapter 5, article 1 of this title, consistent with the requirements of chapter 2, article 1 of this title. No contract may be entered into for the hiring of auditors on a contingent fee basis except auditors that are hired to enforce title 44, chapter 3.
C. In the determination of any issue of law or fact under this title or title 43, neither the department, nor any officer or agency having any administrative duties under this title or title 43, nor any court is bound by the determination of any other executive officer or administrative agency of this state. In the determination of any case arising under this title or title 43, the rule of res judicata is applicable only if the liability involved is for the same year or period as was involved in another case previously determined under this title or title 43.
D. The remedies of this state provided for in this title and title 43 are cumulative, and no action taken by the department constitutes an election by this state to pursue any remedy to the exclusion of any other remedy provided by law.
E. The attorney general shall prosecute in the name of this state all actions necessary to enforce this title and title 43. The attorney general may defend all actions brought against this state or an officer or agency of this state arising under this title and title 43. The attorney general may delegate the prosecuting authority to any county attorney for prosecution in that county.
F. A special collections account is established in the state general fund. All monies collected pursuant to contracts authorized by subsection B, paragraph 3 of this section shall be deposited in the special collections account. The department shall pay from the account all fees and court costs provided for in the contracts authorized under subsection B, paragraph 3 of this section. The department shall allocate the remainder of the amounts collected under subsection B, paragraph 3 of this section to the state or the political subdivision in the proportion that the monies would have been distributed pursuant to chapter 5 of this title or section 43‑206, respectively."
Renumber to conform
Page 22, strike lines 8, 9 and 10, insert:
"4. For the purposes of the deduction provided by section 42‑5061, subsection A, paragraph 14, a certificate documenting the delivery of the motor vehicle to an out‑of‑state location."
Strike lines 26, 27 and 28, insert:
"J. Notwithstanding any other law, compliance with subsection H of this section by a motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in section 42‑6004, subsection A, paragraph 4.
K. The department shall prescribe a form for a certificate to be used to establish entitlement to the deduction described in section 42‑5061, subsection A, paragraph 27, subdivision (b) relating to highway, street and bridge construction. A highway, street or bridge contractor shall obtain a new certificate for each project and is subject to the following requirements and conditions:
1. A highway, street or bridge contractor may use a certificate issued pursuant to this subsection only with respect to materials that will be incorporated into a highway, street or bridge.
2. The department shall issue the certificate to a highway, street or bridge contractor on receiving sufficient documentation to establish that the highway, street or bridge contractor meets the requirements of this subsection.
3. The department shall not issue a certificate to a highway, street or bridge contractor that has a delinquent tax balance owing to the department under this title or title 43.
4. If the department determines that a highway, street or bridge contractor has failed to meet any of the requirements prescribed by this subsection, any deductions from taxation from the use of the certificate are subject to recapture and payment by the highway, street or bridge contractor."
Page 23, between lines 16 and 17, insert:
"(m) Highway, street and bridge construction classification."
Line 30, after (h) insert "and (m)"
Page 25, strike lines 1 through 10, insert:
"H. Any increase in the rate of tax that is imposed by this chapter and that is enacted by the legislature or by a vote of the people does not apply with respect to contracts entered into by prime highway, street or bridge contractors or pursuant to written bids made by prime highway, street or bridge contractors on or before the effective date of the legislation or the date of the election enacting the increase. To qualify for the exemption under this subsection, the prime highway, street or bridge contractor must maintain sufficient documentation, in a manner and form prescribed by the department, to verify the date of the contract or written bid.
I. For taxpayers taxable under this chapter other than prime highway, street or bridge contractors taxable pursuant to section 42‑5075 42-5078:"
Reletter to conform
Page 41, strike lines 30, 31 and 32, insert:
"14. Sales of motor vehicles to nonresidents of this state for use outside this state if the vendor motor vehicle dealer ships or delivers the tangible personal property motor vehicle to a destination out of this state."
Renumber to conform
Page 44, strike lines 9 through 17, insert:
"under the prime contracting manufactured building dealer classification under section 42‑5075, or the highway, street and bridge construction classification under section 42-5078 or to a subcontractor working under the control of a prime highway, street or bridge contractor that is subject to tax under article 1 of this chapter, if the property so sold is any of the following:
(a) to be incorporated or fabricated by the person into a manufactured building. any real property, structure, project, development or improvement as part of the business.
(b) Used in environmental response or remediation activities under section 42‑5075, subsection B, paragraph 6.
(b) To be incorporated or fabricated by the person into a highway, street or bridge."
Page 49, strike lines 4, 5 and 6, insert:
"52. 51. Sales of tangible personal property to be incorporated or installed as part of environmental response or remediation activities under section 42‑5075, subsection B, paragraph 6 site preparation, constructing, furnishing or installing machinery, equipment or other tangible personal property, including structures necessary to protect exempt incorporated materials or installed machinery or equipment, and tangible personal property incorporated, to perform one or more of the following actions in response to a release or suspected release of a hazardous substance, pollutant or contaminant from a facility to the environment, unless the release was authorized by a permit issued by a governmental authority:
(a) Actions to monitor, assess and evaluate such a release or a suspected release.
(b) Excavation, removal and transportation of contaminated soil and its treatment or disposal.
(c) Treatment of contaminated soil by vapor extraction, chemical or physical stabilization, soil washing or biological treatment to reduce the concentration, toxicity or mobility of a contaminant.
(d) Pumping and treatment or in situ treatment of contaminated groundwater or surface water to reduce the concentration or toxicity or a contaminant.
(e) The installation of structures, such as cutoff walls or caps, to contain contaminants present in groundwater or soil and prevent them from reaching a location where they could threaten human health or welfare or the environment.
This paragraph does not include asbestos removal or the construction or use of ancillary structures such as maintenance sheds, offices or storage facilities for unattached equipment, pollution control equipment, facilities or other control items required or to be used by a person to prevent or control contamination before it reaches the environment."
Renumber to conform
Page 50, between lines 7 and 8, insert:
"58. Tangible personal property sold to a qualified business under section 41-1516 if the property sold is to be incorporated or fabricated into a building, or other structure, project, development or improvement owned by the qualified business for harvesting or processing qualifying forest products. To qualify for this deduction, the qualified business at the time of purchase must present its certification approved by the department."
Line 18, after the period strike remainder of line
Strike line 19
Page 56, between lines 5 and 6, insert:
"8. Machinery and equipment or other tangible personal property used by a contractor in the performance of a contract."
Page 64, line 1, strike "25, 29" insert "25, 29"
Line 2, after "48" insert ", 49"; strike "52" insert "54"
Page 65, line 14, strike "27 26" insert "27, subdivision (b)"
Page 82, between lines 2 and 3, insert:
"Sec. 19. Title 42, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 42-5078, to read:
42-5078. Highway, street and bridge construction classification; definitions
A. The highway, street and bridge construction classification is comprised of the business of constructing a highway, street or bridge.
B. The tax base for the highway, street and bridge construction classification is sixty-five per cent of the gross proceeds of sales or gross income derived from the business. The following amounts shall be deducted from the gross proceeds of sales or gross income before computing the tax base:
1. The gross proceeds of sales or gross income received from a contract entered into for the construction, alteration or repair of any highway, street or bridge located within an active military reuse zone after the zone is initially established or renewed under section 41-1531. To be eligible to qualify for this deduction, before beginning work under the contract, the highway, street or bridge contractor must have applied for a letter of qualification from the department of revenue.
2. The gross proceeds of sales or gross income attributable to a separate, written design phase services or professional services contract, executed before the construction, alteration or repair of a highway, street or bridge begins, regardless of whether the services are provided sequential to or concurrent with construction activities subject to tax under this section. This deduction does not include the gross proceeds of sales or the gross income attributable to construction phase services.
3. The portion of gross proceeds of sales or gross income attributable to the actual direct costs of providing architectural or engineering services that are incorporated in a contract is not subject to tax under this section. For the purposes of this paragraph, "direct costs" means the portion of the actual costs that are directly expended in providing architectural or engineering services.
C. Subcontractors who perform services with respect to the construction, alteration or repair of a highway, street or bridge are not subject to tax if they can demonstrate that the job was within the control of a highway, street or bridge contractor and that the highway, street, or bridge contractor is liable for the tax on the gross income, gross proceeds of sales or gross receipts attributable to the job and from which the subcontractors were paid.
D. For the purposes of this section:
1. "Construction phase services" means services for the execution and completion of any construction, alteration or repair of a highway, street or bridge, including the following:
(a) Administration or supervision of any construction, alteration or repair of a highway, street or bridge, including team management and coordination, scheduling, cost controls, submittal process management, field management, safety program, close-out process and warranty period services.
(b) Administration or supervision of any punch list. For the purposes of this subdivision, "punch list" means minor items of work performed after substantial completion and before final completion of the project.
(c) Administration or supervision of any work performed pursuant to change orders. For the purposes of this subdivision, "change order" means a written instrument issued after execution of a contract for the construction of a highway, street or bridge, providing for all of the following:
(i) The scope of change in the work.
(ii) The amount of an adjustment, if any, to the guaranteed maximum price as set in the contract for construction of the highway, street or bridge. For the purposes of this item, "guaranteed maximum price" means the amount guaranteed to be the maximum amount due to a highway, street or bridge contractor for the performance of the construction, alteration or repair of a highway, street or bridge.
(iii) The extent of an adjustment, if any, to the contract time of performance set forth in the contract.
(d) Administration or supervision of any construction, alteration or repair work performed pursuant to change directives. For the purposes of this subdivision, "change directive" means a written order directing a change in construction, alteration or repair work before agreement on an adjustment of the guaranteed maximum price or contract time.
(e) Inspection to determine the dates of substantial completion or final completion.
(f) Preparation of any manuals, warranties, as‑built drawings, spares or other items the highway, street or bridge construction contractor must furnish pursuant to a contract for the construction, alteration or repair of a highway, street or bridge. For the purposes of this subdivision, "as‑built drawing" means a drawing that indicates field changes made to adapt to field conditions, field changes resulting from change orders or buried and concealed installation of piping, conduit and utility services.
(g) Preparation of status reports after the construction, alteration or repair work has begun detailing the progress of work performed, including preparation of any of the following:
(i) Master schedule updates.
(ii) Construction, alteration or repair cash flow projection dates.
(iii) Site reports made on a periodic basis.
(iv) Identification of discrepancies, conflicts or ambiguities in construction, alteration or repair work documents that require resolution.
(v) Identification of any health and safety issues that have arisen in connection with the construction, alteration or repair work.
(h) Preparation of daily logs of construction, alteration or repair work, including documentation of personnel, weather conditions and on-site occurrences.
(i) Preparation of any submittals or shop drawings used by the highway, street and bridge construction contractor to illustrate details of the construction, alteration or repair work.
(j) Administration or supervision of any other activities for which a highway, street or bridge construction contractor receives a certificate of payment or certificate for final payment based on the progress of construction, alteration or repair work performed on the project.
2. "Design phase services" means services for developing and completing a design for a project that are not construction phase services, including the following:
(a) Evaluating surveys, reports, test results or any other information on site conditions for the project, including physical characteristics, legal limitations and utility locations for the site.
(b) Evaluating any criteria or programming objectives for the project to ascertain requirements for the project, such as physical requirements affecting cost or projected utilization of the project.
(c) Preparing drawings and specifications for architectural program documents, schematic design documents, design development documents, construction, alteration or repair documents or documents that identify the scope of or materials for the project.
(d) Preparing an initial schedule for the project, excluding the preparation of updates to the master schedule after construction, alteration or repair work has begun.
(e) Preparing preliminary estimates of costs of construction, alteration or repair work before completion of the final design of the project, including an estimate or schedule of values for any of the following:
(i) Labor, materials, machinery and equipment, tools, water, heat, utilities, transportation and other facilities and services used in the execution and completion of construction, alteration or repair work, regardless of whether they are temporary or permanent or whether they are incorporated in the construction, alteration or repair.
(ii) The cost of labor and materials to be furnished by the owner of the property.
(iii) Any fee paid by the owner of the real property to the highway, street or bridge construction contractor pursuant to the contract for construction, alteration or repair work.
(iv) Any bond and insurance premiums.
(v) Any applicable taxes.
(vi) Any contingency fees for the highway, street or bridge construction contractor that may be used before final completion of the project.
(f) Reviewing and evaluating cost estimates and project documents to prepare recommendations on site use, site improvements, selection of materials, building systems and equipment, construction, alteration or repair feasibility, availability of materials and labor, local construction, alteration or repair activity as related to schedules and time requirements for construction, alteration or repair work.
(g) Preparing the plan and procedures for selection of subcontractors, including any prequalifications of subcontractor candidates.
3. "Highway, street or bridge contractor" means a contractor who holds a classification a license from the registrar of contractors and who supervises, performs or coordinates the construction, alteration or repair of a highway, street or bridge, including the contracting, if any, with any subcontractors.
4. "Professional services" means architect services, assayer services, engineer services, geologist services, land surveying services or landscape architect services that are within the scope of those services as provided in title 32, chapter 1 and for which gross proceeds of sales or gross income has not otherwise been deducted under subsection b, paragraph 3 of this section."
Renumber to conform
Page 90, strike lines 18 through 25, insert:
"manufactured building dealer classification under section 42‑5075, or the highway, street and bridge construction classification under section 42‑5078 or a subcontractor working under the control of a prime highway, street or bridge contractor, if the tangible personal property is any either of the following:
(i) to be incorporated or fabricated by the contractor into a manufactured building. structure, project, development or improvement in fulfillment of a contract.
(ii) Used in environmental response or remediation activities under section 42‑5075, subsection B, paragraph 6.
(ii) To be incorporated or fabricated by the person into a highway, street or bridge."
Page 97, strike lines 1, 2 and 3, insert:
"47. Tangible personal property purchased to be incorporated or installed as part of environmental response or remediation activities under section 42‑5075, subsection B, paragraph 6 Site preparation, constructing, furnishing or installing machinery, equipment or other tangible personal property, including structures necessary to protect exempt incorporated materials or installed machinery or equipment, and tangible personal property incorporated, to perform one or more of the following actions in response to a release or suspected release of a hazardous substance, pollutant or contaminant from a facility to the environment, unless the release was authorized by a permit issued by a governmental authority:
(a) Actions to monitor, assess and evaluate such a release or a suspected release.
(b) Excavation, removal and transportation of contaminated soil and its treatment or disposal.
(c) Treatment of contaminated soil by vapor extraction, chemical or physical stabilization, soil washing or biological treatment to reduce the concentration, toxicity or mobility of a contaminant.
(d) Pumping and treatment or in situ treatment of contaminated groundwater or surface water to reduce the concentration or toxicity or a contaminant.
(e) The installation of structures, such as cutoff walls or caps, to contain contaminants present in groundwater or soil and prevent them from reaching a location where they could threaten human health or welfare or the environment.
This paragraph does not include asbestos removal or the construction or use of ancillary structures such as maintenance sheds, offices or storage facilities for unattached equipment, pollution control equipment, facilities or other control items required or to be used by a person to prevent or control contamination before it reaches the environment."
Renumber to conform
Page 98, line 15, after the period strike remainder of line
Strike line 16
Page 103, between lines 27 and 28, insert:
"8. Machinery and equipment or tangible personal property used by a contractor in the performance of a contract."
Page 107, between lines 2 and 3, insert:
"C. The governing body of an incorporated city or town and the department may enter into an agreement whereby:
1. The department will furnish part-time or full-time personnel to perform audit services within the boundaries of the city or town, as provided in the agreement.
2. The incorporated city or town that contracts for services pursuant to this section will pay to the department the amount agreed to be paid for these services."
Page 111, line 17, after the period strike remainder of line
Strike lines 18 through 30, insert:
"7. Sales of tangible personal property to a person that is subject to tax by reason of being engaged in business classified under the highway, street and bridge construction classification under section 42-6020, or to a subcontractor working under the control of a highway, street or bridge contractor that is subject to tax under section 42-6020, if the property sold is to be incorporated or fabricated by the person into a highway, street or bridge."
Page 112, between lines 14 and 15, insert:
"Sec. 27. Section 42-6005, Arizona Revised Statutes, is amended to read:
42-6005. Unified audit committee; audits
A. The director shall establish a unified audit committee with cities and towns. The committee shall coordinate uniform audit functions. The committee shall publish uniform guidelines that interpret the model city tax code and that apply to all cities and towns that have adopted the model city tax code.
B. If the department intends to conduct an audit of a taxpayer, the department shall notify the cities or towns in which the taxpayer conducts business. A city or town may accept the audit as a joint audit and may elect to have a representative participate in the audit provided that no more than two city or town representatives in total may participate. If a city or town does not accept the audit as a joint audit, the city or town may not conduct an audit of the taxpayer for forty‑two months from the close of the last tax period covered by the audit unless an exception applies to that taxpayer pursuant to section 42‑2059. An audit conducted by a city or town serves as a joint audit for all cities and towns that have taxing jurisdiction.
C. A taxpayer that conducts business in more than one jurisdiction may allow a joint is subject to a single audit for all taxing jurisdictions. A taxpayer that does not allow a joint audit for all taxing jurisdictions is subject to an audit by another jurisdiction at any time. If a joint audit is performed by a city or town, this section shall not be construed to prohibit the department from conducting any audit that does not violate the provisions of section 42‑2059.
D. When the state statutes and model city tax code are the same and where the department has issued written guidance, the department's interpretation is binding on cities and towns.
Sec. 28. Title 42, chapter 6, Arizona Revised Statutes, is amended by adding article 1.1, to read:
ARTICLE 1.1. MUNICIPAL CONTRACTING EXCISE TAX
42-6020. Highway, street and bridge construction; definitions
A. The highway, street and bridge construction classification is comprised of the business of constructing a highway, street or bridge.
B. The tax base for the highway, street and bridge construction classification is sixty-five per cent of the gross proceeds of sales or gross income derived from the business. The following amounts shall be deducted from the gross proceeds of sales or gross income before computing the tax base:
1. The gross proceeds of sales or gross income received from a contract entered into for the construction, alteration, or repair of any highway, street or bridge located within an active military reuse zone after the zone is initially established or renewed under section 41-1531. To be eligible to qualify for this deduction, before beginning work under the contract, the highway, street or bridge contractor must have applied for a letter of qualification from the department of revenue.
2. The gross proceeds of sales or gross income attributable to a separate, written design phase services or professional services contract, executed before the construction, alteration or repair of a highway, street or bridge begins, regardless of whether the services are provided sequential to or concurrent with construction activities subject to tax under this section. This deduction does not include the gross proceeds of sales or the gross income attributable to construction phase services.
3. The portion of gross proceeds of sales or gross income attributable to the actual direct costs of providing architectural or engineering services that are incorporated in a contract is not subject to tax under this section. For the purposes of this paragraph, "direct costs" means the portion of the actual costs that are directly expended in providing architectural or engineering services.
C. Subcontractors who perform services with respect to the construction, alteration or repair of a highway, street or bridge are not subject to tax if they can demonstrate that the job was within the control of a highway, street or bridge contractor and that the highway, street, or bridge contractor is liable for the tax on the gross income, gross proceeds of sales or gross receipts attributable to the job and from which the subcontractors were paid.
D. For the purposes of this section:
1. "Construction phase services" means services for the execution and completion of any construction, alteration or repair of a highway, street or bridge, including the following:
(a) Administration or supervision of any construction, alteration or repair of a highway, street or bridge, including team management and coordination, scheduling, cost controls, submittal process management, field management, safety program, close-out process and warranty period services.
(b) Administration or supervision of any punch list. For the purposes of this subdivision, "punch list" means minor items of work performed after substantial completion and before final completion of the project.
(c) Administration or supervision of any work performed pursuant to change orders. For the purposes of this subdivision, "change order" means a written instrument issued after execution of a contract for the construction of a highway, street or bridge, providing for all of the following:
(i) The scope of change in the work.
(ii) The amount of an adjustment, if any, to the guaranteed maximum price as set in the contract for construction of the highway, street or bridge. For purposes of this item, "guaranteed maximum price" means the amount guaranteed to be the maximum amount due to highway, street or bridge contractor for the performance of the construction, alteration or repair of a highway, street or bridge.
(iii) The extent of an adjustment, if any to the contract time of performance set forth in the contract.
(d) Administration or supervision of any construction, alteration or repair work performed pursuant to change directives. For the purposes of this subsection, "change directive" means a written order directing a change in construction, alteration or repair work before agreement on an adjustment of the guaranteed maximum price or contract time.
(e) Inspection to determine the dates of substantial completion or final completion.
(f) Preparation of any manuals, warranties, as‑built drawings, spares or other items the highway, street or bridge construction contractor must furnish pursuant to a contract for the construction, alteration or repair of a highway, street or bridge. For purposes of this subdivision, "as‑built drawing" means a drawing that indicates field changes made to adapt to field conditions, field changes resulting from change orders or buried and concealed installation of piping, conduit and utility services.
(g) Preparation of status reports after the construction, alteration or repair work has begun detailing the progress of work performed, including preparation of any of the following:
(i) Master schedule updates.
(ii) Construction, alteration or repair cash flow projection dates.
(iii) Site reports made on a periodic basis.
(iv) Identification of discrepancies, conflicts or ambiguities in construction, alteration or repair work documents that require resolution.
(v) Identification of any health and safety issues that have arisen in connection with the construction, alteration or repair work.
(h) Preparation of daily logs of construction, alteration or repair work, including documentation of personnel, weather conditions and on-site OCCURRENCES.
(i) Preparation of any submittals or shop drawings used by the highway, street and bridge construction contractor to illustrate details of the construction, alteration or repair work.
(j) Administration or supervision of any other activities for which a highway, street or bridge construction contractor receives a certificate of payment or certificate for final payment based on the progress of construction, alteration or repair work performed on the project.
2. "design phase services" means services for developing and completing a design for a project that are not construction phase services, including the following:
(a) Evaluating surveys, reports, test results or any other information on site conditions for the project, including physical characteristics, legal limitations and utility locations for the site.
(b) Evaluating any criteria or programming objectives for the project to ascertain requirements for the project, such as physical requirements affecting cost or projected utilization of the project.
(c) Preparing drawings and specifications for architectural program documents, schematic design documents, design development documents, construction, alteration or repair documents or documents that identify the scope of or materials for the project.
(d) Preparing an initial schedule for the project, excluding the preparation of updates to the master schedule after construction, alteration or repair work has begun.
(e) Preparing preliminary estimates of costs of construction, alteration or repair work before completion of the final design of the project, including an estimate or schedule of values for any of the following:
(i) Labor, materials, machinery and equipment, tools, water, heat, utilities, transportation and other facilities and services used in the execution and completion of construction, alteration or repair work, regardless of whether they are temporary or permanent or whether they are incorporated in the construction, alteration or repair.
(ii) The cost of labor and materials to be furnished by the owner of the property.
(iii) Any fee paid by the owner of the real property to the highway, street or bridge construction contractor pursuant to the contract for construction, alteration or repair work.
(iv) Any bond and insurance premiums.
(v) Any applicable taxes.
(vi) Any contingency fees for the highway, street or bridge construction contractor that may be used before final completion of the project.
(f) Reviewing and evaluating cost estimates and project documents to prepare recommendations on site use, site improvements, selection of materials, building systems and equipment, construction, alteration or repair feasibility, availability of materials and labor, local construction, alteration or repair activity as related to schedules and time requirements for construction, alteration or repair work.
(g) Preparing the plan and procedures for selection of subcontractors, including any prequalifications of subcontractor candidates.
3. "Highway, street or bridge contractor" means a contractor who holds a classification A license from the registrar of contractors and who supervises, performs or coordinates the construction, alteration or repair of a highway, street or bridge, including the contracting, if any, with any subcontractors.
4. "Professional services" means architect services, assayer services, engineer services, geologist services, land surveying services or landscape architect services that are within the scope of those services as provided in title 32, chapter 1 and for which gross proceeds of sales or gross income has not otherwise been deducted under subsection B, paragraph 3 of this section.END_STATUTE
42-6021. Residential and commercial contracting classification; definitions
A. The residential and commercial contracting classification is comprised of the business of residential and commercial contracting.
B. The tax base for the residential and commercial contracting classification is sixty-five per cent of the gross proceeds of sales or gross income derived from the business. The following amounts shall be deducted from the gross proceeds of sales or gross income before computing the tax base:
1. The sales price of land, which shall not exceed the fair market value.
2. Sales and installation of groundwater measuring devices required under section 45-604 and groundwater monitoring wells required by law, including monitoring wells installed for acquiring information for a permit required by law.
3. The gross proceeds of sales or gross income received from a contract entered into for the construction, alteration, repair, addition, subtraction, improvement, movement, wrecking or demolition of any building, railroad, excavation, or other structure, project, development or improvement located in a military reuse zone for providing aviation or aerospace services or for a manufacturer, assembler or fabricator of aviation or aerospace products within an active military reuse zone after the zone is initially established or renewed under section 41-1531. To be eligible to qualify for this deduction, before beginning work under the contract, the prime contractor must have applied for a letter of qualification from the department of revenue.
4. The gross proceeds of sales or gross income derived from a contract to construct a qualified environmental technology manufacturing, producing or processing facility, as described in section 41-1514.02, and from subsequent construction and installation contracts that begin within ten years after the start of initial construction. To qualify for this deduction, before beginning work under the contract, the contractor must obtain a letter of qualification from the department of revenue. This paragraph shall apply for ten full consecutive calendar or fiscal years after the start of initial construction.
5. The gross proceeds of sales or gross income from a contract to provide for one or more of the following actions, or a contract for site preparation, constructing, furnishing or installing machinery, equipment or other tangible personal property, including structures necessary to protect exempt incorporated materials or installed machinery or equipment, and tangible personal property incorporated into the project, to perform one or more of the following actions in response to a release or suspected release of a hazardous substance, pollutant or contaminant from a facility to the environment, unless the release was authorized by a permit issued by a governmental authority:
(a) Actions to monitor, assess and evaluate such a release or a suspected release.
(b) Excavation, removal and transportation of contaminated soil and its treatment or disposal.
(c) Treatment of contaminated soil by vapor extraction, chemical or physical stabilization, soil washing or biological treatment to reduce the concentration, toxicity or mobility of a contaminant.
(d) Pumping and treatment or in situ treatment of contaminated groundwater or surface water to reduce the concentration or toxicity of a contaminant.
(e) The installation of structures, such as cutoff walls or caps, to contain contaminants present in groundwater or soil and prevent them from reaching a location where they could threaten human health or welfare or the environment.
This paragraph does not include asbestos removal or the construction or use of ancillary structures such as maintenance sheds, offices or storage facilities for unattached equipment, pollution control equipment, facilities or other control items required or to be used by a person to prevent or control contamination before it reaches the environment.
6. The gross proceeds of sales or gross income that is derived from a contract entered into for the installation, assembly, repair or maintenance of machinery, equipment or other tangible personal property that is deducted from the tax base of the retail classification pursuant to section 42-5061, subsection B, or that is exempt from use tax pursuant to section 42-5159, subsection B, and that does not become a permanent attachment to a building, highway, road, railroad, excavation or manufactured building or other structure, project, development or improvement. If the ownership of the realty is separate from the ownership of the machinery, equipment or tangible personal property, the determination as to permanent attachment shall be made as if the ownership were the same. The deduction provided in this paragraph does not include gross proceeds of sales or gross income from that portion of any contracting activity that consists of the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property that is deducted from the tax base of the retail classification pursuant to section 42-5061, subsection B or that is exempt from use tax pursuant to section 42-5159, subsection B. For the purposes of this paragraph, "permanent attachment" means at least one of the following:
(a) To be incorporated into real property.
(b) To become so affixed to real property that it becomes a part of the real property.
(c) To be so attached to real property that removal would cause substantial damage to the real property from which it is removed.
7. The gross proceeds of sales or gross income attributable to the purchase of machinery, equipment or other tangible personal property that is exempt from or deductible from transaction privilege and use tax under:
(a) Section 42-5061, subsection A, paragraph 25 or 29.
(b) Section 42-5061, subsection B.
(c) Section 42-5159, subsection a, paragraph 13, subdivision (a), (b), (c), (d), (e), (f), (i), (j) or (l).
(d) Section 42-5159, subsection B.
8. The gross proceeds of sales or gross income received from a contract for the construction of an environmentally controlled facility for the raising of poultry for the production of eggs and the sorting, cooling and packaging of eggs.
9. The gross proceeds of sales or gross income that is derived from a contract entered into with a person who is engaged in the commercial production of livestock, livestock products or agricultural, horticultural, viticultural or floricultural crops or products in this state for the construction, alteration, repair, improvement, movement, wrecking or demolition or addition to or subtraction from any building, highway, road, excavation, manufactured building or other structure, project, development or improvement used directly and primarily to prevent, monitor, control or reduce air, water or land pollution.
10. The gross proceeds of sales or gross income derived from the installation, assembly, repair or maintenance of clean rooms that are deducted from the tax base of the retail classification pursuant to section 42-5061, subsection b, paragraph 16.
11. The gross proceeds of sales or gross income derived from a contract entered into for the construction of a residential apartment housing facility that qualifies for a federal housing subsidy for low income persons over sixty-two years of age and that is owned by a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code.
12. For taxable periods beginning from and after December 31, 1996 and ending before January 1, 2017, the gross proceeds of sales or gross income derived from a contract to provide and install a solar energy device. The contractor shall register with the department as a solar energy contractor. By registering, the contractor acknowledges that it will make its books and records relating to sales of solar energy devices available to the department for examination.
13. The gross proceeds of sales or gross income derived from a contract entered into for the construction of a launch site, as defined in 14 code of federal regulations section 401.5.
14. The gross proceeds of sales or gross income derived from a contract entered into for the construction of a domestic violence shelter that is owned and operated by a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code.
15. The gross proceeds of sales or gross income derived from contracts to perform postconstruction treatment of real property for termite and general pest control, including wood‑destroying organisms.
16. The gross proceeds of sales or gross income received from contracts entered into before July 1, 2006 for constructing a state university research infrastructure project if the project has been reviewed by the joint committee on capital review before the university enters into the construction contract for the project. For the purposes of this paragraph, "research infrastructure" has the same meaning prescribed in section 15-1670.
17. The gross proceeds of sales or gross income received from a contract for the construction of any building, railroad or other structure, project, development or improvement owned by a qualified business under section 41-1516 for harvesting or processing qualifying forest products removed from qualifying projects as defined in section 41-1516 if actual construction begins before January 1, 2024. To qualify for this deduction, the residential or commercial contractor must obtain a letter of qualification from the Arizona commerce authority before beginning work under the contract.
18. Any amount of the gross proceeds of sales or gross income attributable to development fees that are incurred in relation to a contract for construction, development or improvement of real property and that are paid by a residential or commercial contractor or subcontractor. For the purposes of this paragraph:
(a) The attributable amount shall not exceed the value of the development fees actually imposed.
(b) The attributable amount is equal to the total amount of development fees paid by the residential or commercial contractor or subcontractor, and the total development fees credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development. The real property must be the subject of the development fees.
(c) "Development fees" means fees imposed to offset capital costs of providing public infrastructure, public safety or other public services to a development and authorized pursuant to section 9-463.05, section 11-1102 or title 48 regardless of the jurisdiction to which the fees are paid.
C. Entitlement to the deduction pursuant to subsection b, paragraph 6 of this section is subject to the following provisions:
1. A residential or commercial contractor may establish entitlement to the deduction by both:
(a) Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the base.
(b) obtaining a certificate executed by the customer indicating the name and address of the customer, the precise nature of the business of the customer, the purpose for which the purchase was made, the necessary facts to establish the deductibility of the property under section 42-5061, subsection b, and a certification that the person executing the certificate is authorized to do so on behalf of the purchaser. The certificate may be disregarded if the residential or commercial contractor has reason to believe that the information contained in the certificate is not accurate or complete.
2. A person who does not comply with paragraph 1 of this subsection may establish entitlement to the deduction by presenting facts necessary to support the entitlement, but the burden of proof is on that person.
3. The department may prescribe a form for the certificate described in paragraph 1, subdivision (b) of this subsection. The department may also adopt rules that describe the transactions with respect to which a person is not entitled to rely solely on the information contained in the certificate provided in paragraph 1, subdivision (b) of this subsection but must instead obtain such additional information as required in order to be entitled to the deduction.
4. If a residential or commercial contractor is entitled to a deduction by complying with paragraph 1 of this subsection, the department may require the customer who caused the execution of the certificate to establish the accuracy and completeness of the information required to be contained in the certificate that would entitle the residential or commercial contractor to the deduction. If the customer cannot establish the accuracy and completeness of the information, the customer is liable in an amount equal to any tax, penalty and interest that the residential or commercial contractor would have been required to pay under article 1 of this chapter if the residential or commercial contractor had not complied with paragraph 1 of this subsection.
D. Subcontractors or others who perform services in respect to any improvement, building, railroad, excavation or other structure, project, development or improvement are not subject to tax if they can demonstrate that the job was within the control of a residential or commercial contractor or contractors and that the residential or commercial contractor is liable for the tax on the gross income, gross proceeds of sales or gross receipts attributable to the job and from which the subcontractors or others were paid.
E. Amounts received by a contractor for a project are excluded from the contractor's gross proceeds of sales or gross income derived from the business if the person who hired the contractor executes and provides a certificate to the contractor stating that the person providing the certificate is a residential or commercial contractor and is liable for the tax under this article. The department shall prescribe the form of the certificate. If the contractor has reason to believe that the information contained on the certificate is erroneous or incomplete, the department may disregard the certificate. If the person who provides the certificate is not liable for the tax as a residential or commercial contractor, that person is nevertheless deemed to be the residential or commercial contractor in lieu of the contractor and is subject to the tax under this section on the gross receipts or gross proceeds received by the contractor.
F. Every person engaging or continuing in this state in the business of residential or commercial contracting shall present to the customer of such residential or commercial contracting a written receipt of the gross income or gross proceeds of sales from such activity and shall separately state the taxes to be paid pursuant to this section.
G. The gross proceeds of sales or gross income derived from a contract for lawn maintenance services are not subject to tax under this section if the contract does not include landscaping activities. Lawn maintenance service is a service pursuant to section 42-5061, subsection a, paragraph 1, and includes lawn mowing and edging, weeding, repairing sprinkler heads or drip irrigation heads, seasonal replacement of flowers, refreshing gravel, lawn dethatching, seeding winter lawns, leaf and debris collection and removal, tree or shrub pruning or clipping, garden and gravel raking and applying pesticides, as defined in section 3-361, and fertilizer materials, as defined in section 3-262.
H. The gross proceeds of sales or gross income derived from landscaping activities are subject to tax under this section. Landscaping includes installing lawns, grading or leveling ground, installing gravel or boulders, planting trees and other plants, felling trees, removing or mulching tree stumps, removing other imbedded plants, building or modifying irrigation berms, repairing sprinkler or watering systems, installing railroad ties and installing underground sprinkler or watering systems.
I. The portion of gross proceeds of sales or gross income attributable to the actual direct costs of providing architectural or engineering services that are incorporated in a contract is not subject to tax under this section. For the purposes of this subsection, "direct costs" means the portion of the actual costs that are directly expended in providing architectural or engineering services.
J. Operating a landfill or a solid waste disposal facility is not subject to taxation under this section, including filling, compacting and creating vehicle access to and from cell sites within the landfill. Constructing roads to a landfill or solid waste disposal facility and constructing cells within a landfill or solid waste disposal facility may be deemed prime contracting under this section.
K. The gross proceeds of sales or gross income attributable to a separate, written design phase services contract or professional services contract, executed before modification begins, is not subject to tax under this section, regardless of whether the services are provided sequential to or concurrent with residential or commercial contracting activities that are subject to tax under this section. This subsection does not include the gross proceeds of sales or gross income attributable to construction phase services. For the purposes of this subsection:
1. "Construction phase services" means services for the execution and completion of any modification, including the following:
(a) Administration or supervision of any modification performed on the project, including team management and coordination, scheduling, cost controls, submittal process management, field management, safety program, close-out process and warranty period services.
(b) Administration or supervision of any modification performed pursuant to a punch list. For the purposes of this subdivision, "punch list" means minor items of modification work performed after substantial completion and before final completion of the project.
(c) Administration or supervision of any modification performed pursuant to change orders. For the purposes of this subdivision, "change order" means a written instrument issued after execution of a contract for modification work, providing for all of the following:
(i) The scope of a change in the modification work, contract for modification work or other contract documents.
(ii) The amount of an adjustment, if any, to the guaranteed maximum price as set in the contract for modification work. For the purposes of this item, "guaranteed maximum price" means the amount guaranteed to be the maximum amount due to a residential or commercial contractor for the performance of all modification work for the project.
(iii) The extent of an adjustment, if any, to the contract time of performance set forth in the contract.
(d) Administration or supervision of any modification performed pursuant to change directives. For the purposes of this subdivision, "change directive" means a written order directing a change in modification work before agreement on an adjustment of the guaranteed maximum price or contract time.
(e) Inspection to determine the dates of substantial completion or final completion.
(f) Preparation of any manuals, warranties, as-built drawings, spares or other items the residential or commercial contractor must furnish pursuant to the contract for modification work. For the purposes of this subdivision, "as-built drawing" means a drawing that indicates field changes made to adapt to field conditions, field changes resulting from change orders or buried and concealed installation of piping, conduit and utility services.
(g) Preparation of status reports after modification work has begun detailing the progress of work performed, including preparation of any of the following:
(i) aster schedule updates.
(ii) Modification work cash flow projection updates.
(iii) Site reports made on a periodic basis.
(iv) Identification of discrepancies, conflicts or ambiguities in modification work documents that require resolution.
(v) Identification of any health and safety issues that have arisen in connection with the modification work.
(h) Preparation of daily logs of modification work, including documentation of personnel, weather conditions and on-site occurrences.
(i) Preparation of any submittals or shop drawings used by the residential or commercial contractor to illustrate details of the modification work performed.
(j) Administration or supervision of any other activities for which a residential or commercial contractor receives a certificate for payment or certificate for final payment based on the progress of modification work performed on the project.
2. "Design phase services" means services for developing and completing a design for a project that are not construction phase services, including the following:
(a) Evaluating surveys, reports, test results or any other information on-site conditions for the project, including physical characteristics, legal limitations and utility locations for the site.
(b) Evaluating any criteria or programming objectives for the project to ascertain requirements for the project, such as physical requirements affecting cost or projected utilization of the project.
(c) Preparing drawings and specifications for architectural program documents, schematic design documents, design development documents, modification work documents or documents that identify the scope of or materials for the project.
(d) Preparing an initial schedule for the project, excluding the preparation of updates to the master schedule after modification work has begun.
(e) Preparing preliminary estimates of costs of modification work before completion of the final design of the project, including an estimate or schedule of values for any of the following:
(i) Labor, materials, machinery and equipment, tools, water, heat, utilities, transportation and other facilities and services used in the execution and completion of modification work, regardless of whether they are temporary or permanent or whether they are incorporated in the modifications.
(ii) The cost of labor and materials to be furnished by the owner of the real property.
(iii) The cost of any equipment of the owner of the real property to be assigned by the owner to the residential or commercial contractor.
(iv) The cost of any labor for installation of equipment separately provided by the owner of the real property that has been designed, specified, selected or specifically provided for in any design document for the project.
(v) Any fee paid by the owner of the real property to the residential or commercial contractor pursuant to the contract for modification work.
(vi) Any bond and insurance premiums.
(vii) Any applicable taxes.
(viii) Any contingency fees for the residential or commercial contractor that may be used before final completion of the project.
(f) Reviewing and evaluating cost estimates and project documents to prepare recommendations on site use, site improvements, selection of materials, building systems and equipment, modification feasibility, availability of materials and labor, local modification activity as related to schedules and time requirements for modification work.
(g) Preparing the plan and procedures for selection of subcontractors, including any prequalification of subcontractor candidates.
3. "Professional services" means architect services, assayer services, engineer services, geologist services, land surveying services or landscape architect services that are within the scope of those services as provided in title 32, chapter 1 and for which gross proceeds of sales or gross income has not otherwise been deducted under subsection K of this section.
L. Notwithstanding subsection M, paragraph 6 of this section, a person owning real property who enters into a contract for sale of the real property, who is responsible to the new owner of the property for modifications made to the property in the period subsequent to the transfer of title and who receives a consideration for the modifications is considered a residential or commercial contractor solely for purposes of taxing the gross proceeds of sale or gross income received for the modifications made subsequent to the transfer of title. The original owner's gross proceeds of sale or gross income received for the modifications shall be determined according to the following methodology:
1. If any part of the contract for sale of the property specifies amounts to be paid to the original owner for the modifications to be made in the period subsequent to the transfer of title, the amounts are included in the original owner's gross proceeds of sale or gross income under this section. Proceeds from the sale of the property that are received after transfer of title and that are unrelated to the modifications made subsequent to the transfer of title are not considered gross proceeds of sale or gross income from the modifications.
2. If the original owner enters into an agreement separate from the contract for sale of the real property providing for amounts to be paid to the original owner for the modifications to be made in the period subsequent to the transfer of title to the property, the amounts are included in the original owner's gross proceeds of sale or gross income received for the modifications made subsequent to the transfer of title.
3. If the original owner is responsible to the new owner for modifications made to the property in the period subsequent to the transfer of title and derives any gross proceeds of sale or gross income from the project subsequent to the transfer of title other than a delayed disbursement from escrow unrelated to the modifications, it is presumed that the amounts are received for the modifications made subsequent to the transfer of title unless the contrary is established by the owner through its books, records and papers kept in the regular course of business.
4. The tax base of the original owner is computed in the same manner as a residential or commercial contractor under this section.
M. For the purposes of this section:
1. "Contracting" means engaging in business as a contractor.
2. "Contractor" is synonymous with the term "builder" and means any person or organization that undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does personally or by or through others, modify any building, highway, road, railroad, excavation, manufactured building or other structure, project, development or improvement, or to do any part of such a project, including the erection of scaffolding or other structure or works in connection with such a project, and includes subcontractors and specialty contractors. For all purposes of taxation or deduction, this definition shall govern without regard to whether or not such contractor is acting in fulfillment of a contract.
3. "Modification" means construction, alteration, repair, addition, subtraction, improvement, movement, wreckage or demolition.
4. "Modify" means to construct, alter, repair, add to, subtract from, improve, move, wreck or demolish.
5. "Residential or commercial contracting" means engaging in business as a residential or commercial contractor.
6. "Residential or commercial contractor" means a contractor who holds a residential or commercial contracting classification license from the Arizona registrar and who supervises, performs or coordinates the modification of any building, railroad, excavation, or other structure, project, development or improvement including the contracting, if any, with any subcontractors or specialty contractors and who is responsible for the completion of the contract. Except as provided in subsections e and L of this section, a person who owns real property, who engages one or more contractors to modify that real property and who does not itself modify that real property is not a residential or commercial contractor within the meaning of this paragraph regardless of the existence of a contract for sale or the subsequent sale of that real property."
Renumber to conform
Page 112, strike lines 29 through 32
Page 113, strike lines 1 through 6, insert:
"B. The taxes imposed pursuant to this article do not apply to the gross proceeds of sales or gross income derived pursuant to contracts entered into before the date of the election to authorize the tax by prime contractors and owner builders highway, street and bridge construction contractors who are classified under sections 42‑5075 and 42‑5076 section 42‑5078 unless the contract contains a provision which entitles the contractor to recover the amount of the tax from a purchaser. In order to qualify for this exemption the contractor shall provide sufficient documentation, in a manner and form prescribed by the department, to verify that a contract was entered into before the date of the election to authorize the tax."
Page 113, between lines 6 and 7, insert:
"Sec. 30. Section 42-6105, Arizona Revised Statutes, is amended to read:
42-6105. County transportation excise tax; counties with population of one million two hundred thousand or more persons
A. If approved by the qualified electors voting at a countywide election, a county with a population of one million two hundred thousand or more persons shall levy and the department shall collect a tax as provided by this section, in addition to all other taxes.
B. The tax shall be levied and collected:
1. At a rate of not more than ten per cent of the transaction privilege tax rate prescribed by section 42‑5010, subsection A applying, as of January 1, 1990, to each person engaging or continuing in the county in a business taxed under chapter 5, article 1 of this title.
2. In the case of persons subject to the tax imposed under section 42‑5352, subsection A, At a rate of not more than .305 cents per gallon of jet fuel sold ten per cent of the rate prescribed by section 42-5352, subsection A.
3. On the use or consumption of electricity or natural gas by retail electric or natural gas customers in the county who are subject to use tax under section 42‑5155, at a rate equal to the transaction privilege tax rate under paragraph 1 of this subsection applying to persons engaging or continuing in the county in the utilities transaction privilege tax classification.
C. The tax levied under this section shall be in effect for a term of twenty years.
D. The net revenues collected under this section shall be distributed and deposited as follows for use consistent with the regional transportation plan adopted under title 28, chapter 17, article 1:
1. 56.2 per cent to the regional area road fund pursuant to section 28‑6303 for freeways and other routes in the state highway system, including capital expense and maintenance.
2. 10.5 per cent to the regional area road fund pursuant to section 28‑6303 for major arterial streets and intersection improvements, including capital expense and implementation studies.
3. 33.3 per cent to the public transportation fund pursuant to section 48‑5103 for:
(a) Capital costs, maintenance and operation of public transportation classifications.
(b) Capital costs and utility relocation costs associated with a light rail public transit system.
Sec. 31. Section 42-6106, Arizona Revised Statutes, is amended to read:
42-6106. County transportation excise tax
A. If approved by the qualified electors voting at a countywide election, the regional transportation authority in any county shall levy and the department shall collect a transportation excise tax up to the rate authorized by this section in addition to all other taxes.
B. The tax shall be levied and collected:
1. At a rate of not more than ten per cent of the transaction privilege tax rate prescribed by section 42‑5010, subsection A in effect on January 1, 1990 to each person engaging or continuing in the county in a business taxed under chapter 5, article 1 of this title.
2. In the case of persons subject to the tax imposed under section 42‑5352, subsection A, At a rate of not more than .305 cents per gallon of jet fuel sold ten per cent of the rate prescribed by section 42-5352, subsection A.
3. On the use or consumption of electricity or natural gas by retail electric or natural gas customers in the county who are subject to use tax under section 42‑5155, at a rate equal to the transaction privilege tax rate under paragraph 1 applying to persons engaging or continuing in the county in the utilities transaction privilege tax classification.
C. Any subsequent reduction in the transaction privilege tax rate prescribed by chapter 5, article 1 of this title shall not reduce the tax that is approved and collected as prescribed in this section. The department shall collect the tax at a variable rate if the variable rate is specified in the ballot proposition. The department shall collect the tax at a modified rate if approved by a majority of the qualified electors voting.
D. The net revenues collected under this section:
1. In counties with a population exceeding four hundred thousand persons, shall be deposited in the regional transportation fund pursuant to section 48‑5307.
2. In counties with a population of four hundred thousand or fewer persons, shall be deposited in the public transportation authority fund pursuant to section 28‑9142 or the regional transportation fund pursuant to section 48‑5307 or shall be allocated between both funds.
E. The tax shall be levied under this section beginning January 1 or July 1, whichever date occurs first after approval by the voters, and may be in effect for a period of not more than twenty years.
Sec. 32. Section 42-6107, Arizona Revised Statutes, is amended to read:
42-6107. County transportation excise tax for roads
A. If a majority of the qualified electors voting at a countywide special election, or a majority of the qualified electors voting on the ballot proposition at a general election, approves the transportation excise tax, the county shall levy and the department shall collect a tax:
1. At a rate of not more than ten per cent of the transaction privilege tax rate as prescribed by section 42‑5010, subsection A applying, as of January 1, 1990, to each person engaging or continuing in the county in a business taxed under chapter 5, article 1 of this title.
2. In the case of persons subject to the tax imposed under section 42‑5352, subsection A, At a rate of not more than .305 cents per gallon of jet fuel sold ten per cent of the rate prescribed by section 42-5352, subsection A.
3. On the use or consumption of electricity or natural gas by retail electric or natural gas customers in the county who are subject to use tax under section 42‑5155, at a rate equal to the transaction privilege tax rate under paragraph 1 applying to persons engaging or continuing in the county in the utilities transaction privilege tax classification. If a majority of the qualified electors in the county approved the transportation excise tax under this section before 1998, a tax under this paragraph may be approved by resolution adopted by a majority of the board of supervisors.
B. The net revenues collected under this section within a county shall be deposited in the county's regional area road fund pursuant to title 28, chapter 17, article 3.
C. The tax shall be levied under this section beginning January 1 or July 1, whichever date occurs first after approval by the voters, and may be in effect for a period of not more than twenty years."
Page 123, between lines 25 and 26, insert:
"Sec. 43. City and town auditors
Notwithstanding section 42-6001, Arizona Revised Statutes, as amended by this act, for the period beginning January 1, 2015 and ending December 31, 2015, the department shall enter into an agreement with the governing body of an incorporated city or town to furnish part-time or full-time personnel to perform audit services within the boundaries of the city or town. The incorporated city or town shall pay to the department the amount agreed to be paid.
Sec. 44. Rate limitation
An incorporated city or town shall not impose a municipal contracting excise tax rate higher than the rate imposed on construction contracting, speculative builder or owner‑builder, as in effect on December 31, 2012."
Renumber to conform
Strike lines 30, 31 and 32
Page 124, strike lines 1 through 5, insert:
"A. Sections 42-5039 and 42-6113, Arizona Revised Statutes, as added by this act, and sections 42-6105, 42-6106, 42-6107, 48-4022 and 48-5805, Arizona Revised Statutes, as amended by this act, are effective from and after December 31, 2013.
B. Sections 42-5078, 42-6020 and 42-6021, Arizona Revised Statutes, as added by this act and sections 41-1516, 41-1532, 42-1004, 42-1103, 42-5001, 42-5006, 42-5009, 42-5010, 42-5029, 42-5032.01, 42‑5032.02, 42-5061, 42-5071, 42-5072, 42-5075, 42‑5151, 42‑5155, 42-5159, 42‑5160, 42-6001, 42‑6002, 42‑6004, 42-6005, 42‑6102, 43‑1072.01, 44-1263 and 49-290, Arizona Revised Statutes, as amended by this act, are effective from and after December 31, 2014."
Amend title to conform
STEVE YARBROUGH |
2111sy2.doc
03/19/2013
4:37 PM
C: kcb
