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REVISED: 11/16/15
NOTICE OF THE EXECUTIVE
AND REGULAR SESSIONS OF THE
FOUNTAIN HILLS TOWN COUNCIL
TIME: 5:15 P.M. – EXECUTIVE SESSION
(Executive Session will be held in the Fountain Conference Room - 2nd floor)
6:30 P.M. – REGULAR SESSION
WHEN: THURSDAY, NOVEMBER 19, 2015
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s
various Commission, Committee or Board members may be in attendance at the Council meeting.
Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to
consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town
Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording.
Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal
action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a
recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived.
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk
prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber
Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk or the
Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their
name and whether or not they reside in Fountain Hills (do not provide a home address) prior to
commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers.
Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker
will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i)
reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public
Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be
waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to
a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting.
Please be respectful when making your comments. If you do not comply with these rules, you will be
asked to leave.
Mayor Linda M. Kavanagh
Vice Mayor Dennis Brown Councilmember Henry Leger
Councilmember Nick DePorter Councilmember Alan Magazine
Councilmember Cassie Hansen Councilmember Cecil A. Yates
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EXECUTIVE SESSION AGENDA
CALL TO ORDER – Mayor Linda M. Kavanagh
1. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: Pursuant to:
A.R.S. § 38-431.03(A)(3), Discussion or consultation for legal advice with the attorney or
attorneys of the public body, and A.R.S. § 38-431.03(A)(4), Discussion or consultation with
the attorneys of the public body in order to consider its position and instruct its attorneys
regarding the public body’s position regarding contracts that are the subject of negotiations,
in pending or contemplated litigation or in settlement discussions conducted in order to
avoid or resolve litigation (specifically: (i) a settlement offer on a tax enforcement action,
and (ii) the Park Place Development Agreement).
2. ADJOURNMENT.
REGULAR SESSION AGENDA
CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh
INVOCATION – Pastor David Felton, The Fountains, A United Methodist Church
ROLL CALL – Mayor Linda M. Kavanagh
MAYOR’S REPORT
i) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i) Mayor Kavanagh may review RECENT EVENTS attended relating to Economic
Development.
ii) PRESENTATION by the Fountain Hills Cultural and Civic Association
Boardmember Jerry Caldwell relating to the history of the organization and its
future plans for the Town.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the
agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to
reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on
matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal
action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism,
(ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda.
CONSENT AGENDA ITEMS
All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be
enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of
consent items will include all recommended staff stipulations unless otherwise stated. There will be no
separate discussion of these items unless a Councilmember or member of the public so requests. If a
Councilmember or member of the public wishes to discuss an item on the consent agenda, he/she may
request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or
Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from
the Consent Agenda and considered in its normal sequence on the Agenda.
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1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
October 15 and November 5, 2015.
2. CONSIDERATION for approval of RESOLUTION 2015-55, abandoning whatever right,
title, or interest the Town has in the certain public utility and drainage easement located at
the rear property line of Plat 603C, Block 5, Lot 1 (15729 East Cholla Drive), as recorded in
Book 161, Page 43, records of Maricopa County, Arizona. EA2015-12
REGULAR AGENDA ITEMS
3. CONSIDERATION of REVISING the McDowell Mountain Preserve Master Plan to add
the East Loop Sonoran Trail.
4. CONSIDERATION of a FINAL REPLAT at 16750, 16800 & 16820 E. Paul Nordin
Parkway and at 16845 E. Avenue of the Fountains (Plat 208, Block 7, Lots 1, 2, 3). Case #
S2015-08. This item was TABLED at the 11/5/15 Council meeting.
5. CONSIDERATION of RESOLUTION 2015-56, declaring as a public record that certain
document filed with the Town Clerk and entitled “The 2012-2014 Amendments to the Tax
Code of the Town of Fountain Hills.”
6. CONSIDERATION of ORDINANCE 15-11, relating to the transaction privilege tax;
adopting the “The 2012-2014 Amendments to the Tax Code of the Town of Fountain Hills”
by reference; establishing effective dates; providing for severability and providing penalties
for violations.
7. COUNCIL DISCUSSION/DIRECTION to the Town Manager.
Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action
or (ii) directing staff to conduct further research and report back to the Council:
i.) None.
8. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the
Mayor, Individual Councilmembers, and the Town Manager.
9. ADJOURNMENT.
DATED this 12th day of November, 2015.
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-
5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this
meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council
with this agenda are available for review in the Clerk’s office.
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REVISED: 11/16/15
NOTICE OF THE EXECUTIVE
AND REGULAR SESSIONS OF THE
FOUNTAIN HILLS TOWN COUNCIL
TIME: 5:15 P.M. – EXECUTIVE SESSION
(Executive Session will be held in the Fountain Conference Room - 2nd floor)
6:30 P.M. – REGULAR SESSION
WHEN: THURSDAY, NOVEMBER 19, 2015
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
Councilmembers of the Town of Fountain Hills will attend either in person or by telephone conference call; a quorum of the Town’s
various Commission, Committee or Board members may be in attendance at the Council meeting.
Notice is hereby given that pursuant to A.R.S. § 1-602.A.9, subject to certain specified statutory exceptions, parents have a right to
consent before the State or any of its political subdivisions make a video or audio recording of a minor child. Meetings of the Town
Council are audio and/or video recorded and, as a result, proceedings in which children are present may be subject to such recording.
Parents, in order to exercise their rights may either file written consent with the Town Clerk to such recording, or take personal
action to ensure that their child or children are not present when a recording may be made. If a child is present at the time a
recording is made, the Town will assume that the rights afforded parents pursuant to A.R.S. § 1-602.A.9 have been waived.
PROCEDURE FOR ADDRESSING THE COUNCIL
Anyone wishing to speak before the Council must fill out a speaker’s card and submit it to the Town Clerk
prior to Council discussion of that Agenda item. Speaker Cards are located in the Council Chamber
Lobby and near the Clerk’s position on the dais.
Speakers will be called in the order in which the speaker cards were received either by the Clerk or the
Mayor. At that time, speakers should stand and approach the podium. Speakers are asked to state their
name and whether or not they reside in Fountain Hills (do not provide a home address) prior to
commenting and to direct their comments to the Presiding Officer and not to individual Councilmembers.
Speakers’ statements should not be repetitive. If a speaker chooses not to speak when called, the speaker
will be deemed to have waived his or her opportunity to speak on the matter. Speakers may not (i)
reserve a portion of their time for a later time or (ii) transfer any portion of their time to another speaker.
If there is a Public Hearing, please submit the speaker card to speak to that issue during the Public
Hearing.
Individual speakers will be allowed three contiguous minutes to address the Council. Time limits may be
waived by (i) discretion of the Town Manager upon request by the speaker not less than 24 hours prior to
a Meeting, (ii) consensus of the Council at Meeting or (iii) the Mayor either prior to or during a Meeting.
Please be respectful when making your comments. If you do not comply with these rules, you will be
asked to leave.
Mayor Linda M. Kavanagh
Vice Mayor Dennis Brown Councilmember Henry Leger
Councilmember Nick DePorter Councilmember Alan Magazine
Councilmember Cassie Hansen Councilmember Cecil A. Yates
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EXECUTIVE SESSION AGENDA
CALL TO ORDER – Mayor Linda M. Kavanagh
1. ROLL CALL AND VOTE TO GO INTO EXECUTIVE SESSION: Pursuant to:
A.R.S. § 38-431.03(A)(3), Discussion or consultation for legal advice with the attorney or
attorneys of the public body, and A.R.S. § 38-431.03(A)(4), Discussion or consultation with
the attorneys of the public body in order to consider its position and instruct its attorneys
regarding the public body’s position regarding contracts that are the subject of negotiations,
in pending or contemplated litigation or in settlement discussions conducted in order to
avoid or resolve litigation (specifically: (i) a settlement offer on a tax enforcement action,
and (ii) the Park Place Development Agreement).
2. ADJOURNMENT.
REGULAR SESSION AGENDA
CALL TO ORDER AND PLEDGE OF ALLEGIANCE – Mayor Linda M. Kavanagh
INVOCATION – Pastor David Felton, The Fountains, A United Methodist Church
ROLL CALL – Mayor Linda M. Kavanagh
MAYOR’S REPORT
i) None.
SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS
i) Mayor Kavanagh may review RECENT EVENTS attended relating to Economic
Development.
ii) PRESENTATION by the Fountain Hills Cultural and Civic Association
Boardmember Jerry Caldwell relating to the history of the organization and its
future plans for the Town.
CALL TO THE PUBLIC
Pursuant to A.R.S. §38-431-01(H), public comment is permitted (not required) on matters not listed on the
agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to
reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on
matters raised during “Call to the Public” unless the matters are properly noticed for discussion and legal
action. At the conclusion of the call to the public, individual Councilmembers may (i) respond to criticism,
(ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda.
CONSENT AGENDA ITEMS
All items listed on the Consent Agenda are considered to be routine, non-controversial matters and will be
enacted by one motion and one roll call vote of the Council. All motions and subsequent approvals of
consent items will include all recommended staff stipulations unless otherwise stated. There will be no
separate discussion of these items unless a Councilmember or member of the public so requests. If a
Councilmember or member of the public wishes to discuss an item on the consent agenda, he/she may
request so prior to the motion to accept the Consent Agenda or with notification to the Town Manager or
Mayor prior to the date of the meeting for which the item was scheduled. The items will be removed from
the Consent Agenda and considered in its normal sequence on the Agenda.
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1. CONSIDERATION of approving the TOWN COUNCIL MEETING MINUTES from
October 15 and November 5, 2015.
2. CONSIDERATION for approval of RESOLUTION 2015-55, abandoning whatever right,
title, or interest the Town has in the certain public utility and drainage easement located at
the rear property line of Plat 603C, Block 5, Lot 1 (15729 East Cholla Drive), as recorded in
Book 161, Page 43, records of Maricopa County, Arizona. EA2015-12
REGULAR AGENDA ITEMS
3. CONSIDERATION of REVISING the McDowell Mountain Preserve Master Plan to add
the East Loop Sonoran Trail.
4. CONSIDERATION of a FINAL REPLAT at 16750, 16800 & 16820 E. Paul Nordin
Parkway and at 16845 E. Avenue of the Fountains (Plat 208, Block 7, Lots 1, 2, 3). Case #
S2015-08. This item was TABLED at the 11/5/15 Council meeting.
5. CONSIDERATION of RESOLUTION 2015-56, declaring as a public record that certain
document filed with the Town Clerk and entitled “The 2012-2014 Amendments to the Tax
Code of the Town of Fountain Hills.”
6. CONSIDERATION of ORDINANCE 15-11, relating to the transaction privilege tax;
adopting the “The 2012-2014 Amendments to the Tax Code of the Town of Fountain Hills”
by reference; establishing effective dates; providing for severability and providing penalties
for violations.
7. COUNCIL DISCUSSION/DIRECTION to the Town Manager.
Item(s) listed below are related only to the propriety of (i) placing such item(s) on a future agenda for action
or (ii) directing staff to conduct further research and report back to the Council:
i.) None.
8. SUMMARY OF COUNCIL REQUESTS and REPORT ON RECENT ACTIVITIES by the
Mayor, Individual Councilmembers, and the Town Manager.
9. ADJOURNMENT.
DATED this 12th day of November, 2015.
Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 480-816-
5100 (voice) or 1-800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this
meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council
with this agenda are available for review in the Clerk’s office.
TOWN OF FOUNTAIN HILLS
TOWN COUNCIL
AGENDA ACTION FORM
Meeting Date:11/19/2015 Meeting Type:Regular Session
Agenda Type:Consent Submitting Department:Administration
Staff Contact Information:Bevelyn J.Bender,Town Clerk;480-816-5115;bbender@fh.az.gov
Council Goal:
Strategic Values:Civic Responsibility C3 Solicit feedback in decision-making
REQUEST TO COUNCIL (Agenda Language):CONSIDERATION of approving the TOWN COUNCIL MEETING
MINUTES from October 15 and November 5,2015.
Applicant:NA
Applicant Contact Information:
Property Location:
Related Ordinance,Policy or Guiding Principle:A.R.S.§38-431.01
Staff Summary (background):The intent of approving previous meeting minutes is to ensure an accurate
account of the discussion and action that took place at that meeting for archival purposes.Approved minutes
are placed on the Town's website in compliance with state law.
Risk Analysis (options or alternatives with implications):
Fiscal Impact (initial and ongoing costs;budget status):
Budget Reference (page number):
Funding Source:NA
If Multiple Funds utilized,list here:
Budgeted;if No,attach Budget Adjustment Form:NA
Recommendation(s)by Board(s)or Commission(s):
Staff Recommendation(s):Approve
List Attachment(s):None
SUGGESTED MOTION (for council use):Move to approve the consent agenda as listed
Prepared by:Approved:
Bevelyn Bender,Town Clerk ""11/9/2015 Grady"E.Miller/To\i Manager 11/10/2015
Page 1 of 1
redact redact
f^%TOWN OF FOUNTAIN HILLS
TOWN COUNCIL
AGENDA ACTION FORM
Meeting Date:11/19/2015 Meeting Type:Regular Session
Agenda Type:Regular Submitting Department:Community Services
Staff Contact Information:Mark Mayer -mmayer@fh.az.gov /(480)816-5190
Strategic Planning Goal:Not Applicable (NA)Operational Priority:Not Applicable (NA)
REQUEST TO COUNCIL (Agenda Language):Consideration of Revising the McDowell Mountain Preserve Master Plan
to add the East Loop Sonoran Trail
Applicant:N/A
Applicant Contact Information:N/A
Property Location:McDowell Mountain Preserve
Related Ordinance,Policy or Guiding Principle:McDowell Mountain Preserve Master Plan
Staff Summary (background):The McDowell Mountain Preservation Commission voted at their June 23,2015
meeting to recommend to the Town Council the addition of a trail in the Preserve.This two mile additional trail
named the East Loop Sonoran Trail with two links would create a number of loops to the existing trail system
with varying lengths and difficulties.This would provide the option of not having hikers simply go back over the
same trail to return to their start.Loops are much prefered by hikers as they offer more choices of routes.
Mr.Bill Craig,who leads the Sonoran Conservancy's Trailblazers that construct and maintain our trails in the
Preserve,will address the Council with the request.
Jeremy Hall,representing the Eagles Nest Homeowners Association,asked that the Town meet with property
owners who had raised concerns that the proposed trail could potentially lead to more trespassing in their
subdivision.A meeting was held with property owners and the HOA on October 29. A follow up letter was
sent to all of the property owners and the HOA dated November 9,2015 that summerized the meeting.At that
meeting the Town committed to the following:
1)Move the trail from the back of the property lines to 300 feet rather than the originally proposed 200 feet.
2)Provide barriers at the current jeep road points being used by vehicles for access including off road vehicles
(ORV's).
3)Install signage in these areas notifying people that they are tresspassing.
4)Place signs at key points along the trail near Eagles Nest that trespassing is illegal and punishable by law
enforcement.
5) Build the proposed trail to a width of only two feet to discourage use by ORV's.
Page 1 of 2
TOWN OF FOUNTAIN HILLS
TOWN COUNCIL
AGENDA ACTION FORM
Meeting Date:11/19/2015 Meeting Type:Regular Session
Agenda Type:Regular Submitting Department:Development Services
Staff Contact Information:Robert Rodgers,Senior Planner rrodgers@fh.az.com 480-816-5138
Strategic Planning Goal:Not Applicable (NA)Operational Priority:Not Applicable (NA)
REQUEST TO COUNCIL (Agenda Language):
CONSIDERATION of a FINAL REPLAT at 16750,16800 &16820 E.Paul Nordin Parkway and at 16845 E.
Avenue of the Fountains (Plat 208,Block 7, Lots 1, 2, 3).
Case #S2015-08
Applicant:Fountain Hills Developer,LLC
Applicant Contact Information:14555 N.Scottsdale Rd.#240
Scottsdale,AZ 85254
480-315-9090
Owner:MS-RCS Fountain Hills, LLC
Owner Contact Information:371 Centennial Pkwy #200
Louisville,CO 80027
303-466-2500
Owner:Park Place Properties,LLC
Owner Contact Information:1221 Cleveland
Wilmette,IL 60091
C/O Sam Gambacorta,Managing Partner
Property Location:16750, 16800 &16820 E. Paul Nordin Pkwy and,
16845 E.Avenue of the Fountains
Fountain Hills, AZ 85268
Related Ordinance,Policy or Guiding Principle:
Fountain Hills Subdivision Ordinance ,Section 2.07 Replats
Staff Summary (background):
The Property owner, Fountain Hills Developer,LLC (Morningstar),currently owns the property located at
16750, 16800 & 16820 E. Paul Nordin Pkwy. The property is currently divided into three lots and contains
approximately 3.34 acres in total.
Page 1 of 2
2497772.1
RESOLUTION 2015-56
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, DECLARING AS A PUBLIC RECORD THAT
CERTAIN DOCUMENT FILED WITH THE TOWN CLERK AND ENTITLED
“THE 2012-2014 AMENDMENTS TO THE TAX CODE OF THE TOWN OF
FOUNTAIN HILLS.”
BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, as follows:
SECTION 1. That certain document entitled “The 2012-2014 Amendments to the Tax
Code of the Town of Fountain Hills,” of which one copy is on file in the office of the Town Clerk
and open for public inspection during normal business hours, is hereby declared to be a public
record, and said copies are ordered to remain on file with the Town Clerk.
PASSED AND ADOPTED BY the Mayor and Council of the Town of Fountain Hills,
Arizona, November 19, 2015.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Grady E. Miller, Town Manager Andrew J. McGuire, Town Attorney
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
The attached Ordinance and Resolution incorporate into the local tax code all of the Model City Tax Code
changes approved by the Municipal Tax Code Commission from 2012 through 2014, as described below
by Resolution Section number.
Section 1
Section 100 adds language to the existing definitions of "Business" and “Prosthetic”. This change
excludes the sale of electricity generated by consumer equipment from the definition of “Business”.
Adding this exclusion means persons that make such sales (e.g. residential solar energy sales) are not
deemed to be in the business of providing Utilities, and thus are not required to have a Privilege Tax
License to make such sales. The additional language that adds Orthodontics to the definition of
"Prosthetic" is a change intended to conform the Code to State statute. These changes are effective
retroactively from and after January 1, 2007 for “Business,” and October 1, 2007 for “Prosthetic.”
Section 2
Section 120 is repealed, eliminating the definition of "Food for Home Consumption." The elements of
this definition are incorporated in new Section 462, creating a separate “Food for Home Consumption”
tax classification apart from the Retail classification. This section is effective from and after July 1, 2013.
Section 3
Section 200 is amended to add conforming language under the determination of gross income that is
related to nuclear fuel sales as found in State statute. This section is effective from and after July 1, 2013.
Section 4
This section repeals and replaces all of Article III – Licensing and Recordkeeping. This is a critical step in
TPT Simplification that has the effect of making licensing as uniform as possible across all cities and
towns. Note that this section completely replaces the entirety of Article III in every city and town’s tax
code. This change also eliminates all Regulations numbered in the 300’s, as well as eliminating all Green
Sheet items related to tax licensing. This section also eliminates the use of the tax license as a means to
regulate business for any purpose other than tax collection. From now on, all licensing and enforcement
of a regulatory nature such as zoning, use permits, special events, inspections, etc., must be accomplished
by a separate business license. This section is effective from and after January 1, 2015.
Section 5
Section 422 is amended to remove an obsolete code reference related to Jet Fuel Sales. This section is
effective retroactively from and after September 21, 2006.
Section 6
Section 425 is amended to add an exemption from tax on Job Printing for sales of postage and freight in
conformity with State statute. This element is effective retroactively from and after September 21, 2006.
Also, Local Option #MM is eliminated effective July 1, 2012, also in conformity with State statute.
Section 7
Section 445 is amended to adopt the final version of a new exemption for Real Property Leases between
Affiliated Entities. This section is effective retroactively from and after July 20, 2011.
Section 8
Section 450 is amended to conform to the new State exemption and city preemption that makes the
leasing of certified ignition interlock devices required under DUI laws exempt from tax under Tangible
Personal Property Rental. This section is effective retroactively from and after September 1, 2004.
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
Section 9
Section 460 is amended in conformity with a new clarifying State exemption and matching city
preemption that makes the retail sale of gift cards and other cash equivalents exempt from the tax under
the Retail classification. This section is effective retroactively from and after October 1, 2007.
Section 10
Section 462, Retail Sales: Food for Home Consumption is added to the standard Model Code language.
This section incorporates all of the definitions and Regulations related to grocery sales that were
previously included only in those communities that selected Model Option #2. With this change and
standardization, Model Option #2 is eliminated from the Code. Cities and towns are now free to set a
distinct tax rate for grocery sales, which can by higher, lower, or zero, as the community sees fit. This
section is effective from and after July 1, 2013.
Section 11
Section 465, Retail Sales: Exemptions has undergone significant changes, largely in name of conformity
with State statute. A major goal of TPT Simplification was making conforming changes to the Retail
classification of the MCTC that aligned with State statute wherever possible, with the intention of
preparing for passage of the Marketplace Fairness Act. On the State tax side, the only change enacted was
elimination of an exemption for in-store sales to non-residents that are shipped out of State (excluding
vehicles). On the City side, this movement resulted in the elimination of Model Option #2, related to
food for home consumption creating a separate classification; eliminating Local Option #AA, allowing
tax exempt employee drinks and meals; and adding charter schools to the list that qualify for a food sale
exemption. Also, wholly new conforming exemptions were adopted, including one for the sale of
“renewable energy credits”; sale of periodicals to encourage tourism; sale of paper machine clothing to a
paper manufacturer; sales of overhead materials used in performing government contracts; and the sale of
fuels and sale of equipment to qualified environmental technology manufacturers. All of these changes
are effective July 1, 2013, with the exception of the sale of “renewable energy credits” which is effective
retroactively from and after January 1, 2007.
Section 12
Changes to this section include adding in a specific exemption from the Utilities classification for sales of
excess energy produced by a consumer’s photovoltaic system to a utility distributor, along with language
that removes the sale of RECs from the Utilities classification. This provides the exemption under the
Utilities classification to clarify that when the meter spins backward, the taxable measure is the net charge
to the consumer, and that REC sales are not part of the gross receipts under Utilities. This section shall be
effective from and after January 1, 2007.
Section 13
Section 485 is added to the standard code language, creating a new classification that imposes tax on
wastewater removal services. This section was formerly a Green Page in several cities. This conversion to
standard code language is part of the ongoing effort to eliminate the Green Pages by either eliminating or
adopting exception items. This section shall be effective from and after July 1, 2013. Fountain Hills has
chosen to maintain its previous exemption in this area through the application of a zero percent tax rate
for this classification.
Section 14
Section 570 is amended to grant the Tax Collector greater latitude in allowing extensions to taxpayers that
are making a good faith effort to produce additional information during the audit protest process.
Previously the code technically allowed only one 45-day extension to taxpayers protesting audit results,
so actual practice resulted in many “unofficial” extensions. This change allows the Tax Collector to grant
additional extension at their discretion. This section is deemed effective from and after July 1, 2008.
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
Section 15
Section 660, Use Tax: Exemptions has undergone significant changes which mirror the changes to the
Retail Exemptions noted above in Code Section 465. Again, these are being done in the name of
conformity with State statute. This movement resulted in the elimination of the food for home
consumption exemption; adding an exemption for employee drinks and meals; and adding charter schools
to the list that qualify for a food exemption. Also, wholly new conforming exemptions were adopted,
including one for the purchase of “Renewable Energy Credits” or RECs; periodicals to encourage
tourism; paper machine clothing to a paper manufacturer; overhead materials used in performing
government contracts; and the purchase of fuels and sale of equipment to qualified environmental
technology manufacturers. All of these changes are effective July 1, 2013, with the exception of
“Renewable Energy Credits” which is effective retroactively from and after January 1, 2007.
Section 16
This section repeals Regulation 120.1 related to the definition of Food for Home Consumption, which has
been incorporated in the text of new Section 462 noted above. This section shall be effective from and
after July 1, 2013.
Section 17
This section amends Regulation 270.1, adding the provision of wastewater removal services to the list of
activities that are considered proprietary and therefore taxable when engaged in by a city or town. This
section shall be effective from and after July 1, 2013.
Section 18
This section amends Regulation 460.1, adding the distinction from Retail for activities that fall under the
two new classifications: Food for Home Consumption in Section 462, and Wastewater Removal Services
in Section 485.This means that an exchange of tangible personal property that occurs under the activity
described in Sections 462 or 485, is specifically NOT considered a Retail transaction. This section shall
be effective from and after July 1, 2013.
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Section I. Model City Tax Code Section 8A-100 is amended as follows, with an effective date of
January 1, 2007 for the change to “Business”; October 1, 2007 for the change to “Prosthetic.”
Sec. 8A-100. General definitions.
For the purposes of this Chapter, the following definitions apply:
"Assembler" means a person who unites or combines products, wares, or articles of manufacture so as to
produce a change in form or substance of such items without changing or altering component parts.
"Broker" means any person engaged or continuing in business who acts for another for a consideration in the
conduct of a business activity taxable under this Chapter, and who receives for his principal all or part of the
gross income from the taxable activity.
"Business" means INCLUDES all activities or acts, personal or corporate, engaged in and OR caused to be
engaged in with the object of gain, benefit, or advantage, either directLY or indirectLY, but DOES not
INCLUDE EITHER: casual activities or sales; OR THE TRANSFER OF ELECTRICITY FROM A SOLAR
PHOTOVOLTAIC GENERATION SYSTEM TO AN ELECTRIC UTILITY DISTRIBUTION SYSTEM.
"Business Day" means any day of the week when the Tax Collector's office is open for the public to conduct
the Tax Collector's business.
"Casual Activity or Sale" means a transaction of an isolated nature made by a person who neither represents
himself to be nor is engaged in a business subject to a tax imposed by this Chapter. However, no sale, rental,
license for use, or lease transaction concerning real property nor any activity entered into by a business
taxable by this Chapter shall be treated, or be exempt, as casual. This definition shall include sales of used
capital assets, provided that the volume and frequency of such sales do not indicate that the seller regularly
engages in selling such property.
"Combined Taxes" means the sum of all applicable Arizona Transaction Privilege and Use Taxes; all
applicable transportation taxes imposed upon gross income by this County as authorized by Article III,
Chapter 6, Title 42, Arizona Revised Statutes; and all applicable taxes imposed by this Chapter.
"Commercial Property" is any real property, or portion of such property, used for any purpose other than
lodging or lodging space, including structures built for lodging but used otherwise, such as model homes,
apartments used as offices, etc.
"Communications Channel" means any line, wire, cable, microwave, radio signal, light beam, telephone,
telegraph, or any other electromagnetic means of moving a message.
"Construction Contracting" refers to the activity of a construction contractor.
"Construction Contractor" means a person who undertakes to or offers to undertake to, or purports to have the
capacity to undertake to, or submits a bid to, or does himself or by or through others, construct, alter, repair,
add to, subtract from, improve, move, wreck, or demolish any building, highway, road, railroad, excavation,
or other structure, project, development, or improvement to real property, or to do any part thereof.
"Construction contractor" includes subcontractors, specialty contractors, prime contractors, and any person
receiving consideration for the general supervision and/or coordination of such a construction project except
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for remediation contracting. This definition shall govern without regard to whether or not the construction
contractor is acting in fulfillment of a contract.
"Delivery (of Notice) by the Tax Collector" means "receipt (of notice) by the taxpayer".
"Delivery, Installation, or Other Direct Customer Services" means services or labor, excluding repair labor,
provided by a taxpayer to or for his customer at the time of transfer of tangible personal property; provided
further that the charge for such labor or service is separately billed to the customer and maintained separately
in the taxpayer's books and records.
"Engaging", when used with reference to engaging or continuing in business, includes the exercise of
corporate or franchise powers.
"Equivalent Excise Tax" means either:
(1) a Privilege or Use Tax levied by another Arizona municipality upon the transaction in
question, and paid either to such Arizona municipality directly or to the vendor; or
(2) an excise tax levied by a political subdivision of a state other than Arizona upon the
transaction in question, and paid either to such jurisdiction directly or to the vendor; or
(3) an excise tax levied by a Native American Government organized under the laws of the
federal government upon the transaction in question, and paid either to such jurisdiction
directly or to the vendor.
"Federal Government" means the United States Government, its departments and agencies; but not including
national banks or federally chartered or insured banks, savings and loan institutions, or credit unions.
"Food" means any items intended for human consumption as defined by rules and regulations adopted by the
Department of Revenue, State of Arizona, pursuant to A.R.S. Section 42-5106. Under no circumstances shall
"food" include alcoholic beverages or tobacco, or food items purchased for use in conversion to any form of
alcohol by distillation, fermentation, brewing, or other process. Under no circumstances shall "food" include
an edible product, beverage, or ingredient infused, mixed, or in any way combined with medical marijuana or
an active ingredient of medical marijuana.
"Hotel" means any public or private hotel, inn, hostelry, tourist home, house, motel, rooming house,
apartment house, trailer, or other lodging place within the Town offering lodging, wherein the owner thereof,
for compensation, furnishes lodging to any transient, except foster homes, rest homes, sheltered care homes,
nursing homes, or primary health care facilities.
"Jet Fuel" means jet fuel as defined in A.R.S. Section 42-5351.
"Job Printing" means the activity of copying or reproducing an article by any means, process, or method. "Job
printing" includes engraving of printing plates, embossing, copying, micrographics, and photo reproduction.
"Lessee" includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter.
"Lessor" includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter.
"Licensing (for Use)" means any agreement between the user ("licensee") and the owner or the owner's agent
("licensor") for the use of the licensor's property whereby the licensor receives consideration, where such
agreement does not qualify as a "sale" or "lease" or "rental" agreement.
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"Lodging (Lodging Space)" means any room or apartment in a hotel or any other provider of rooms, trailer
spaces, or other residential dwelling spaces; or the furnishings or services and accommodations accompanying
the use and possession of said dwelling space, including storage or parking space for the property of said
tenant.
"Manufactured Buildings" means a manufactured home, mobile home or factory built building, as defined in
A.R.S. Section 41-2142.
"Manufacturer" means a person engaged or continuing in the business of fabricating, producing, or
manufacturing products, wares, or articles for use from other forms of tangible personal property, imparting to
such new forms, qualities, properties, and combinations.
"Medical marijuana" means "marijuana" used for a "medical use" as those terms are defined in A.R.S. Section
36-2801.
"Mining and Metallurgical Supplies" means all tangible personal property acquired by persons engaged in
activities defined in Section 8A-432 for such use. This definition shall not include:
(1) janitorial equipment and supplies.
(2) office equipment, office furniture, and office supplies.
(3) motor vehicles licensed for use upon the highways of the State.
"Modifier" means a person who reworks, changes, or adds to products, wares, or articles of manufacture.
"Nonprofit Entity" means any entity organized and operated exclusively for charitable purposes, or operated
by the Federal Government, the State, or any political subdivision of the State.
"Occupancy (of Real Property)" means any occupancy or use, or any right to occupy or use, real property
including any improvements, rights, or interests in such property.
"Out-of-Town Sale" means the sale of tangible personal property and job printing if all of the following
occur:
(1) transference of title and possession occur without the Town; and
(2) the stock from which such personal property was taken was not within the corporate limits of
the Town; and
(3) the order is received at a permanent business location of the seller located outside the Town;
which location is used for the substantial and regular conduct of such business sales activity.
In no event shall the place of business of the buyer be determinative of the situs of the receipt
of the order.
For the purpose of this definition it does not matter that all other indicia of business occur within the Town,
including, but not limited to, accounting, invoicing, payments, centralized purchasing, and supply to out-of-
Town storehouses and out-of-Town retail branch outlets from a primary storehouse within the Town.
"Out-of-State Sale" means the sale of tangible personal property and job printing if all of the following occur:
(1) the order is placed from without the State of Arizona; and
(2) the property is delivered to the buyer at a location outside the State; and
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(3) the property is purchased for use outside the State.
"Owner-Builder" means an owner or lessor of real property who, by himself or by or through others,
constructs or has constructed or reconstructs or has reconstructed any improvement to real property.
"Person" means an individual, firm, partnership, joint venture, association, corporation, estate, trust, receiver,
syndicate, broker, the Federal Government, this State, or any political subdivision or agency of this State. For
the purposes of this Chapter, a person shall be considered a distinct and separate person from any general or
limited partnership or joint venture or other association with which such person is affiliated. A subsidiary
corporation shall be considered a separate person from its parent corporation for purposes of taxation of
transactions with its parent corporation.
"Prosthetic" means any of the following tangible personal property if such items are prescribed or
recommended by a licensed podiatrist, chiropractor, dentist, physician or surgeon, naturopath, optometrist,
osteopathic physician or surgeon, psychologist, hearing aid dispenser, physician assistant, nurse practitioner
or veterinarian:
(1) any man-made device for support or replacement of a part of the body, or to increase acuity
of one of the senses. Such items include: prescription eyeglasses; contact lenses; hearing
aids; artificial limbs or teeth; neck, back, arm, leg, or similar braces.
(2) insulin, insulin syringes, and glucose test strips sold with or without a prescription.
(3) hospital beds, crutches, wheelchairs, similar home health aids, or corrective shoes.
(4) drugs or medicine, including oxygen.
(5) equipment used to generate, monitor, or provide health support systems, such as respiratory
equipment, oxygen concentrator, dialysis machine.
(6) durable medical equipment which has a federal health care financing administration common
procedure code, is designated reimbursable by Medicare, can withstand repeated use, is
primarily and customarily used to serve a medical purpose, is generally not useful to a person
in the absence of illness or injury and is appropriate for use in the home.
(7) ORTHODONTIC DEVICES DISPENSED BY A DENTAL PROFESSIONAL WHO IS
LICENSED UNDER TITLE 32, CHAPTER 11 TO A PATIENT AS PART OF THE
PRACTICE OF DENTISTRY.
(7)(8) Under no circumstances shall "prosthetic" include medical marijuana regardless of whether it
is sold or dispensed pursuant to a prescription, recommendation, or written certification by
any authorized person.
"Qualifying Community Health Center"
(1) means an entity that is recognized as nonprofit under 501(c)(3) of the United States Internal
Revenue Code, that is a community-based, primary care clinic that has a community-based
board of directors and that is either:
(A) the sole provider of primary care in the community.
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(B) a nonhospital affiliated clinic that is located in a federally designated medically
underserved area in this State.
(2) includes clinics that are being constructed as qualifying community health centers.
"Qualifying Health Care Organization" means an entity that is recognized as nonprofit under Section 501(c)
of the United States Internal Revenue Code and that uses, saves or invests at least eighty percent (80%) of all
monies that it receives from all sources each year only for health and medical related educational and
charitable services, as documented by annual financial audits prepared by an independent certified public
accountant, performed according to generally accepted accounting standards and filed annually with the
Arizona Department of Revenue. Monies that are used, saved or invested to lease, purchase or construct a
facility for health and medical related education and charitable services are included in the eighty percent
(80%) requirement.
"Qualifying Hospital" means any of the following:
(1) a licensed hospital which is organized and operated exclusively for charitable purposes, no
part of the net earnings of which inures to the benefit of any private shareholder or
individual.
(2) a licensed nursing care institution or a licensed residential care institution or a residential
care facility operated in conjunction with a licensed nursing care institution or a licensed
kidney dialysis center, which provides medical services, nursing services or health related
services and is not used or held for profit.
(3) a hospital, nursing care institution or residential care institution which is operated by the
federal government, this State or a political subdivision of this State.
(4) a facility that is under construction and that on completion will be a facility under
subdivision (1), (2) or (3) of this paragraph.
"Receipt (of Notice) by the Taxpayer" means the earlier of actual receipt or the first attempted delivery by
certified United States mail to the taxpayer's address of record with the Tax Collector.
"Remediation" means those actions that are reasonable, necessary, cost-effective and technically feasible in
the event of the release or threat of release of hazardous substances into the environment such that the waters
of the State are or may be affected, such actions as may be necessary to monitor, assess and evaluate such
release or threat of release, actions of remediation, removal or disposal of hazardous substances or taking such
other actions as may be necessary to prevent, minimize or mitigate damage to the public health or welfare or
to the waters of the State which may otherwise result from a release or threat of release of a hazardous
substance that will or may affect the waters of the State. Remediation activities include the use of
biostimulation with indigenous microbes and bioaugmentation using microbes that are nonpathogenic,
nonopportunistic and that are naturally occurring. Remediation activities may include community information
and participation costs and providing an alternative drinking water supply.
"Rental Equipment" means tangible personal property sold, rented, leased, or licensed to customers to the
extent that the item is actually used by the customer for rental, lease, or license to others; provided that:
(1) the vendee is regularly engaged in the business of renting, leasing, or licensing such property
for a consideration; and
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(2) the item so claimed as "rental equipment" is not used by the person claiming the exemption
for any purpose other than rental, lease, or license for compensation, to an extent greater than
fifteen percent (15%) of its actual use.
"Rental Supply" means an expendable or nonexpendable repair or replacement part sold to become part of
"rental equipment", provided that:
(1) the documentation relating to each purchased item so claimed specifically itemizes to the
vendor the actual item of "rental equipment" to which the purchased item is intended to be
attached as a repair or replacement part; and
(2) the vendee is regularly engaged in the business of renting, leasing, or licensing such property
for a consideration; and
(3) the item so claimed as "rental equipment" is not used by the person claiming the exemption
for any purpose other than rental, lease, or license for compensation, to an extent greater than
fifteen percent (15%) of its actual use.
"Repairer" means a person who restores or renews products, wares, or articles of manufacture.
"Resides within the Town" means in cases other than individuals, whose legal addresses are determinative of
residence, the engaging, continuing, or conducting of regular business activity within the Town.
"Restaurant" means any business activity where articles of food, drink, or condiment are customarily prepared
or served to patrons for consumption on or off the premises, also including bars, cocktail lounges, the dining
rooms of hotels, and all caterers. For the purposes of this Chapter, a "fast food" business, which includes
street vendors and mobile vendors selling in public areas or at entertainment or sports or similar events, who
prepares or sells food or drink for consumption on or off the premises is considered a "restaurant", and not a
"retailer".
"Retail Sale (Sale at Retail)" means the sale of tangible personal property, except the sale of tangible personal
property to a person regularly engaged in the business of selling such property.
"Retailer" means any person engaged or continuing in the business of sales of tangible personal property at
retail.
"Sale" means any transfer of title or possession, or both, exchange, barter, conditional or otherwise, in any
manner or by any means whatsoever, including consignment transactions and auctions, of property for a
consideration. "Sale" includes any transaction whereby the possession of such property is transferred but the
seller retains the title as security for the payment of the price. "Sale" also includes the fabrication of tangible
personal property for consumers who, in whole or in part, furnish either directly or indirectly the materials
used in such fabrication work.
"Solar Daylighting" means a device that is specifically designed to capture and redirect the visible portion of
the solar beam, while controlling the infrared portion, for use in illuminating interior building spaces in lieu of
artificial lighting.
"Solar Energy Device" means a system or series of mechanisms designed primarily to provide heating, to
provide cooling, to produce electrical power, to produce mechanical power, to provide solar daylighting or to
provide any combination of the foregoing by means of collecting and transferring solar generated energy into
such uses either by active or passive means, including wind generator systems that produce electricity. Solar
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energy systems may also have the capability of storing solar energy for future use. Passive systems shall
clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal
structure, such as a window.
"Speculative Builder" means either:
(1) an owner-builder who sells or contracts to sell, at anytime, improved real property (as
provided in Section 8A-416) consisting of:
(A) custom, model, or inventory homes, regardless of the stage of completion of such
homes; or
(B) improved residential or commercial lots without a structure; or
(2) an owner-builder who sells or contracts to sell improved real property, other than improved
real property specified in subsection (1) above:
(A) prior to completion; or
(B) before the expiration of twenty-four (24) months after the improvements of the real
property sold are substantially complete.
"Substantially Complete" means the construction contracting or reconstruction contracting:
(1) has passed final inspection or its equivalent; or
(2) certificate of occupancy or its equivalent has been issued; or
(3) is ready for immediate occupancy or use.
"Supplier" means any person who rents, leases, licenses, or makes sales of tangible personal property within
the Town, either directly to the consumer or customer or to wholesalers, jobbers, fabricators, manufacturers,
modifiers, assemblers, repairers, or those engaged in the business of providing services which involve the use,
sale, rental, lease, or license of tangible personal property.
"Tax Collector" means the Town Manager or his designee or agent for all purposes under this Chapter.
"Taxpayer" means any person liable for any tax under this Chapter.
"Taxpayer Problem Resolution Officer" means the individual designated by the Town to perform the duties
identified in Sections 8A-515 and 8A-516. In cities with a population of 50,000 or more, the Taxpayer
Problem Resolution Officer shall be an employee of the Town. In cities with a population of less than 50,000,
the Taxpayer Problem Resolution Officer need not be an employee of the Town. Regardless of whether the
Taxpayer Problem Resolution Officer is or is not an employee of the Town, the Taxpayer Problem Resolution
Officer shall have substantive knowledge of taxation. The identity of and telephone number for the Taxpayer
Problem Resolution Officer can be obtained from the Tax Collector.
"Telecommunication Service" means any service or activity connected with the transmission or relay of
sound, visual image, data, information, images, or material over a communications channel or any
combination of communications channels.
"Transient" means any person who either at the person's own expense or at the expense of another obtains
lodging space or the use of lodging space on a daily or weekly basis, or on any other basis for less than thirty
(30) consecutive days.
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"Utility Service" means the producing, providing, or furnishing of electricity, electric lights, current, power,
gas (natural or artificial), or water to consumers or ratepayers.
Section II. Model City Tax Code Section 8A-120 and Model Option #2 is repealed, with an
effective date of July 1, 2013.
Sec. ___-120. Definitions: food for home consumption.
(a) For the purposes of this Section only, the following definitions shall be applicable:
(1) "Eligible grocery business" means an establishment whose sales of food are such that it is
eligible to participate in the food stamp program established by the Food Stamp Act of 1977
(P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011 et seq.), according to regulations in effect
on January 1, 1979. An establishment is deemed eligible to participate in the Food Stamp
Program if it is authorized to participate in the program by the United States Department of
Agriculture Food and Nutrition Service Field Office on the effective date of this Section, or
if, prior to a reporting period for which the return is filed, such retailer proves to the
satisfaction of the Tax Collector that the establishment, based on the nature of the retailer's
food sales, could be eligible to participate in the food stamp program established by the Food
Stamp Act of 1977 according to regulations in effect on January 1, 1979.
(2) "Facilities for the consumption of food " means tables, chairs, benches, booths, stools,
counters, and similar conveniences, trays, glasses, dishes, or other tableware and parking
areas for the convenience of in-car consumption of food in or on the premises on which the
retailer conducts business.
(3) "Food for consumption on the premises" means any of the following:
(A) "Hot prepared food" as defined below.
(B) Hot or cold sandwiches.
(C) Food served by an attendant to be eaten at tables, chairs, benches, booths, stools,
counters, and similar conveniences and within parking areas for the convenience of
in-car consumption of food.
(D) Food served with trays, glasses, dishes, or other tableware.
(E) Beverages sold in cups, glasses, or open containers.
(F) Food sold by caterers.
(G) Food sold within the premises of theatres, movies, operas, shows of any type or
nature, exhibitions, concerts, carnivals, circuses, amusement parks, fairs, races,
contests, games, athletic events, rodeos, billiard and pool parlors, bowling alleys,
public dances, dance halls, boxing, wrestling and other matches, and any business
which charges admission, entrance, or cover fees for exhibition, amusement,
entertainment, or instruction.
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(H) Any items contained in subsections (a)(3)(A) through (G) above even though they
are sold on a "take-out" or "to go" basis, and whether or not the item is packaged,
wrapped, or is actually taken from the premises.
(4) "Hot prepared food" means those products, items, or ingredients of food which are prepared
and intended for consumption in a heated condition. "Hot prepared food" includes a
combination of hot and cold food items or ingredients if a single price has been established.
(5) "Premises" means the total space and facilities in or on which a vendor conducts business
and which are owned or controlled, in whole or in part, by a vendor or which are made
available for the use of customers of the vendor or group of vendors, including any building
or part of a building, parking lot, or grounds.
(b) "Food for home consumption" means all food, except food for consumption on the premises, if sold
by any of the following:
(1) An eligible grocery business.
(2) A person who conducts a business whose primary business is not the sale of food but who
sells food which is displayed, packaged, and sold in a similar manner as an eligible grocery
business.
(3) A person who sells food and does not provide or make available any facilities for the
consumption of food on the premises.
(4) A person who conducts a delicatessen business either from a counter which is separate from
the place and cash register where taxable sales are made or from a counter which has two
cash registers and which are used to record taxable and tax exempt sales, or a retailer who
conducts a delicatessen business who uses a cash register which has at least two tax
computing keys which are used to record taxable and tax exempt sales.
(5) (Reserved)
(6) Vending machines and other types of automatic retailers.
(7) A person's sales of food, drink and condiment for consumption within the premises of any
prison, jail or other institution under the jurisdiction of the State Department of Corrections,
the Department of Public Safety, the Department of Juvenile Corrections or a county sheriff.
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Section III. Model City Tax Code Section 8A-200 is amended as follows, with an effective date
of July 1, 2013.
Sec. 8A-200. Determination of gross income: in general.
(a) Gross income includes:
(1) the value proceeding or accruing from the sale of property, the providing of service, or both.
(2) the total amount of the sale, lease, license for use, or rental price at the time of such sale,
rental, lease, or license.
(3) all receipts, cash, credits, barter, exchange, reduction of or forgiveness of indebtedness, and
property of every kind or nature derived from a sale, lease, license for use, rental, or other
taxable activity.
(4) all other receipts whether payment is advanced prior to, contemporaneous with, or deferred
in whole or in part subsequent to the activity or transaction.
(b) Barter, exchange, trade-outs, or similar transactions are includable in gross income at the fair market
value of the service rendered or property transferred, whichever is higher, as they represent
consideration given for consideration received.
(c) No deduction or exclusion is allowed from gross income on account of the cost of the property sold,
the time value of money, expense of any kind or nature, losses, materials used, labor or service
performed, interest paid, or credits granted.
(D) FOR THE PURPOSES OF THIS CHAPTER THE TOTAL AMOUNT OF GROSS INCOME,
GROSS RECEIPTS OR GROSS PROCEEDS OF SALES FOR NUCLEAR FUEL SHALL BE
DEEMED TO BE THE VALUE OF THE PURCHASE PRICE OF URANIUM OXIDE USED IN
PRODUCING THE FUEL. THE TAX IMPOSED BY THIS CHAPTER MAY BE IMPOSED
ONLY ONCE FOR ANY ONE QUANTITY OR BATCH OF NUCLEAR FUEL REGARDLESS OF
THE NUMBER OF TRANSACTIONS OR FINANCING ARRANGEMENTS WHICH MAY
OCCUR WITH RESPECT TO THAT NUCLEAR FUEL.
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Section IV. Model City Tax Code Article III is REPEALED AND REPLACED IN ITS
ENTIRETY with the following sections 8A-300 through 8A-380, effective January 1, 2015.
Article III - Licensing and Recordkeeping
Sec. 8A-300. Licensing requirements.
(a) The following persons shall make application to the Tax Collector for a Transaction Privilege and
Use Tax License and no person shall engage or continue in business or engage in such activities until
he shall have such a license:
(1) Every person engaging or continuing in business activities within the city or town upon
which a Transaction Privilege Tax is imposed by this Chapter.
(2) Every person engaging or continuing in business within the city or town and storing or using
tangible personal property in this municipality upon which a Use Tax is imposed by this
Chapter.
(3) (Reserved)
(b) For the purpose of determining whether a Transaction Privilege and Use Tax License is required, a
person shall be deemed to be "engaging or continuing in business" within the city or town if:
(1) engaging in any activity as a principal or broker, the gross receipts of which may be subject
to Transaction Privilege Tax under Article IV of this Chapter, or
(2) maintaining within the city or town directly, or if a corporation by a subsidiary, an office,
distribution house, sales house, warehouse or other place of business; maintaining within the
city or town directly, or if a corporation by a subsidiary, any real or tangible personal
property; or having any agent or other representative operating within the city or town under
the authority of such person, or if a corporation by a subsidiary, irrespective of whether such
place of business, property, or agent or other representative is located here permanently or
temporarily, or
(3) soliciting sales, orders, contracts, leases, and other similar forms of business relationships,
within the city or town from customers, consumers, or users located within the city or town,
by means of salesmen, solicitors, agents, representatives, brokers, and other similar agents or
by means of catalogs or other advertising, whether such orders are received or accepted
within or without this city or town.
(4) A person shall also be deemed to be "engaging or continuing in business" if engaging in any
activity subject to Use Tax under Article VI of this Chapter for business purposes.
Individuals who acquire items subject to Use Tax for their own personal use or their family's
personal use are not required to obtain a license.
(5) (Reserved)
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(c) A person engaging in more than one activity subject to Transaction Privilege Tax at any one business
location is not required to obtain a separate license for each activity, provided that, at the time such
person makes application for a license, he shall list on such application each category of activity in
which he is engaged.
(d) The licensee shall inform the Tax Collector of any changes in his business activities, location, or
mailing address within thirty (30) days.
(e) Limitation. The issuance of a Transaction Privilege and Use Tax License by the Tax Collector shall
in no way be construed as permission to operate a business activity in violation of any other law or
regulation to which such activity may be subject.
(f) Casual activity. For the purposes of this Chapter, individuals engaging in a “casual activity or sale”
are not subject to the license requirements imposed under this Article provided that they are only
engaged in private sales activities, such as the sale of a personal automobile or garage sale, on no
more than three separate occasions during any calendar year.
Sec. 8A-310. Licensing: special requirements.
(a) Partnerships. Application for a Transaction Privilege and Use Tax License for a partnership engaging
or continuing in business shall provide, as a minimum, the names and addresses of all general
partners. Licenses issued to persons engaging in business as partners, limited or general, shall be in
the name of the partnership.
(b) Limited Liability Companies. Application for a Transaction Privilege and Use Tax License for a
Limited Liability Company (LLC) engaging or continuing in business shall provide, as a minimum,
the names and addresses of all members and the manager. Licenses issued to persons engaging in
business as Limited Liability Companies, shall be in the name of the LLC.
(c) Corporations. Application for a Transaction Privilege and Use Tax License for a corporation
engaging or continuing in business shall provide, as a minimum, the names and addresses of both the
Chief Executive Officer and Chief Financial Officer of the corporation. Licenses issued to persons
engaging in business as corporations shall be in the name of the corporation.
(d) Multiple Locations or Multiple Business Names. A person engaging or continuing in one or more
businesses at two (2) or more locations or under two (2) or more business names shall procure a
license for each such location or business name. A "location" is a place of a separate business
establishment.
(e) Real Property Rental, Leasing, and Licensing for Use. In all cases the Transaction Privilege and Use
Tax License shall be issued only to the owner of the real property regardless of the owner engaging a
property manager or other broker to oversee the owner’s business activity including filing tax returns
on behalf of the owner. Each rental property that can be independently sold or transferred is deemed
to be a separate business establishment. Each platted parcel of real property subject to the tax
imposed by this Chapter is deemed to be a separate business establishment and requires a separate
license, regardless of the number of rental units located on that platted parcel. If one structure is
located on multiple parcels in a manner such that ownership of an individual parcel cannot be sold or
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transferred without requiring alteration to divide the structure, one license shall be required for all
affected parcels.
Sec. 8A-320. License fees; annual renewal; renewal fees.
(a) The Transaction Privilege and Use Tax License shall be valid upon receipt of a non-refundable
license fee of two dollars ($2.00), except for a license to engage in the business activity of residential
or commercial real property rental, leasing, and licensing for use as separately identified in this
Section. The Transaction Privilege and Use Tax License shall be valid only for the calendar year in
which it is issued unless renewed each year by filing the appropriate application for license renewal
and paying an annual license renewal fee of zero dollars ($0.00) for each license, subject to the
limitations in A.R.S. 42-5005. Such annual renewal fee shall be due and payable on January 1 of each
year and shall be considered delinquent if not paid and received on or before the last business day of
January.
(b) The Transaction Privilege and Use Tax License to engage in the business activity of residential real
property rental, leasing, and licensing for use shall be valid only upon receipt of a non-refundable
license fee of two dollars ($2.00). The Transaction Privilege and Use Tax License shall be valid only
for the calendar year in which it is issued unless renewed each year by filing the appropriate
application for license renewal and paying an annual license renewal fee of zero dollars ($0.00) for
each license, subject to the limitations in A.R.S. 42-5005. Such fee shall be due and payable on
January 1 of each year and shall be considered delinquent if not paid and received on or before the
last business day of January.
(c) The Transaction Privilege and Use Tax License to engage in the business activity of commercial real
property rental, leasing, and licensing for use shall be valid only upon receipt of a non-refundable
license fee of two dollars ($2.00). The Transaction Privilege and Use Tax License shall be valid only
for the calendar year in which it is issued unless renewed each year by filing the appropriate
application for license renewal and paying an annual license renewal fee of zero dollars ($0.00) for
each license, subject to the limitations in A.R.S. 42-5005. Such fee shall be due and payable on
January 1 of each year and shall be considered delinquent if not paid and received on or before the
last business day of January.
Sec. 8A-330. Licensing: duration; transferability; display; penalties; penalty waiver; relicensing; fees
collectible as if taxes.
(a) The Transaction Privilege and Use Tax License shall be valid only for the calendar year in which it is
issued unless renewed each year by filing the appropriate application for license renewal and paying
the applicable license renewal fee for each license, subject to the limitations in A.R.S. 42-5005. Such
fee shall be due and payable on January 1 of each year and shall be considered delinquent if not paid
and received on or before the last business day of January. Application and payment of the annual fee
must be received in the Tax Collector's office to be deemed paid and received.
(b) The Transaction Privilege and Use Tax License shall be nontransferable between owners or locations,
and shall be on display to the public in the licensee's place of business.
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(c) Any person required to be licensed under this Chapter who fails to obtain a license on or before
conducting any business activity requiring such license shall be subject to the license fees due for
each year in business plus a penalty in the amount of fifty percent (50%) of the applicable fee for
each period of time for which such fee would have been imposed, from and after the date on which
such activity commenced until paid. This penalty shall be in addition to any other penalty imposed
under this Chapter and must be paid prior to the issuance of any license. License fee penalties may be
waived by the Tax Collector subject to the same terms as the waiver of tax penalties as provided for
in Section 8A-540.
(d) Any licensee who fails to renew his license on or before the due date shall be deemed to be operating
without a license following such due date, and shall be subject to all penalties imposed under this
Chapter against persons required to be licensed and operating without a license. The non-licensed
status may be removed by payment of the annual license fee for each year or portion of a year he
operated without a license, plus a license fee penalty of 50% of the license fee due for each year.
License fee penalties may be waived by the Tax Collector subject to the same terms as the waiver of
tax penalties as provided for in Section 8A-540.
(e) Any licensee who permits his license to expire through cancellation as provided in Section 8A-340,
by his request for cancellation, by surrender of the license, or by the cessation of the business activity
for which the license was issued, and who thereafter applies for a license, shall be granted a new
license as a new applicant and shall pay the current license fee imposed under Section 8A-320.
(f) Any licensee who needs a copy of his Transaction Privilege and Use Tax License which is still in
effect shall be charged the current license fee for each reissuance of a license.
(g) Any person conducting a business activity subject to licensing without obtaining a Transaction
Privilege and Use Tax License shall be liable to the Town for all applicable fees and penalties and
shall be subject to the provisions of Sections 8A-580 and 8A-590, to the same extent as if such fees
and penalties were taxes and penalties under such Sections.
Sec. 8A-340. Licensing: cancellation; revocation.
(a) Cancellation. The Tax Collector may cancel the Transaction Privilege and Use Tax License of any
licensee as "inactive" if the taxpayer, required to report monthly, has neither filed any return nor
remitted any taxes imposed by this Chapter for a period of six (6) consecutive months; or, if required
to report quarterly, has neither filed any return nor remitted any taxes imposed by this Chapter for
two (2) consecutive quarters; or, if required to report annually, has neither filed any return nor
remitted any taxes imposed by this Chapter when such annual report and tax are due to be filed with
and remitted to the Tax Collector.
(b) Revocation. If any licensee fails to pay any tax, interest, penalty, fee, or sum required to be paid
under this Chapter, or if such licensee fails to comply with any other provisions of this Chapter, the
Tax Collector may revoke the Transaction Privilege and Use Tax License of said licensee.
(c) Notice and Hearing. The Tax Collector shall deliver notice to such licensee of cancellation or
revocation of the Transaction Privilege and Use Tax License. If the licensee requests a hearing within
twenty (20) days of receipt of such notice, he shall be granted a hearing before the Tax Collector.
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(d) After cancellation or revocation of a taxpayer's license, the taxpayer shall not be issued a new license
until all reports have been filed; all fees, taxes, interest, and penalties due have been paid; and he is in
compliance with all provisions of this Chapter.
Sec. 8A-350. Operating without a license.
It shall be unlawful for any person who is required by this Chapter to obtain a Transaction Privilege and Use
Tax License to engage in or continue in business without a license. The Tax Collector shall assess any
delinquencies in tax, interest, and penalties which may apply against such person upon any transactions
subject to the taxes imposed by this Chapter.
Sec. 8A-360. Recordkeeping requirements.
(a) It shall be the duty of every person subject to the tax imposed by this Chapter to keep and preserve
suitable records and such other books and accounts as may be necessary to determine the amount of
tax for which he is liable under this Chapter. The books and records must contain, at a minimum,
such detail and summary information as may be required by this Article; or when records are
maintained within an electronic data processing (EDP) system, the requirements established by the
Arizona Department of Revenue for privilege tax filings will be accepted. It shall be the duty of every
person to keep and preserve such books and records for a period equal to the applicable limitation
period for assessment of tax, and all such books and records shall be open for inspection by the Tax
Collector during any business day.
(b) The Tax Collector may direct, by letter, a specific taxpayer to keep specific other books, records, and
documents. Such letter directive shall apply:
(1) only for future reporting periods, and
(2) only by express determination of the Tax Collector that such specific recordkeeping is
necessary due to the inability of the taxing jurisdiction to conduct an adequate examination
of the past activities of the taxpayer, which inability resulted from inaccurate or inadequate
books, records, or documentation maintained by the taxpayer.
Sec. 8A-362. Recordkeeping: income.
The minimum records required for persons having gross income subject to, or exempt or excluded from, tax
by this Chapter must show:
(a) The gross income of the taxpayer attributable to any activity occurring in whole or in part in the
Town.
(b) The gross income taxable under this Chapter, divided into categories as stated in the official Town
tax return.
(c) The gross income subject to Arizona Transaction Privilege Taxes, divided into categories as stated in
the official State tax return.
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(d) The gross income claimed to be exempt, and with respect to each activity or transaction so claimed:
(1) If the transaction is claimed to be exempt as a sale for resale or as a sale, rental, lease, or
license for use of rental equipment:
(A) The Town Privilege License number and State Transaction Privilege Tax License
number of the customer (or the equivalent Town, if applicable, and state tax
numbers of the Town and state where the customer resides), and
(B) The name, business address, and business activity of the customer, and
(C) Evidence sufficient to persuade a reasonably prudent businessman that the
transaction is believed to be in good faith a purchase for resale, or a purchase, rental,
lease, or license for use of rental equipment, by the vendee in the ordinary and
regular course of his business activity, as provided by Regulation.
(2) If the transaction is claimed to be exempt for any other reason:
(A) The name, business address, and business activity of the customer, and
(B) Evidence which would establish the applicability of the exemption to a reasonably
prudent businessman acting in good faith. Ordinary business documentation which
would reasonably indicate the applicability of an exemption shall be sufficient to
relieve the person on whom the tax would otherwise be imposed from liability
therein, if he acts in good faith as provided by Regulation.
(e) With respect to those allowed deductions or exclusions for tax collected or charges for delivery or
other direct customer services, where applicable, evidence that the deductible income has been
separately stated and shown on the records of the taxpayer and on invoices or receipts provided to the
customer. All other deductions, exemptions, and exclusions shall be separately shown and
substantiated.
(f) With respect to special classes and activities, such other books, records, and documentation as the
Tax Collector, by regulation, shall deem necessary for specific classes of taxpayer by reason of the
specialized business activity of any such class.
(g) In all cases, the books and records of the taxpayer shall indicate both individual transaction amounts
and totals for each reporting period for each category of taxable, exempt, and excluded income
defined by this Chapter.
Sec. 8A-364. Recordkeeping: expenditures.
The minimum records required for persons having expenditures, costs, purchases and rental or lease or license
expenses subject to, or exempt or excluded from, tax by this Chapter are:
(a) The total price of all goods acquired for use or storage in the Town.
(b) The date of acquisition and the name and business address of the seller or lessor of all goods acquired
for use or storage in the Town.
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(c) Documentation of taxes, freight, and direct customer service labor separately charged and paid for
each purchase, rental, lease, or license.
(d) The gross price of each acquisition claimed as exempt from tax, and with respect to each transaction
so claimed, sufficient evidence to satisfy the Tax Collector that the exemption claimed is applicable.
(e) As applicable to each taxpayer, documentation sufficient to the Tax Collector, so that he may
ascertain:
(1) All construction expenditures and all Privilege and Use Taxes claimed paid, relating to
owner-builders and speculative builders.
(2) Disbursement of collected gratuities and related payroll information required of restaurants.
(3) (Reserved)
(A) (Reserved)
(B) (Reserved)
(4) The validity of any claims of proof of exemption.
(5) A claimed alternative prior value for reconstruction.
(6) All claimed exemptions to the Use Tax imposed by Article VI of this Chapter.
(7) (Reserved)
(8) Payments of tax to the Arizona Department of Transportation and computations therefor,
when a motor-vehicle transporter claims such the exemption.
(9) (Reserved)
(f) Any additional documentation as the Tax Collector, by Regulation, shall deem necessary for any
specific class of taxpayer by reason of the specialized business activity of specific exemptions
afforded to that class of taxpayer.
(g) In all cases, the books and records of the taxpayer shall indicate both individual transaction amounts
and totals for each reporting period for each category of taxable, exempt, and excluded expenditures
as defined by this Chapter.
Sec. 8A-366. Recordkeeping: out-of-Town and out-of-State sales.
(a) Out-of-Town Sales. Any person engaging or continuing in a business who claims out-of-Town sales
shall maintain and keep accounting records or books indicating separately the gross income from the
sales of tangible personal property from such out-of-Town branches or locations.
(b) Out-of-State sales. Persons engaged in a business claiming out-of-State sales shall maintain
accounting records or books indicating for each out-of-State sale the following documentation:
(1) documentation of location of the buyer at the time of order placement; and
(2) shipping, delivery, or freight documents showing where the buyer took delivery; and
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(3) documentation of intended location of use or storage of the tangible personal property sold to
such buyer.
Sec. 8A-370. Recordkeeping: claim of exclusion, exemption, deduction, or credit; documentation;
liability.
(a) All deductions, exclusions, exemptions and credits provided in this Chapter are conditional upon
adequate proof and documentation of such as may be required under A.R.S. Section 42-5022 or by
this Chapter or Regulation.
(b) Any person who claims and receives an exemption, deduction, exclusion, or credit to which he is not
entitled under this Chapter, shall be subject to, liable for, and pay the tax on the transaction as if the
vendor subject to the tax had passed the burden of the payment of the tax to the person wrongfully
claiming the exemption. A person who wrongfully claimed such exemption shall be treated as if he is
delinquent in the payment of the tax and shall be subject to interest and penalties upon such
delinquency. However, if the tax is collected from the vendor on such transaction it shall not again be
collected from the person claiming the exemption, or if collected from the person claiming the
exemption it shall not also be collected from the vendor.
Sec. 8A-372. Proof of exemption: sale for resale; sale, rental, lease, or license of rental equipment.
A claim of purchase for resale or of purchase, rental, lease, or license for rent, lease, or license is valid only if
the evidence is sufficient to persuade a reasonably prudent businessman that the particular item is being
acquired for resale or for rental, lease, or license in the ordinary course of business. The fact that the acquiring
person possesses a Privilege License number, and makes a verbal claim of "sale for resale or lease" or "lease
for re-lease" does not meet this burden and is insufficient to justify an exemption. The "reasonable evidence"
must be evidence which exists objectively, and not merely in the mind of the vendor, that the property being
acquired is normally sold, rented, leased, or licensed by the acquiring person in the ordinary course of
business. Failure to obtain such reasonable evidence at the time of the transaction will be a basis for
disallowance of any claimed deduction on returns filed for such transactions.
Sec. 8A-380. Inadequate or unsuitable records.
In the event the records provided by the taxpayer are considered by the Tax Collector to be inadequate or
unsuitable to determine the amount of the tax for which such taxpayer is liable under the provisions of this
Chapter, it is the responsibility of the taxpayer either:
(a) to provide such other records required by this Chapter or Regulation; or
(b) to correct or to reconstruct his records, to the satisfaction of the Tax Collector.
This change also ELIMINATES the following Regulations, effective January 1, 2015:
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Regulation 8A-300.1. Who must apply for a license.
Regulation 8A-300.2. (Reserved)
Regulation 8A-310.1. (Reserved)
Regulation 8A-310.2. (Reserved)
Regulation 8A-310.3. (Reserved)
Regulation 8A-350.1. Recordkeeping: income.
Regulation 8A-350.2. Recordkeeping: expenditures.
Regulation 8A-350.3. Recordkeeping: out-of-City and out-of-State sales.
Regulation 8A-360.1. Proof of exemption: sale for resale; sale, rental, lease or license of rental
equipment.
Regulation 8A-360.2. Proof of exemption: exemption certificate.
Section V. Model City Tax Code Section 8A-422, Local Option #LL is amended as follows to
correct an obsolete reference, with an effective date of July 20, 2011.
SEC. 8A-422. (RESERVED)
Section VI. Model City Tax Code Section 8A-425 is amended as follows to eliminate Local
Option #MM, which will no longer be used by any city or town, effective July 1, 2012. New
Subsection (7) is added with an effective date of September 21, 2006.
Sec. 8A-425. Job printing.
(a) The tax rate shall be at an amount equal to two and six-tenths percent (2.6%) of the gross income
from the business activity upon every person engaging or continuing in the business of job printing,
which includes engraving of printing plates, embossing, copying, micrographics, and photo
reproduction.
(b) The tax imposed by this Section shall not apply to:
(1) job printing purchased for the purpose of resale by the purchaser in the form supplied by the
job printer.
(2) out-of-Town sales.
(3) out-of-State sales.
(4) (Reserved)
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(5) sales of job printing to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property sold is for use in activities
resulting in gross income from unrelated business income as that term is defined in 26 U.S.C.
Section 512.
(6) (Reserved)
(7) SALES OF POSTAGE AND FREIGHT EXCEPT THAT THE AMOUNT DEDUCTED
SHALL NOT EXCEED THE ACTUAL POSTAGE AND FREIGHT EXPENSE THAT IS
PAID TO THE UNITED STATES POSTAL SERVICE OR A COMMERCIAL DELIVERY
SERVICE AND THAT IS SEPARATELY ITEMIZED BY THE TAXPAYER ON THE
CUSTOMER'S INVOICE AND IN THE TAXPAYER'S RECORDS.
Section VII. Model City Tax Code Section 8A-445 is amended as follows, with an effective date
of July 20, 2011.
Sec. 8A-445. Rental, leasing, and licensing for use of real property.
(a) The tax rate shall be at an amount equal to one and six-tenths percent (1.6%) of the gross income
from the business activity upon every person engaging or continuing in the business of leasing or
renting real property located within the Town for a consideration, to the tenant in actual possession,
or the licensing for use of real property to the final licensee located within the Town for a
consideration including any improvements, rights, or interest in such property; provided further that:
(1) Payments made by the lessee to, or on behalf of, the lessor for property taxes, repairs, or
improvements are considered to be part of the taxable gross income.
(2) Charges for such items as telecommunications, utilities, pet fees, or maintenance are
considered to be part of the taxable gross income.
(3) However, if the lessor engages in telecommunication activity, as evidenced by installing
individual metering equipment and by billing each tenant based upon actual usage, such
activity is taxable under Section 8A-470.
(b) If individual utility meters have been installed for each tenant and the lessor separately charges each
single tenant for the exact billing from the utility company, such charges are exempt.
(c) Charges by a qualifying hospital, qualifying community health center or a qualifying health care
organization to patients of such facilities for use of rooms or other real property during the course of
their treatment by such facilities are exempt.
(d) Charges for joint pole usage by a person engaged in the business of providing or furnishing utility or
telecommunication services to another person engaged in the business of providing or furnishing
utility or telecommunication services are exempt from the tax imposed by this Section.
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(e) Exempt from the tax imposed by this Section is gross income derived from the rental, leasing, or
licensing for use of real property to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property so rented, leased, or licensed is for use
in activities resulting in gross income from unrelated business income as that term is defined in 26
U.S.C. Section 512.
(f) (Reserved)
(g) (Reserved)
(h) (Reserved)
(i) (Reserved)
(j) Exempt from the tax imposed by this Section is gross income derived from the activities taxable
under Section 8A-444 of this code.
(k) (Reserved)
(l) (Reserved)
(m) (Reserved)
(n) Notwithstanding the provisions of Section 8A-200(b), the fair market value of one (1) apartment, in
an apartment complex provided rent free to an employee of the apartment complex is not subject to
the tax imposed by this Section. For an apartment complex with more than fifty (50) units, an
additional apartment provided rent free to an employee for every additional fifty (50) units is not
subject to the tax imposed by this Section.
(o) Income derived from incarcerating or detaining prisoners who are under the jurisdiction of the United
States, this State or any other state or a political subdivision of this State or of any other state in a
privately operated prison, jail or detention facility is exempt from the tax imposed by this Section.
(p) Charges by any hospital, any licensed nursing care institution, or any kidney dialysis facility to
patients of such facilities for the use of rooms or other real property during the course of their
treatment by such facilities are exempt.
(q) Charges to patients receiving "personal care" or "directed care", by any licensed assisted living
facility, licensed assisted living center or licensed assisted living home as defined and licensed
pursuant to Chapter 4 Title 36 Arizona Revised Statutes and Title 9 of the Arizona Administrative
Code are exempt.
(r) Income received from the rental of any "low-income unit" as established under Section 42 of the
Internal Revenue Code, including the low-income housing credit provided by IRC Section 42, to the
extent that the collection of tax on rental income causes the "gross rent" defined by IRC Section 42 to
exceed the income limitation for the low-income unit is exempt. This exemption also applies to
income received from the rental of individual rental units subject to statutory or regulatory "low-
income unit" rent restrictions similar to IRC Section 42 to the extent that the collection of tax from
the tenant causes the rental receipts to exceed a rent restriction for the low-income unit. This
subsection also applies to rent received by a person other than the owner or lessor of the low-income
unit, including a broker. This subsection does not apply unless a taxpayer maintains the
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documentation to support the qualification of a unit as a low-income unit, the "gross rent" limitation
for the unit and the rent received from that unit.
(s) The gross proceeds of sales or gross income derived from a commercial lease in which a reciprocal
insurer or a corporation leases real property to an affiliated corporation is exempt. For the purposes of
this paragraph:
(1) “Affiliated corporation” means a corporation that meets one of the following conditions:
(A) The corporation owns or controls at least eighty per cent of the lessor.
(B) The corporation is at least eighty per cent owned or controlled by the lessor.
(C) The corporation is at least eighty per cent owned or controlled by a corporation that
also owns or controls at least eighty per cent of the lessor.
(D) The corporation is at least eighty per cent owned or controlled by a corporation that
is at least eighty per cent owned or controlled by a reciprocal insurer.
(2) For the purposes of subsection (1), ownership and control are determined by reference to the
voting shares of a corporation.
(3) “Reciprocal insurer” has the same meaning as prescribed in A.R.S. Section 20-762.
(S) THE GROSS PROCEEDS OF A COMMERCIAL LEASE OF REAL PROPERTY BETWEEN
AFFILIATED COMPANIES, BUSINESSES, PERSONS OR RECIPROCAL INSURERS ARE
EXEMPT. FOR THE PURPOSES OF THIS PARAGRAPH:
(1) "AFFILIATED COMPANIES, BUSINESSES, PERSONS OR RECIPROCAL INSURERS"
MEANS THE LESSOR HOLDS A CONTROLLING INTEREST IN THE LESSEE, THE
LESSEE HOLDS A CONTROLLING INTEREST IN THE LESSOR, AN AFFILIATED
ENTITY HOLDS A CONTROLLING INTEREST IN BOTH THE LESSOR AND THE
LESSEE OR AN UNRELATED PERSON HOLDS A CONTROLLING INTEREST IN
BOTH THE LESSOR AND LESSEE.
(2) "CONTROLLING INTEREST" MEANS DIRECT OR INDIRECT OWNERSHIP OF AT
LEAST EIGHTY PER CENT OF THE VOTING SHARES OF A CORPORATION OR OF
THE INTERESTS IN A COMPANY, BUSINESS OR PERSON OTHER THAN A
CORPORATION.
(3) "RECIPROCAL INSURER" HAS THE SAME MEANING AS PRESCRIBED IN A.R.S.
SECTION 20-762.
Section VIII. Model City Tax Code Section 8A-450 is amended as follows, with an effective date
of September 1, 2004.
Sec. 8A-450. Rental, leasing, and licensing for use of tangible personal property.
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(a) The tax rate shall be at an amount equal to two and six-tenths percent (2.6%) of the gross income
from the business activity upon every person engaging or continuing in the business of leasing,
licensing for use, or renting tangible personal property for a consideration, including that which is
semi-permanently or permanently installed within the Town as provided by Regulation.
(b) Special provisions relating to long-term motor vehicle leases. A lease transaction involving a motor
vehicle for a minimum period of twenty-four (24) months shall be considered to have occurred at the
location of the motor vehicle dealership, rather than the location of the place of business of the lessor,
even if the lessor's interest in the lease and its proceeds are sold, transferred, or otherwise assigned to
a lease financing institution; provided further that the city or town where such motor vehicle
dealership is located levies a Privilege Tax or an equivalent excise tax upon the transaction.
(c) Gross income derived from the following transactions shall be exempt from Privilege Taxes imposed
by this Section:
(1) rental, leasing, or licensing for use of tangible personal property to persons engaged or
continuing in the business of leasing, licensing for use, or rental of such property.
(2) rental, leasing, or licensing for use of tangible personal property that is semi-permanently or
permanently installed within another city or town that levies an equivalent excise tax on the
transaction.
(3) rental, leasing, or licensing for use of film, tape, or slides to a theater or other person taxed
under Section 8A-410, or to a radio station, television station, or subscription television
system.
(4) rental, leasing, or licensing for use of the following:
(A) prosthetics.
(B) income-producing capital equipment.
(C) mining and metallurgical supplies.
These exemptions include the rental, leasing, or licensing for use of tangible personal
property which, if it had been purchased instead of leased, rented, or licensed by the lessee or
licensee, would qualify as income-producing capital equipment or mining and metallurgical
supplies.
(5) rental, leasing, or licensing for use of tangible personal property to a qualifying hospital,
qualifying community health center or a qualifying health care organization, except when the
property so rented, leased, or licensed is for use in activities resulting in gross income from
unrelated business income as that term is defined in 26 U.S.C. Section 512 or rental, leasing,
or licensing for use of tangible personal property in this State by a nonprofit charitable
organization that has qualified under Section 501(c)(3) of the United States Internal Revenue
Code and that engages in and uses such property exclusively for training, job placement or
rehabilitation programs or testing for mentally or physically handicapped persons.
(6) separately billed charges for delivery, installation, repair, and/or maintenance as provided by
Regulation.
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(7) charges for joint pole usage by a person engaged in the business of providing or furnishing
utility or telecommunication services to another person engaged in the business of providing
or furnishing utility or telecommunication services.
(8) (Reserved)
(9) rental, leasing, or licensing of aircraft that would qualify as aircraft acquired for use outside
the State, as prescribed by Regulation, if such rental, leasing, or licensing had been a sale.
(10) rental, leasing and licensing for use of an alternative fuel vehicle if such vehicle was
manufactured as a diesel fuel vehicle and converted to operate on alternative fuel and
equipment that is installed in a conventional diesel fuel motor vehicle to convert the vehicle
to operate on an alternative fuel, as defined in A.R.S. Section 1-215.
(11) rental, leasing, and licensing for use of solar energy devices, for taxable periods beginning
from and after July 1, 2008. The lessor shall register with the department of revenue as a
solar energy retailer. By registering, the lessor acknowledges that it will make its books and
records relating to leases of solar energy devices available to the Department of Revenue and
Town, as applicable, for examination.
(12) LEASING OR RENTING CERTIFIED IGNITION INTERLOCK DEVICES INSTALLED
PURSUANT TO THE REQUIREMENTS PRESCRIBED BY A.R.S. SECTION 28-1461.
FOR THE PURPOSES OF THIS PARAGRAPH, "CERTIFIED IGNITION INTERLOCK
DEVICE" HAS THE SAME MEANING PRESCRIBED IN A.R.S. SECTION 28-1301.
Section IX. Model City Tax Code Section 8A-460 is amended as follows, with an effective date
of October 1, 2007.
Sec. 8A-460. Retail sales: measure of tax; burden of proof; exclusions.
(a) The tax rate shall be at an amount equal to two and six-tenths percent (2.6%) of the gross income
from the business activity upon every person engaging or continuing in the business of selling
tangible personal property at retail.
(b) The burden of proving that a sale of tangible personal property is not a taxable retail sale shall be
upon the person who made the sale.
(c) Exclusions. For the purposes of this Chapter, sales of tangible personal property shall not include:
(1) sales of stocks, bonds, options, or other similar materials.
(2) sales of lottery tickets or shares pursuant to Article I, Chapter 5, Title 5, Arizona Revised
Statutes.
(3) sales of platinum, bullion, or monetized bullion, except minted or manufactured coins
transferred or acquired primarily for their numismatic value as prescribed by Regulation.
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(4) gross income derived from the transfer of tangible personal property which is specifically
included as the gross income of a business activity upon which another Section of this
Article imposes a tax, shall be considered gross income of that business activity, and are not
includable as gross income subject to the tax imposed by this Section.
(5) sales by professional or personal service occupations where such sales are inconsequential
elements of the service provided.
(6) SALES OF CASH EQUIVALENTS. THE GROSS PROCEEDS OF SALES OR GROSS
INCOME DERIVED FROM THE REDEMPTION OF ANY CASH EQUIVALENT BY
THE HOLDER AS A MEANS OF PAYMENT FOR GOODS OR SERVICES THAT ARE
TAXABLE UNDER THIS ARTICLE IS SUBJECT TO THE TAX. "CASH
EQUIVALENTS" MEANS ITEMS OR INTANGIBLES, WHETHER OR NOT
NEGOTIABLE, THAT ARE SOLD TO ONE OR MORE PERSONS, THROUGH WHICH
A VALUE DENOMINATED IN MONEY IS PURCHASED IN ADVANCE AND MAY
BE REDEEMED IN FULL OR IN PART FOR TANGIBLE PERSONAL PROPERTY,
INTANGIBLES OR SERVICES. CASH EQUIVALENTS INCLUDE GIFT CARDS,
STORED VALUE CARDS, GIFT CERTIFICATES, VOUCHERS, TRAVELER'S
CHECKS, MONEY ORDERS OR OTHER INSTRUMENTS, ORDERS OR ELECTRONIC
MECHANISMS, SUCH AS AN ELECTRONIC CODE, PERSONAL IDENTIFICATION
NUMBER OR DIGITAL PAYMENT MECHANISM, OR ANY OTHER PREPAID
INTANGIBLE RIGHT TO ACQUIRE TANGIBLE PERSONAL PROPERTY,
INTANGIBLES OR SERVICES IN THE FUTURE, WHETHER FROM THE SELLER OF
THE CASH EQUIVALENT OR FROM ANOTHER PERSON. CASH EQUIVALENTS DO
NOT INCLUDE EITHER OF THE FOLLOWING:
(A) ITEMS OR INTANGIBLES THAT ARE SOLD TO ONE OR MORE PERSONS,
THROUGH WHICH A VALUE IS NOT DENOMINATED IN MONEY.
(B) PREPAID CALLING CARDS OR PREPAID AUTHORIZATION NUMBERS
FOR TELECOMMUNICATIONS SERVICES MADE TAXABLE BY
SUBSECTION (g) OF THIS SECTION.
(d) (Reserved)
(e) When this Town and another Arizona city or town with an equivalent excise tax could claim nexus
for taxing a retail sale, the city or town where the permanent business location of the seller at which
the order was received shall be deemed to have precedence, and for the purposes of this Chapter such
city or town has sole and exclusive right to such tax.
(f) The appropriate tax liability for any retail sale where the order is received at a permanent business
location of the seller located in this Town or in an Arizona city or town that levies an equivalent
excise tax shall be at the tax rate of the city or town of such seller's location.
(g) Retail sales of prepaid calling cards or prepaid authorization numbers for telecommunications
services, including sales of reauthorization of a prepaid card or authorization number, are subject to
tax under this Section.
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Section X. Model City Tax Code Section 8A-462 is added as follows, with an effective date of
July 1, 2013.
SEC. 8A-462. RETAIL SALES: FOOD FOR HOME CONSUMPTION.
(a) THE TAX RATE SHALL BE AT AN AMOUNT EQUAL TO TWO AND SIX-TENTHS
PERCENT (2.6%) OF THE GROSS INCOME FROM THE BUSINESS ACTIVITY UPON EVERY
PERSON ENGAGING OR CONTINUING IN THE BUSINESS OF SELLING FOOD FOR HOME
CONSUMPTION AT RETAIL.
(b) FOR THE PURPOSES OF THIS SECTION ONLY, THE FOLLOWING DEFINITIONS SHALL
BE APPLICABLE:
(1) "ELIGIBLE GROCERY BUSINESS" MEANS AN ESTABLISHMENT WHOSE SALES
OF FOOD ARE SUCH THAT IT IS ELIGIBLE TO PARTICIPATE IN THE FOOD
STAMP PROGRAM ESTABLISHED BY THE FOOD STAMP ACT OF 1977 (P.L. 95-
113; 91 STAT. 958.7 U.S.C. SECTION 2011 ET SEQ.), ACCORDING TO
REGULATIONS IN EFFECT ON JANUARY 1, 1979. AN ESTABLISHMENT IS
DEEMED ELIGIBLE TO PARTICIPATE IN THE FOOD STAMP PROGRAM IF IT IS
AUTHORIZED TO PARTICIPATE IN THE PROGRAM BY THE UNITED STATES
DEPARTMENT OF AGRICULTURE FOOD AND NUTRITION SERVICE FIELD
OFFICE ON THE EFFECTIVE DATE OF THIS SECTION, OR IF, PRIOR TO A
REPORTING PERIOD FOR WHICH THE RETURN IS FILED, SUCH RETAILER
PROVES TO THE SATISFACTION OF THE TAX COLLECTOR THAT THE
ESTABLISHMENT, BASED ON THE NATURE OF THE RETAILER'S FOOD SALES,
COULD BE ELIGIBLE TO PARTICIPATE IN THE FOOD STAMP PROGRAM
ESTABLISHED BY THE FOOD STAMP ACT OF 1977 ACCORDING TO
REGULATIONS IN EFFECT ON JANUARY 1, 1979.
(2) "FACILITIES FOR THE CONSUMPTION OF FOOD" MEANS TABLES, CHAIRS,
BENCHES, BOOTHS, STOOLS, COUNTERS, AND SIMILAR CONVENIENCES,
TRAYS, GLASSES, DISHES, OR OTHER TABLEWARE AND PARKING AREAS FOR
THE CONVENIENCE OF IN-CAR CONSUMPTION OF FOOD IN OR ON THE
PREMISES ON WHICH THE RETAILER CONDUCTS BUSINESS.
(3) "FOOD FOR CONSUMPTION ON THE PREMISES” MEANS ANY OF THE
FOLLOWING:
(A) "HOT PREPARED FOOD" AS DEFINED BELOW.
(B) HOT OR COLD SANDWICHES.
(C) FOOD SERVED BY AN ATTENDANT TO BE EATEN AT TABLES, CHAIRS,
BENCHES, BOOTHS, STOOLS, COUNTERS, AND SIMILAR
CONVENIENCES AND WITHIN PARKING AREAS FOR THE CONVENIENCE
OF IN-CAR CONSUMPTION OF FOOD.
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(D) FOOD SERVED WITH TRAYS, GLASSES, DISHES, OR OTHER
TABLEWARE.
(E) BEVERAGES SOLD IN CUPS, GLASSES, OR OPEN CONTAINERS.
(F) FOOD SOLD BY CATERERS.
(G) FOOD SOLD WITHIN THE PREMISES OF THEATRES, MOVIES, OPERAS,
SHOWS OF ANY TYPE OR NATURE, EXHIBITIONS, CONCERTS,
CARNIVALS, CIRCUSES, AMUSEMENT PARKS, FAIRS, RACES,
CONTESTS, GAMES, ATHLETIC EVENTS, RODEOS, BILLIARD AND POOL
PARLORS, BOWLING ALLEYS, PUBLIC DANCES, DANCE HALLS,
BOXING, WRESTLING AND OTHER MATCHES, AND ANY BUSINESS
WHICH CHARGES ADMISSION, ENTRANCE, OR COVER FEES FOR
EXHIBITION, AMUSEMENT, ENTERTAINMENT, OR INSTRUCTION.
(H) ANY ITEMS CONTAINED IN SUBSECTIONS (A)(3)(A) THROUGH (G)
ABOVE EVEN THOUGH THEY ARE SOLD ON A "TAKE-OUT" OR "TO GO"
BASIS, AND WHETHER OR NOT THE ITEM IS PACKAGED, WRAPPED, OR
IS ACTUALLY TAKEN FROM THE PREMISES.
(4) "HOT PREPARED FOOD" MEANS THOSE PRODUCTS, ITEMS, OR INGREDIENTS
OF FOOD WHICH ARE PREPARED AND INTENDED FOR CONSUMPTION IN A
HEATED CONDITION. "HOT PREPARED FOOD" INCLUDES A COMBINATION OF
HOT AND COLD FOOD ITEMS OR INGREDIENTS IF A SINGLE PRICE HAS BEEN
ESTABLISHED.
(5) "PREMISES" MEANS THE TOTAL SPACE AND FACILITIES IN OR ON WHICH A
VENDOR CONDUCTS BUSINESS AND WHICH ARE OWNED OR CONTROLLED, IN
WHOLE OR IN PART, BY A VENDOR OR WHICH ARE MADE AVAILABLE FOR
THE USE OF CUSTOMERS OF THE VENDOR OR GROUP OF VENDORS,
INCLUDING ANY BUILDING OR PART OF A BUILDING, PARKING LOT, OR
GROUNDS.
(6) "FOOD FOR HOME CONSUMPTION" MEANS ALL FOOD, EXCEPT FOOD FOR
CONSUMPTION ON THE PREMISES, IF SOLD BY ANY OF THE FOLLOWING:
(A) AN ELIGIBLE GROCERY BUSINESS.
(B) A PERSON WHO CONDUCTS A BUSINESS WHOSE PRIMARY BUSINESS IS
NOT THE SALE OF FOOD BUT WHO SELLS FOOD WHICH IS DISPLAYED,
PACKAGED, AND SOLD IN A SIMILAR MANNER AS AN ELIGIBLE
GROCERY BUSINESS.
(C) A PERSON WHO SELLS FOOD AND DOES NOT PROVIDE OR MAKE
AVAILABLE ANY FACILITIES FOR THE CONSUMPTION OF FOOD ON THE
PREMISES.
(D) A PERSON WHO CONDUCTS A DELICATESSEN BUSINESS EITHER FROM
A COUNTER WHICH IS SEPARATE FROM THE PLACE AND CASH
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REGISTER WHERE TAXABLE SALES ARE MADE OR FROM A COUNTER
WHICH HAS TWO CASH REGISTERS AND WHICH ARE USED TO RECORD
TAXABLE AND TAX EXEMPT SALES, OR A RETAILER WHO CONDUCTS
A DELICATESSEN BUSINESS WHO USES A CASH REGISTER WHICH HAS
AT LEAST TWO TAX COMPUTING KEYS WHICH ARE USED TO RECORD
TAXABLE AND TAX EXEMPT SALES.
(E) VENDING MACHINES AND OTHER TYPES OF AUTOMATIC RETAILERS.
(F) A PERSON’S SALES OF FOOD, DRINK AND CONDIMENT FOR
CONSUMPTION WITHIN THE PREMISES OF ANY PRISON, JAIL OR OTHER
INSTITUTION UNDER THE JURISDICTION OF THE STATE DEPARTMENT
OF CORRECTIONS, THE DEPARTMENT OF PUBLIC SAFETY, THE
DEPARTMENT OF JUVENILE CORRECTIONS OR A COUNTY SHERIFF.
(c) INCOME DERIVED FROM THE FOLLOWING SOURCES IS EXEMPT FROM THE TAX
IMPOSED BY THIS SECTION:
(1) SALES OF FOOD FOR HOME CONSUMPTION TO A PERSON REGULARLY
ENGAGED IN THE BUSINESS OF SELLING SUCH PROPERTY.
(2) OUT-OF-TOWN SALES OR OUT-OF-STATE SALES.
(3) CHARGES FOR DELIVERY OR OTHER “DIRECT CUSTOMER SERVICES” AS
PRESCRIBED BY REGULATION.
(4) FOOD PURCHASED WITH FOOD STAMPS PROVIDED THROUGH THE FOOD
STAMP PROGRAM ESTABLISHED BY THE FOOD STAMP ACT OF 1977 (P.L. 95-
113; 91 STAT. 958.7 U.S.C. SECTION 2011 ET SEQ.) OR PURCHASED WITH FOOD
INSTRUMENTS ISSUED UNDER SECTION 17 OF THE CHILD NUTRITION ACT (P.L.
95-627; 92 STAT. 3603; AND P.L. 99-669; SECTION 4302; 42 UNITED STATES CODE
SECTION 1786) BUT ONLY TO THE EXTENT THAT FOOD STAMPS OR FOOD
INSTRUMENTS WERE ACTUALLY USED TO PURCHASE SUCH FOOD.
(5) SALES OF FOOD PRODUCTS BY PRODUCERS AS PROVIDED FOR BY A.R.S.
SECTIONS 3-561, 3-562 AND 3-563.
(6) SALES OF FOOD, BEVERAGES, CONDIMENTS AND ACCESSORIES TO A PUBLIC
EDUCATIONAL ENTITY, PURSUANT TO ANY OF THE PROVISIONS OF TITLE 15,
ARIZONA REVISED STATUTES, INCLUDING A REGULARLY ORGANIZED
PRIVATE OR PAROCHIAL SCHOOL THAT OFFERS AN EDUCATIONAL PROGRAM
FOR GRADE TWELVE OR UNDER WHICH MAY BE ATTENDED IN SUBSTITUTION
FOR A PUBLIC SCHOOL PURSUANT TO A.R.S. 15-802 ; TO THE EXTENT SUCH
ITEMS ARE TO BE PREPARED OR SERVED TO INDIVIDUALS FOR
CONSUMPTION ON THE PREMISES OF A PUBLIC EDUCATIONAL ENTITY
DURING SCHOOL HOURS. FOR THE PURPOSES OF THIS SUBSECTION,
"ACCESSORIES" MEANS PAPER PLATES, PLASTIC EATING UTENSILS, NAPKINS,
PAPER CUPS, DRINKING STRAWS, PAPER SACKS OR OTHER DISPOSABLE
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CONTAINERS, OR OTHER ITEMS WHICH FACILITATE THE CONSUMPTION OF
THE FOOD.
(7) SALES OF FOOD, BEVERAGES, CONDIMENTS AND ACCESSORIES TO A
NONPROFIT CHARITABLE ORGANIZATION THAT HAS QUALIFIED AS AN
EXEMPT ORGANIZATION UNDER 26 U.S.C. SECTION 501(C)(3) AND REGULARLY
SERVES MEALS TO THE NEEDY AND INDIGENT ON A CONTINUING BASIS AT
NO COST. FOR THE PURPOSES OF THIS SUBSECTION, "ACCESSORIES" MEANS
PAPER PLATES, PLASTIC EATING UTENSILS, NAPKINS, PAPER CUPS, DRINKING
STRAWS, PAPER SACKS OR OTHER DISPOSABLE CONTAINERS, OR OTHER
ITEMS WHICH FACILITATE THE CONSUMPTION OF THE FOOD.
(d) REPORTING. SUCH PERSONS WHO SELL FOOD FOR HOME CONSUMPTION SHALL, IN
CONJUNCTION WITH THE RETURN REQUIRED PURSUANT TO SECTION 8A-520, REPORT
TO THE TAX COLLECTOR IN A MANNER PRESCRIBED BY THE TAX COLLECTOR ALL
SALES OF FOOD FOR HOME CONSUMPTION EXEMPTED FROM TAXES IMPOSED BY
THIS CHAPTER.
(e) RECORDKEEPING.
(1) RETAILERS SHALL MAINTAIN ACCURATE, VERIFIABLE, AND COMPLETE
RECORDS OF ALL PURCHASES AND SALES OF TANGIBLE PERSONAL
PROPERTY IN ORDER TO VERIFY EXEMPTIONS FROM TAXES IMPOSED BY THIS
CHAPTER. A RETAILER MAY USE ANY METHOD OF REPORTING THAT
PROPERLY REFLECTS ALL PURCHASES AND SALES OF FOOD FOR HOME
CONSUMPTION, AS WELL AS ALL PURCHASES AND SALES OF ITEMS SUBJECT
TO TAXES IMPOSED BY THIS CHAPTER, PROVIDED THAT SUCH RECORDS ARE
MAINTAINED IN ACCORDANCE WITH ARTICLE III, AND REGULATIONS OF THE
TAX COLLECTOR.
(2) ANY PERSON WHO FAILS TO MAINTAIN RECORDS AS PROVIDED HEREIN
SHALL BE DEEMED TO HAVE HAD NO SALES OF FOOD FOR HOME
CONSUMPTION, AND IF UPON REQUEST BY THE TAX COLLECTOR, A PERSON
CANNOT DEMONSTRATE TO THE TAX COLLECTOR THAT SUCH RECORDS AND
REPORTS DO PROPERLY REFLECT ALL SALES OF FOOD FOR HOME
CONSUMPTION, THE TAX COLLECTOR MAY RECOMPUTE THE AMOUNT OF
TAX TO BE PAID AS PROVIDED IN SECTIONS 8A-370 AND 8A-545(B).
Section XI. Model City Tax Code Section 8A-465 is amended as follows. All changes are
effective July 1, 2013, except new subsection (mm), which is effective January 1, 2007.
Sec. 8A-465. Retail sales: exemptions.
Income derived from the following sources is exempt from the tax imposed by Section 8A-460:
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(a) sales of tangible personal property to a person regularly engaged in the business of selling such
property.
(b) out-of-Town sales or out-of-State sales.
(c) charges for delivery, installation, or other direct customer services as prescribed by Regulation.
(d) charges for repair services as prescribed by Regulation, when separately charged and separately
maintained in the books and records of the taxpayer.
(e) sales of warranty, maintenance, and service contracts, when separately charged and separately
maintained in the books and records of the taxpayer.
(f) sales of prosthetics.
(g) sales of income-producing capital equipment.
(h) sales of rental equipment and rental supplies.
(i) sales of mining and metallurgical supplies.
(j) sales of motor vehicle fuel and use fuel which are subject to a tax imposed under the provisions of
Article I or II, Chapter 16, Title 28, Arizona Revised Statutes; or sales of use fuel to a holder of a
valid single trip use fuel tax permit issued under A.R.S. Section 28-5739, or sales of natural gas or
liquefied petroleum gas used to propel a motor vehicle.
(k) sales of tangible personal property to a construction contractor who holds a valid Privilege Tax
License for engaging or continuing in the business of construction contracting where the tangible
personal property sold is incorporated into any structure or improvement to real property as part of
construction contracting activity.
(l) sales of motor vehicles to nonresidents of this State for use outside this State if the vendor ships or
delivers the motor vehicle to a destination outside this State.
(m) sales of tangible personal property which directly enters into and becomes an ingredient or
component part of a product sold in the regular course of the business of job printing, manufacturing,
or publication of newspapers, magazines, or other periodicals. Tangible personal property which is
consumed or used up in a manufacturing, job printing, publishing, or production process is not an
ingredient nor component part of a product.
(n) (Reserved)
(1) (Reserved)
(2) (Reserved)
(o) sales to hotels, bars, restaurants, dining cars, lunchrooms, boarding houses, or similar establishments
of articles consumed as food, drink, or condiment, whether simple, mixed, or compounded, where
such articles are customarily prepared or served to patrons for consumption on or off the premises,
where the purchaser is properly licensed and paying a tax under Section 8A-455 or the equivalent
excise tax upon such income.
(p) sales of tangible personal property to a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property sold is for use in activities resulting in
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gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512 or
sales of tangible personal property purchased in this State by a nonprofit charitable organization that
has qualified under Section 501(c)(3) of the United States Internal Revenue Code and that engages in
and uses such property exclusively for training, job placement or rehabilitation programs or testing
for mentally or physically handicapped persons.
(q) food purchased with food stamps provided through the food stamp program established by the Food
Stamp Act of 1977 (P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011 et seq.) or purchased with food
instruments issued under Section 17 of the Child Nutrition Act (P.L. 95-627; 92 Stat. 3603; and P.L.
99-669; Section 4302; 42 United States Code Section 1786) but only to the extent that food stamps or
food instruments were actually used to purchase such food.(RESERVED)
(r) (Reserved)
(1) (Reserved)
(2) (Reserved)
(3) (Reserved)
(4) (Reserved)
(s) sales of groundwater measuring devices required by A.R.S. Section 45-604.
(t) (Reserved)
(u) sales of aircraft acquired for use outside the State, as prescribed by Regulation.
(v) sales of food products by producers as provided for by A.R.S. Sections 3-561, 3-562 and 3-563.
(w) (Reserved)
(x) (Reserved)SALES OF FOOD AND DRINK TO A PERSON WHO IS ENGAGED IN BUSINESS
THAT IS CLASSIFIED UNDER THE RESTAURANT CLASSIFICATION AND THAT
PROVIDES SUCH FOOD AND DRINK WITHOUT MONETARY CHARGE TO ITS
EMPLOYEES FOR THEIR OWN CONSUMPTION ON THE PREMISES DURING SUCH
EMPLOYEES’ HOURS OF EMPLOYMENT.
(y) (Reserved)
(z) (Reserved)
(aa) the sale of tangible personal property used in remediation contracting as defined in Section 8A-100
and Regulation 8A-100.5.
(bb) sales of materials that are purchased by or for publicly funded libraries including school district
libraries, charter school libraries, community college libraries, state university libraries or federal,
state, county or municipal libraries for use by the public as follows:
(1) printed or photographic materials.
(2) electronic or digital media materials.
(cc) sales of food, beverages, condiments and accessories used for serving food and beverages to a
commercial airline, as defined in A.R.S. Section 42-5061(A)(49), that serves the food and beverages
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to its passengers, without additional charge, for consumption in flight. For the purposes of this
subsection, "accessories" means paper plates, plastic eating utensils, napkins, paper cups, drinking
straws, paper sacks or other disposable containers, or other items which facilitate the consumption of
the food.
(dd) in computing the tax base in the case of the sale or transfer of wireless telecommunication equipment
as an inducement to a customer to enter into or continue a contract for telecommunication services
that are taxable under Section 8A-470, gross proceeds of sales or gross income does not include any
sales commissions or other compensation received by the retailer as a result of the customer entering
into or continuing a contract for the telecommunications services.
(ee) for the purposes of this Section, a sale of wireless telecommunication equipment to a person who
holds the equipment for sale or transfer to a customer as an inducement to enter into or continue a
contract for telecommunication services that are taxable under Section 8A-470 is considered to be a
sale for resale in the regular course of business.
(ff) sales of alternative fuel as defined in A.R.S. Section 1-215, to a used oil fuel burner who has received
a Department of Environmental Quality permit to burn used oil or used oil fuel under A.R.S. Section
49-426 or Section 49-480.
(gg) sales of food, beverages, condiments and accessories to a public educational entity, pursuant to any of
the provisions of Title 15, Arizona Revised Statutes, INCLUDING A REGULARLY ORGANIZED
PRIVATE OR PAROCHIAL SCHOOL THAT OFFERS AN EDUCATIONAL PROGRAM FOR
GRADE TWELVE OR UNDER WHICH MAY BE ATTENDED IN SUBSTITUTION FOR A
PUBLIC SCHOOL PURSUANT TO A.R.S. 15-802; to the extent such items are to be prepared or
served to individuals for consumption on the premises of a public educational entity during school
hours. For the purposes of this subsection, "accessories" means paper plates, plastic eating utensils,
napkins, paper cups, drinking straws, paper sacks or other disposable containers, or other items which
facilitate the consumption of the food.
(hh) sales of personal hygiene items to a person engaged in the business of and subject to tax under
Section 8A-444 of this code if the tangible personal property is furnished without additional charge to
and intended to be consumed by the person during his occupancy.
(ii) for the purposes of this Section, the diversion of gas from a pipeline by a person engaged in the
business of operating a natural or artificial gas pipeline, for the sole purpose of fueling compressor
equipment to pressurize the pipeline, is not a sale of the gas to the operator of the pipeline.
(jj) sales of food, beverages, condiments and accessories to a nonprofit charitable organization that has
qualified as an exempt organization under 26 U.S.C. Section 501(c)(3) and regularly serves meals to
the needy and indigent on a continuing basis at no cost. For the purposes of this subsection,
"accessories" means paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper
sacks or other disposable containers, or other items which facilitate the consumption of the food.
(kk) sales of motor vehicles that use alternative fuel if such vehicle was manufactured as a diesel fuel
vehicle and converted to operate on alternative fuel and sales of equipment that is installed in a
conventional diesel fuel motor vehicle to convert the vehicle to operate on an alternative fuel, as
defined in A.R.S. Section 1-215.
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(ll) sales of solar energy devices, for taxable periods beginning from and after July 1, 2008. The retailer
shall register with the department of revenue as a solar energy retailer. By registering, the retailer
acknowledges that it will make its books and records relating to sales of solar energy devices
available to the department of revenue and Town, as applicable, for examination.
(MM) SALES OR OTHER TRANSFERS OF RENEWABLE ENERGY CREDITS OR ANY OTHER
UNIT CREATED TO TRACK ENERGY DERIVED FROM RENEWABLE ENERGY
RESOURCES. FOR THE PURPOSES OF THIS PARAGRAPH, "RENEWABLE ENERGY
CREDIT" MEANS A UNIT CREATED ADMINISTRATIVELY BY THE CORPORATION
COMMISSION OR GOVERNING BODY OF A PUBLIC POWER UTILITY TO TRACK
KILOWATT HOURS OF ELECTRICITY DERIVED FROM A RENEWABLE ENERGY
RESOURCE OR THE KILOWATT HOUR EQUIVALENT OF CONVENTIONAL ENERGY
RESOURCES DISPLACED BY DISTRIBUTED RENEWABLE ENERGY RESOURCES.
(NN) SALES OF MAGAZINES OR OTHER PERIODICALS OR OTHER PUBLICATIONS BY THIS
STATE TO ENCOURAGE TOURIST TRAVEL.
(OO) SALES OF PAPER MACHINE CLOTHING, SUCH AS FORMING FABRICS AND DRYER
FELTS, SOLD TO A PAPER MANUFACTURER AND DIRECTLY USED OR CONSUMED IN
PAPER MANUFACTURING.
(PP) SALES OF OVERHEAD MATERIALS OR OTHER TANGIBLE PERSONAL PROPERTY THAT
IS USED IN PERFORMING A CONTRACT BETWEEN THE UNITED STATES GOVERNMENT
AND A MANUFACTURER, MODIFIER, ASSEMBLER OR REPAIRER, INCLUDING
PROPERTY USED IN PERFORMING A SUBCONTRACT WITH A GOVERNMENT
CONTRACTOR WHO IS A MANUFACTURER, MODIFIER, ASSEMBLER OR REPAIRER, TO
WHICH TITLE PASSES TO THE GOVERNMENT UNDER THE TERMS OF THE CONTRACT
OR SUBCONTRACT.
(QQ) SALES OF COAL, PETROLEUM, COKE, NATURAL GAS, VIRGIN FUEL OIL AND
ELECTRICITY SOLD TO A QUALIFIED ENVIRONMENTAL TECHNOLOGY
MANUFACTURER, PRODUCER OR PROCESSOR AS DEFINED IN A.R.S. SECTION 41-
1514.02 AND DIRECTLY USED OR CONSUMED IN THE GENERATION OR PROVISION OF
ON-SITE POWER OR ENERGY SOLELY FOR ENVIRONMENTAL TECHNOLOGY
MANUFACTURING, PRODUCING OR PROCESSING OR ENVIRONMENTAL PROTECTION.
THIS PARAGRAPH SHALL APPLY FOR TWENTY FULL CONSECUTIVE CALENDAR OR
FISCAL YEARS FROM THE DATE THE FIRST PAPER MANUFACTURING MACHINE IS
PLACED IN SERVICE. IN THE CASE OF AN ENVIRONMENTAL TECHNOLOGY
MANUFACTURER, PRODUCER OR PROCESSOR WHO DOES NOT MANUFACTURE
PAPER, THE TIME PERIOD SHALL BEGIN WITH THE DATE THE FIRST
MANUFACTURING, PROCESSING OR PRODUCTION EQUIPMENT IS PLACED IN
SERVICE.
(RR) SALES OR GROSS INCOME DERIVED FROM SALES OF MACHINERY, EQUIPMENT,
MATERIALS AND OTHER TANGIBLE PERSONAL PROPERTY USED DIRECTLY AND
PREDOMINANTLY TO CONSTRUCT A QUALIFIED ENVIRONMENTAL TECHNOLOGY
MANUFACTURING, PRODUCING OR PROCESSING FACILITY AS DESCRIBED IN A.R.S.
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SECTION 41-1514.02. THIS SUBSECTION APPLIES FOR TEN FULL CONSECUTIVE
CALENDAR OR FISCAL YEARS AFTER THE START OF INITIAL CONSTRUCTION.
Section XII. Model City Tax Code Section 8A-480 is amended as follows, with an effective date
of January 1, 2007, except new Local Option #PP which is available to be selected effective
August 1, 2014.
Sec. 8A-480. Utility services.
(a) The tax rate shall be at an amount equal to two and six-tenths percent (2.6%) of the gross income
from the business activity upon every person engaging or continuing in the business of producing,
providing, or furnishing utility services, including electricity, electric lights, current, power, gas
(natural or artificial), or water to:
(1) consumers or ratepayers who reside within the Town.
(2) (Reserved)
(b) Exclusion of certain sales of natural gas to a public utility. Notwithstanding the provisions of
subsection (a) above, the gross income derived from the sale of natural gas to a public utility for the
purpose of generation of power to be transferred by the utility to its ratepayers shall be considered a
retail sale of tangible personal property subject to Sections 8A-460 and 8A-465, and not considered
gross income taxable under this Section.
(c) Resale utility services. Sales of utility services to another provider of the same utility services for the
purpose of providing such utility services either to another properly licensed utility provider or
directly to such purchaser's customers or ratepayers shall be exempt and deductible from the cross
income subject to the tax imposed by this Section, provided that the purchaser is properly licensed by
all applicable taxing jurisdictions to engage or continue in the business of providing utility services,
and further provided that the seller maintains proper documentation, in a manner similar to that for
sales for resale, of such transactions.
(d) (Reserved)
(e) The tax imposed by this Section shall not apply to sales of utility services to a qualifying hospital,
qualifying community health center or a qualifying health care organization, except when sold for use
in activities resulting in gross income from unrelated business income as that term is defined in 26
U.S.C. Section 512.
(f) The tax imposed by this Section shall not apply to sales of natural gas or liquefied petroleum gas used
to propel a motor vehicle.
(g) The tax imposed by this Section shall not apply to:
(1) revenues received by a municipally owned utility in the form of fees charged to persons
constructing residential, commercial or industrial developments or connecting residential,
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commercial or industrial developments to a municipal utility system or systems if the fees are
segregated and used only for capital expansion, system enlargement or debt service of the
utility system or systems.
(2) revenues received by any person or persons owning a utility system in the form of
reimbursement or contribution compensation for property and equipment installed to provide
utility access to, on or across the land of an actual utility consumer if the property and
equipment become the property of the utility. This exclusion shall not exceed the value of
such property and equipment.
(h) The tax imposed by this Section shall not apply to sales of alternative fuel as defined in A.R.S.
Section 1-215, to a used oil fuel burner who has received a Department of Environmental Quality
permit to burn used oil or used oil fuel under A.R.S. Section 49-426 or Section 49-480.
(I) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO SALES OR OTHER
TRANSFERS OF RENEWABLE ENERGY CREDITS OR ANY OTHER UNIT CREATED TO
TRACK ENERGY DERIVED FROM RENEWABLE ENERGY RESOURCES. FOR THE
PURPOSES OF THIS PARAGRAPH, "RENEWABLE ENERGY CREDIT" MEANS A UNIT
CREATED ADMINISTRATIVELY BY THE CORPORATION COMMISSION OR GOVERNING
BODY OF A PUBLIC POWER UTILITY TO TRACK KILOWATT HOURS OF ELECTRICITY
DERIVED FROM A RENEWABLE ENERGY RESOURCE OR THE KILOWATT HOUR
EQUIVALENT OF CONVENTIONAL ENERGY RESOURCES DISPLACED BY DISTRIBUTED
RENEWABLE ENERGY RESOURCES.
(J) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO THE PORTION OF GROSS
PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO TRANSFERS OF
ELECTRICITY BY ANY RETAIL ELECTRIC CUSTOMER OWNING A SOLAR
PHOTOVOLTAIC ENERGY GENERATING SYSTEM TO AN ELECTRIC DISTRIBUTION
SYSTEM, IF THE ELECTRICITY TRANSFERRED IS GENERATED BY THE CUSTOMER'S
SYSTEM.
(K) (RESERVED)
Section XIII. Model City Tax Code Section 8A-485 is amended as follows, with an effective date
of July 1, 2013.
Sec. 8A-485. (Reserved)WASTEWATER REMOVAL SERVICES
(a) THE TAX RATE SHALL BE AN AMOUNT EQUAL TO ZERO PERCENT (0%) OF THE GROSS
INCOME FROM THE BUSINESS ACTIVITY UPON EVERY PERSON ENGAGING OR
CONTINUING IN THE BUSINESS OF PROVIDING WASTEWATER REMOVAL SERVICES
BY MEANS OF SEWER LINES OR SIMILAR PIPELINES TO:
(1) CONSUMERS OR RATEPAYERS WHO RESIDE WITHIN THE TOWN.
(2) CONSUMERS OR RATEPAYERS OF THIS TOWN, WHETHER WITHIN THE TOWN
OR WITHOUT, TO THE EXTENT THAT THIS TOWN PROVIDES SUCH PERSONS
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WASTEWATER REMOVAL SERVICES, EXCLUDING CONSUMERS OR
RATEPAYERS WHO ARE RESIDENTS OF ANOTHER CITY OR TOWN WHICH
LEVIES AN EQUIVALENT EXCISE TAX UPON THIS TOWN FOR PROVIDING SUCH
WASTEWATER REMOVAL SERVICES TO SUCH PERSONS.
(b) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO GROSS INCOME
RELATING TO THE PROVIDING OF WASTEWATER REMOVAL SERVICES FROM A
QUALIFYING HOSPITAL, QUALIFYING COMMUNITY HEALTH CENTER OR A
QUALIFYING HEALTH CARE ORGANIZATION.
Section XIV. Model City Tax Code, Appendix IV, Section 8A-570 is amended as follows to
conform the Appendix language with prior changes made to Section 8A-570 of the Model
language, with an effective date of July 1, 2008.
Sec. 8A -570. Administrative review; petition for hearing or for redetermination; finality of order.
(State Administration and Audits)
(a) Closing agreements between the Tax Collector and a taxpayer have no force of law unless made in
accordance with the provisions of A.R.S. Section 42-1113.
(b) Administrative review.
(1) Petitions of appeal shall be made to, and hearings shall be conducted by, the Arizona
Department of Revenue, in accordance with the provisions of A.R.S. Section 42-1251, as
modified by Section 8A-571.
(2) (Reserved)
(3) (Reserved)
(4) (Reserved)
(5) Hearings shall be held by the Arizona Department of Revenue in accordance with the
provisions of A.R.S. Section 42-1251. The Department's decision may be appealed to the
State Board of Tax Appeals, in accordance with the provisions of A.R.S. Section 42-1253.
(6) (Reserved)
(7) (Reserved)
(8) (Reserved)
(c) (Reserved)
(d) (Reserved)
(e) Taxpayers shall be subject to the state taxpayer bill of rights (A.R.S. § 42-2051 et. seq.).
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Sec. 8A-570. Administrative review; petition for hearing or for redetermination; finality of order.
(Local Audits)
For the purposes of this section, "Municipal Tax Hearing Office" means the administrative offices of the
Municipal Tax Hearing Officer.
(a) Informal Conference. A taxpayer shall have the right to discuss any proposed assessment with the
auditor prior to the issuance of any assessment, but any such informal conference is not required for
the taxpayer to file a petition for administrative review.
(b) Administrative Review.
(1) Filing a Petition. Other than in the case of a jeopardy assessment, a taxpayer may contest the
applicability or amount of tax, penalty, or interest imposed upon or paid by him pursuant to
this Chapter by filing a petition for a hearing or for redetermination with the Tax Collector as
set forth below:
(A) within forty-five (45) days of receipt by the taxpayer of notice of a determination by
the Tax Collector that a tax, penalty, or interest amount is due, or that a request for
refund or credit has been denied; or
(B) by voluntary payment of any contested amount when accompanied by a timely filed
return and a petition requesting a refund of the protested portion of said payment; or
(C) by petition accompanying a timely filed return contesting an amount reported but
not paid; or
(D) by petition requesting review of denial of waiver of penalty as provided in
subsection 8A-540(g).
(2) Extension to file a petition. In all cases, the taxpayer may request only one (1)AN extension
from the Tax Collector. Such request must be in writing, state the reasons for the requested
delay and time of delay requested, and must be filed with the Tax Collector within the period
allowed above for originally filing a petition. The Tax Collector shall allow such A FORTY-
FIVE (45) DAY extension to file a petition, when such written request has been properly and
timely made by the taxpayer, but such extension shall not exceed forty-five (45) days beyond
the time provided for originally filing a petition. THE TAX COLLECTOR MAY GRANT
AN ADDITIONAL EXTENSION AND MAY DETERMINE THE CORRESPONDING
TIME OF ANY SUCH EXTENSION AT HIS SOLE DISCRETION.
(3) Requirements for petition.
(A) The petition shall be in writing and shall set forth the reasons why any correction,
abatement, or refund should be granted, and the amount of reduction or refund
requested. The petition may be amended at any time prior to the time the taxpayer
rests his case at the hearing or such time as the Hearing Officer allows for
submitting of amendments in cases of redeterminations without hearings. The
Hearing Officer may require that amendments be in writing, and in that case, he
shall provide a reasonable period of time to file the amendment. The Hearing Officer
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shall provide a reasonable period of time for the Tax Collector to review and
respond to the petition and to any written amendments.
(B) The taxpayer, as part of the petition, may request a hearing which shall be granted
by the Hearing Officer. If no request for hearing is made the petition shall be
considered to be submitted for decision by the Hearing Officer on the matters
contained in the petition and in any reply made by the Tax Collector.
(C) The provisions of this Section are exclusive, and no petition seeking any correction,
abatement, or refund shall be considered unless the petition is timely and properly
filed under the Section.
(4) Transmittal to Hearing Officer. The city/town shall designate a Hearing Officer, who may be
other than an employee of the (city/town). The Tax Collector, if designated to receive
petitions, shall forward any petition to the Municipal Tax Hearing Officer within twenty (20)
days after receipt, accompanied by documentation as to timeliness. In cases where the
Hearing Officer determines that the petition is not timely or not in proper form, he shall
notify both the taxpayer and the Tax Collector; and in cases of petitions not in proper form
only, the Hearing Officer shall provide the taxpayer with an extension up to forty-five (45)
days to correct the petition.
(5) Hearings shall be conducted by a Hearing Officer and shall be continuous until the Hearing
Officer closes the record. The taxpayer may be heard in person or by his authorized
representative at such hearing. Hearings shall be conducted informally as to the order of
proceeding and presentation of evidence. The Hearing Officer shall admit evidence over
hearsay objections where the offered evidence has substantial probative value and reliability.
Further, copies of records and documents prepared in the ordinary course of business may be
admitted, without objection as to foundation, but subject to argument as to weight,
admissibility, and authenticity. Summary accounting records may be admitted subject to
satisfactory proof of the reliability of the summaries. In all cases, the decision of the Hearing
Officer shall be made solely upon substantial and reliable evidence. All expenses incurred in
the hearing shall be paid by the party incurring the same.
(6) Redeterminations upon a "petition for redetermination" shall follow the same conditions,
except that no oral hearing shall be held.
(7) Hearing Ruling. In either case, the Hearing Officer shall issue his ruling not later than forty-
five (45) days after the close of the record by the Hearing Officer.
(8) Notice of Refund or Adjusted Assessment. Within sixty (60) days of the issuance of the
Hearing Officer's decision, the Tax Collector shall issue to the taxpayer either a notice of
refund or an adjusted assessment recalculated to conform to the Hearing Officer's decision.
(c) Stipulations that future tax is also protested. A taxpayer may enter into a stipulation with the Tax
Collector that future taxes of similar nature are also at issue in any protest or appeal. However, unless
such stipulation is made, it is presumed that the protest or appeal deals solely and exclusively with
the tax specifically protested and no other. When a taxpayer enters into such a stipulation with the
Tax Collector that future taxes of similar nature will be included in any redetermination, hearing, or
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court case, it is the burden of that taxpayer to identify, segregate, and keep record of such income or
protested taxable amount in his books and records in the same manner as the taxpayer is required to
segregate exempt income.
(d) When an assessment is final.
(1) If a request for administrative review and petition for hearing or redetermination of an
assessment made by the Tax Collector is not filed within the period required by subsection
(b) above, such person shall be deemed to have waived and abandoned the right to question
the amount determined to be due and any tax, interest, or penalty determined to be due shall
be final as provided in subsections 8A-545(a) and 8A-555(f).
(2) The decision made by the Hearing Officer upon administrative review by hearing or
redetermination shall become final thirty (30) days after the taxpayer receives the notice of
refund or adjusted assessment required by subsection (b)(8) above, unless the taxpayer
appeals the order or decision in the manner provided in Section 8A-575.
(e) The provisions of the state taxpayer bill of rights (A.R.S. Section 42-2051 et. seq.) shall not apply.
Section XV. Model City Tax Code Section 8A-660 is amended as follows. All changes are
effective July 1, 2013, except new subsection (mm), which is effective January 1, 2007, and new
Local Option #PP which is available to be selected effective August 1, 2014.
Sec. 8A-660. Use tax: exemptions.
The storage or use in this Town of the following tangible personal property is exempt from the Use Tax
imposed by this Article:
(a) tangible personal property brought into the Town by an individual who was not a resident of the
Town at the time the property was acquired for his own use, if the first actual use of such property
was outside the Town, unless such property is used in conducting a business in this Town.
(b) tangible personal property, the value of which does not exceed the amount of one thousand dollars
($1,000) per item, acquired by an individual outside the limits of the Town for his personal use and
enjoyment.
(c) charges for delivery, installation, or other customer services, as prescribed by Regulation.
(d) charges for repair services, as prescribed by Regulation.
(e) separately itemized charges for warranty, maintenance, and service contracts.
(f) prosthetics.
(g) income-producing capital equipment.
(h) rental equipment and rental supplies.
(i) mining and metallurgical supplies.
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(j) motor vehicle fuel and use fuel which are used upon the highways of this State and upon which a tax
has been imposed under the provisions of Article I or II, Chapter 16, Title 28, Arizona Revised
Statutes.
(k) tangible personal property purchased by a construction contractor, but not an owner-builder, when
such person holds a valid Privilege License for engaging or continuing in the business of construction
contracting, and where the property acquired is incorporated into any structure or improvement to
real property in fulfillment of a construction contract.
(l) sales of motor vehicles to nonresidents of this State for use outside this State if the vendor ships or
delivers the motor vehicle to a destination outside this State.
(m) tangible personal property which directly enters into and becomes an ingredient or component part of
a product sold in the regular course of the business of job printing, manufacturing, or publication of
newspapers, magazines or other periodicals. Tangible personal property which is consumed or used
up in a manufacturing, job printing, publishing, or production process is not an ingredient nor
component part of a product.
(n) rental, leasing, or licensing for use of film, tape, or slides by a theater or other person taxed under
Section 8A-410, or by a radio station, television station, or subscription television system.
(o) food served to patrons for a consideration by any person engaged in a business properly licensed and
taxed under Section 8A-455, but not food consumed by owners, agents, or employees of such
business.
(p) tangible personal property acquired by a qualifying hospital, qualifying community health center or a
qualifying health care organization, except when the property is in fact used in activities resulting in
gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512.
(q) food purchased with food stamps provided through the food stamp program established by the Food
Stamp Act of 1977 (P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011 et seq.) or purchased with food
instruments issued under Section 17 of the Child Nutrition Act (P.L. 95-627; 92 Stat. 3603; and P.L.
99-669; Section 4302; 42 United States Code Section 1786).(RESERVED)
(r) (Reserved)
(1) (Reserved)
(2) (Reserved)
(3) (Reserved)
(4) (Reserved)
(s) groundwater measuring devices required by A.R.S. Section 45-604.
(t) (Reserved)
(u) aircraft acquired for use outside the State, as prescribed by Regulation.
(v) sales of food products by producers as provided for by A.R.S. Sections 3-561, 3-562 and 3-563.
(w) (Reserved)
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(x) (Reserved)FOOD AND DRINK PROVIDED BY A PERSON WHO IS ENGAGED IN BUSINESS
THAT IS CLASSIFIED UNDER THE RESTAURANT CLASSIFICATION WITHOUT
MONETARY CHARGE TO ITS EMPLOYEES FOR THEIR OWN CONSUMPTION ON THE
PREMISES DURING SUCH EMPLOYEE’S HOURS OF EMPLOYMENT.
(y) (Reserved)
(z) tangible personal property used or stored by this Town.)
(aa) tangible personal property used in remediation contracting as defined in Section 8A-100 and
Regulation 8A-100.5.
(bb) materials that are purchased by or for publicly funded libraries including school district libraries,
charter school libraries, community college libraries, state university libraries or federal, state, county
or municipal libraries for use by the public as follows:
(1) printed or photographic materials.
(2) electronic or digital media materials.
(cc) food, beverages, condiments and accessories used for serving food and beverages by a commercial
airline, as defined in A.R.S. Section 42-5061(A)(49), that serves the food and beverages to its
passengers, without additional charge, for consumption in flight. For the purposes of this subsection,
"accessories" means paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper
sacks or other disposable containers, or other items which facilitate the consumption of the food.
(dd) wireless telecommunication equipment that is held for sale or transfer to a customer as an inducement
to enter into or continue a contract for telecommunication services that are taxable under Section 8A-
470.
(ee) (Reserved)
(ff) alternative fuel as defined in A.R.S. Section 1-215, by a used oil fuel burner who has received a
Department of Environmental Quality permit to burn used oil or used oil fuel under A.R.S. Section
49-426 or Section 49-480.
(gg) food, beverages, condiments and accessories purchased by or for a public educational entity, pursuant
to any of the provisions of Title 15, Arizona Revised Statutes, INCLUDING A REGULARLY
ORGANIZED PRIVATE OR PAROCHIAL SCHOOL THAT OFFERS AN EDUCATIONAL
PROGRAM FOR GRADE TWELVE OR UNDER WHICH MAY BE ATTENDED IN
SUBSTITUTION FOR A PUBLIC SCHOOL PURSUANT TO A.R.S. 15-802; to the extent such
items are to be prepared or served to individuals for consumption on the premises of a public
educational entity during school hours. For the purposes of this subsection, "accessories" means
paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or other
disposable containers, or other items which facilitate the consumption of the food.
(hh) personal hygiene items purchased by a person engaged in the business of and subject to tax under
Section 8A-444 of this code if the tangible personal property is furnished without additional charge to
and intended to be consumed by the person during his occupancy.
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(ii) the diversion of gas from a pipeline by a person engaged in the business of operating a natural or
artificial gas pipeline, for the sole purpose of fueling compressor equipment to pressurize the
pipeline, is not a sale of the gas to the operator of the pipeline.
(jj) food, beverages, condiments and accessories purchased by or for a nonprofit charitable organization
that has qualified as an exempt organization under 26 U.S.C. Section 501(c)(3) and regularly serves
meals to the needy and indigent on a continuing basis at no cost. For the purposes of this subsection,
"accessories" means paper plates, plastic eating utensils, napkins, paper cups, drinking straws, paper
sacks or other disposable containers, or other items which facilitate the consumption of the food.
(kk) sales of motor vehicles that use alternative fuel if such vehicle was manufactured as a diesel fuel
vehicle and converted to operate on alternative fuel and sales of equipment that is installed in a
conventional diesel fuel motor vehicle to convert the vehicle to operate on an alternative fuel, as
defined in A.R.S. Section 1-215.
(ll) The storage, use or consumption of tangible personal property in the city or town by a school district
or charter school.
(MM) RENEWABLE ENERGY CREDITS OR ANY OTHER UNIT CREATED TO TRACK ENERGY
DERIVED FROM RENEWABLE ENERGY RESOURCES. FOR THE PURPOSES OF THIS
PARAGRAPH, "RENEWABLE ENERGY CREDIT" MEANS A UNIT CREATED
ADMINISTRATIVELY BY THE CORPORATION COMMISSION OR GOVERNING BODY OF
A PUBLIC POWER UTILITY TO TRACK KILOWATT HOURS OF ELECTRICITY DERIVED
FROM A RENEWABLE ENERGY RESOURCE OR THE KILOWATT HOUR EQUIVALENT OF
CONVENTIONAL ENERGY RESOURCES DISPLACED BY DISTRIBUTED RENEWABLE
ENERGY RESOURCES.
(NN) MAGAZINES OR OTHER PERIODICALS OR OTHER PUBLICATIONS BY THIS STATE TO
ENCOURAGE TOURIST TRAVEL.
(OO) PAPER MACHINE CLOTHING, SUCH AS FORMING FABRICS AND DRYER FELTS, SOLD
TO A PAPER MANUFACTURER AND DIRECTLY USED OR CONSUMED IN PAPER
MANUFACTURING.
(PP) OVERHEAD MATERIALS OR OTHER TANGIBLE PERSONAL PROPERTY THAT IS USED
IN PERFORMING A CONTRACT BETWEEN THE UNITED STATES GOVERNMENT AND A
MANUFACTURER, MODIFIER, ASSEMBLER OR REPAIRER, INCLUDING PROPERTY
USED IN PERFORMING A SUBCONTRACT WITH A GOVERNMENT CONTRACTOR WHO
IS A MANUFACTURER, MODIFIER, ASSEMBLER OR REPAIRER, TO WHICH TITLE
PASSES TO THE GOVERNMENT UNDER THE TERMS OF THE CONTRACT OR
SUBCONTRACT.
(QQ) COAL, PETROLEUM, COKE, NATURAL GAS, VIRGIN FUEL OIL AND ELECTRICITY SOLD
TO A QUALIFIED ENVIRONMENTAL TECHNOLOGY MANUFACTURER, PRODUCER OR
PROCESSOR AS DEFINED IN A.R.S. SECTION 41-1514.02 AND DIRECTLY USED OR
CONSUMED IN THE GENERATION OR PROVISION OF ON-SITE POWER OR ENERGY
SOLELY FOR ENVIRONMENTAL TECHNOLOGY MANUFACTURING, PRODUCING OR
PROCESSING OR ENVIRONMENTAL PROTECTION. THIS PARAGRAPH SHALL APPLY
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FOR TWENTY FULL CONSECUTIVE CALENDAR OR FISCAL YEARS FROM THE DATE
THE FIRST PAPER MANUFACTURING MACHINE IS PLACED IN SERVICE. IN THE CASE
OF AN ENVIRONMENTAL TECHNOLOGY MANUFACTURER, PRODUCER OR
PROCESSOR WHO DOES NOT MANUFACTURE PAPER, THE TIME PERIOD SHALL BEGIN
WITH THE DATE THE FIRST MANUFACTURING, PROCESSING OR PRODUCTION
EQUIPMENT IS PLACED IN SERVICE.
(RR) MACHINERY, EQUIPMENT, MATERIALS AND OTHER TANGIBLE PERSONAL PROPERTY
USED DIRECTLY AND PREDOMINANTLY TO CONSTRUCT A QUALIFIED
ENVIRONMENTAL TECHNOLOGY MANUFACTURING, PRODUCING OR PROCESSING
FACILITY AS DESCRIBED IN A.R.S. SECTION 41-1514.02. THIS SUBSECTION APPLIES
FOR TEN FULL CONSECUTIVE CALENDAR OR FISCAL YEARS AFTER THE START OF
INITIAL CONSTRUCTION.
(SS) (RESERVED)
Section XVI. Model City Tax Code Regulation 8A-120.1 is repealed, with an effective date of
July 1, 2013.
Reg. 8A--120.1. Food for home consumption: recordkeeping and reporting requirements.
(a) Reporting. Such persons who sell food for home consumption shall, in conjunction with the return
required pursuant to Section 8A-520, report to the Tax Collector in a manner prescribed by the Tax
Collector all sales of food for home consumption exempted from taxes imposed by this Chapter.
(b) Recordkeeping.
(1) Retailers shall maintain accurate, verifiable, and complete records of all purchases and sales
of tangible personal property in order to verify exemptions from taxes imposed by this
Chapter. A retailer may use any method of reporting that properly reflects all purchases and
sales of food for home consumption, as well as all purchases and sales of items subject to
taxes imposed by this Chapter, provided that such records are maintained in accordance with
Article III, and regulations of the Tax Collector.
(2) Any person who fails to maintain records as provided herein shall be deemed to have had no
sales of food for home consumption, and if upon request by the Tax Collector, a person
cannot demonstrate to the Tax Collector that such records and reports do properly reflect all
sales of food for home consumption, the Tax Collector may recompute the amount of tax to
be paid as provided in Sections 8A-370 and 8A-545(b).
Section XVII. Model City Tax Code Regulation 8A-270.1 is amended as follows, with an
effective date of July 1, 2013.
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Reg. 8A-270.1. Proprietary activities of municipalities are not considered activities of a governmental
entity.
The following activities, when performed by a municipality, are considered to be activities of a person
engaged in business for the purposes of this Chapter, and not excludable by reason of Section 8A-270:
(a) rental, leasing, or licensing for use of real property to other than another department or agency of the
municipality.
(b) producing, providing, or furnishing electricity, electric lights, current, power, gas (natural or
artificial), or water to consumers or ratepayers.
(c) sale of tangible personal property to the public, when similar tangible personal property is available
for sale by other persons, as, for example, at police or surplus auctions.
(d) PROVIDING WASTEWATER REMOVAL SERVICES TO CONSUMERS OR RATEPAYERS BY
MEANS OF SEWER LINES OR SIMILAR PIPELINES.
Section XVIII. Model City Tax Code Regulation 8A-460.1 is amended as follows, with an
effective date of July 1, 2013.
Reg. 8A-460.1. Distinction between retail sales and certain other transfers of tangible personal
property.
(a) Charges for transfer of tangible personal property included in the gross income of the business
activity of persons engaged in the following business activities shall be deemed only as gross income
from such business activity and not sales at retail taxed by Section 8A-460:
(1) tangible personal property incorporated into real property as part of reconstruction or
construction contracting, per Sections 8A-415 through 8A-418.
(2) (Reserved)
(3) job printing, per Section 8A-425.
(4) mining, timbering, and other extraction, but not sales of sand, gravel, or rock extracted from
the ground, per Section 8A-430.
(5) publication of newspapers, magazines, and other periodicals, per Section 8A-435.
(6) rental, leasing, and licensing of real or tangible personal property, per Sections 8A-445 or
8A-450.
(7) restaurants and bars, per Section 8A-455.
(7)(8) FOOD FOR HOME CONSUMPTION, PER SECTION 8A-462.
(8)(9) telecommunications services, per Section 8A-470.
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(9)(10) utility services, per Section 8A-480.
(10)(11) WASTEWATER REMOVAL SERVICES, PER SECTION 8A-485.
(b) Distinction between construction contracting, retail, and certain direct customer service activities.
(1) When an item is attached or installed on real property, it is a construction contracting activity
and any subsequent repair, removal, or replacement of that item is construction contracting.
(2) Items attached or installed on tangible personal property are retail sales.
(3) Transactions where no tangible personal property is attached or installed are considered
direct customer service activities (for example: carpet cleaning, lawn mowing, landscape
maintenance).
(4) Demolition, earth moving, and wrecking activities are considered construction contracting.
(c) The sale of sand, rock, and gravel extracted from the ground shall be deemed a sale of tangible
personal property and not mining or metallurgical activity.
(d) Sale of consumable goods incorporated into or applied to real property is considered a retail sale and
not construction contracting. Examples of consumable goods are lubricants, faucet washers, and air
conditioning coolant, but not paint.
(e) Installation or removal of tangible personal property which has independent functional utility is
considered a retail activity.
(1) "Tangible personal property which has independent functional utility" must be able to
substantially perform its function(s) without attachment to real property. "Attachment to real
property" must include more than connection to water, power, gas, communication, or other
service.
(2) Examples of tangible personal property which has independent functional utility include
artwork, furnishings, "plug-in" kitchen equipment, or similar items installed by bolts or
similar fastenings.
(3) Examples of tangible personal property which does not have independent functional utility
include wall-to-wall carpeting, flooring, wallpaper, kitchen cabinets, or "built-in"
dishwashers or ranges.
(4) The installation of window coverings (drapes, mini-blinds, etc.) is always a retail activity.
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
The attached Ordinance and Resolution incorporate into the local tax code all of the Model City Tax Code
changes approved by the Municipal Tax Code Commission from 2012 through 2014, as described below
by Resolution Section number.
Section 1
Section 100 adds language to the existing definitions of "Business" and “Prosthetic”. This change
excludes the sale of electricity generated by consumer equipment from the definition of “Business”.
Adding this exclusion means persons that make such sales (e.g. residential solar energy sales) are not
deemed to be in the business of providing Utilities, and thus are not required to have a Privilege Tax
License to make such sales. The additional language that adds Orthodontics to the definition of
"Prosthetic" is a change intended to conform the Code to State statute. These changes are effective
retroactively from and after January 1, 2007 for “Business,” and October 1, 2007 for “Prosthetic.”
Section 2
Section 120 is repealed, eliminating the definition of "Food for Home Consumption." The elements of
this definition are incorporated in new Section 462, creating a separate “Food for Home Consumption”
tax classification apart from the Retail classification. This section is effective from and after July 1, 2013.
Section 3
Section 200 is amended to add conforming language under the determination of gross income that is
related to nuclear fuel sales as found in State statute. This section is effective from and after July 1, 2013.
Section 4
This section repeals and replaces all of Article III – Licensing and Recordkeeping. This is a critical step in
TPT Simplification that has the effect of making licensing as uniform as possible across all cities and
towns. Note that this section completely replaces the entirety of Article III in every city and town’s tax
code. This change also eliminates all Regulations numbered in the 300’s, as well as eliminating all Green
Sheet items related to tax licensing. This section also eliminates the use of the tax license as a means to
regulate business for any purpose other than tax collection. From now on, all licensing and enforcement
of a regulatory nature such as zoning, use permits, special events, inspections, etc., must be accomplished
by a separate business license. This section is effective from and after January 1, 2015.
Section 5
Section 422 is amended to remove an obsolete code reference related to Jet Fuel Sales. This section is
effective retroactively from and after September 21, 2006.
Section 6
Section 425 is amended to add an exemption from tax on Job Printing for sales of postage and freight in
conformity with State statute. This element is effective retroactively from and after September 21, 2006.
Also, Local Option #MM is eliminated effective July 1, 2012, also in conformity with State statute.
Section 7
Section 445 is amended to adopt the final version of a new exemption for Real Property Leases between
Affiliated Entities. This section is effective retroactively from and after July 20, 2011.
Section 8
Section 450 is amended to conform to the new State exemption and city preemption that makes the
leasing of certified ignition interlock devices required under DUI laws exempt from tax under Tangible
Personal Property Rental. This section is effective retroactively from and after September 1, 2004.
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
Section 9
Section 460 is amended in conformity with a new clarifying State exemption and matching city
preemption that makes the retail sale of gift cards and other cash equivalents exempt from the tax under
the Retail classification. This section is effective retroactively from and after October 1, 2007.
Section 10
Section 462, Retail Sales: Food for Home Consumption is added to the standard Model Code language.
This section incorporates all of the definitions and Regulations related to grocery sales that were
previously included only in those communities that selected Model Option #2. With this change and
standardization, Model Option #2 is eliminated from the Code. Cities and towns are now free to set a
distinct tax rate for grocery sales, which can by higher, lower, or zero, as the community sees fit. This
section is effective from and after July 1, 2013.
Section 11
Section 465, Retail Sales: Exemptions has undergone significant changes, largely in name of conformity
with State statute. A major goal of TPT Simplification was making conforming changes to the Retail
classification of the MCTC that aligned with State statute wherever possible, with the intention of
preparing for passage of the Marketplace Fairness Act. On the State tax side, the only change enacted was
elimination of an exemption for in-store sales to non-residents that are shipped out of State (excluding
vehicles). On the City side, this movement resulted in the elimination of Model Option #2, related to
food for home consumption creating a separate classification; eliminating Local Option #AA, allowing
tax exempt employee drinks and meals; and adding charter schools to the list that qualify for a food sale
exemption. Also, wholly new conforming exemptions were adopted, including one for the sale of
“renewable energy credits”; sale of periodicals to encourage tourism; sale of paper machine clothing to a
paper manufacturer; sales of overhead materials used in performing government contracts; and the sale of
fuels and sale of equipment to qualified environmental technology manufacturers. All of these changes
are effective July 1, 2013, with the exception of the sale of “renewable energy credits” which is effective
retroactively from and after January 1, 2007.
Section 12
Changes to this section include adding in a specific exemption from the Utilities classification for sales of
excess energy produced by a consumer’s photovoltaic system to a utility distributor, along with language
that removes the sale of RECs from the Utilities classification. This provides the exemption under the
Utilities classification to clarify that when the meter spins backward, the taxable measure is the net charge
to the consumer, and that REC sales are not part of the gross receipts under Utilities. This section shall be
effective from and after January 1, 2007.
Section 13
Section 485 is added to the standard code language, creating a new classification that imposes tax on
wastewater removal services. This section was formerly a Green Page in several cities. This conversion to
standard code language is part of the ongoing effort to eliminate the Green Pages by either eliminating or
adopting exception items. This section shall be effective from and after July 1, 2013. Fountain Hills has
chosen to maintain its previous exemption in this area through the application of a zero percent tax rate
for this classification.
Section 14
Section 570 is amended to grant the Tax Collector greater latitude in allowing extensions to taxpayers that
are making a good faith effort to produce additional information during the audit protest process.
Previously the code technically allowed only one 45-day extension to taxpayers protesting audit results,
so actual practice resulted in many “unofficial” extensions. This change allows the Tax Collector to grant
additional extension at their discretion. This section is deemed effective from and after July 1, 2008.
SUMMARY OF CHANGES TO MODEL CITY TAX CODE
Section 15
Section 660, Use Tax: Exemptions has undergone significant changes which mirror the changes to the
Retail Exemptions noted above in Code Section 465. Again, these are being done in the name of
conformity with State statute. This movement resulted in the elimination of the food for home
consumption exemption; adding an exemption for employee drinks and meals; and adding charter schools
to the list that qualify for a food exemption. Also, wholly new conforming exemptions were adopted,
including one for the purchase of “Renewable Energy Credits” or RECs; periodicals to encourage
tourism; paper machine clothing to a paper manufacturer; overhead materials used in performing
government contracts; and the purchase of fuels and sale of equipment to qualified environmental
technology manufacturers. All of these changes are effective July 1, 2013, with the exception of
“Renewable Energy Credits” which is effective retroactively from and after January 1, 2007.
Section 16
This section repeals Regulation 120.1 related to the definition of Food for Home Consumption, which has
been incorporated in the text of new Section 462 noted above. This section shall be effective from and
after July 1, 2013.
Section 17
This section amends Regulation 270.1, adding the provision of wastewater removal services to the list of
activities that are considered proprietary and therefore taxable when engaged in by a city or town. This
section shall be effective from and after July 1, 2013.
Section 18
This section amends Regulation 460.1, adding the distinction from Retail for activities that fall under the
two new classifications: Food for Home Consumption in Section 462, and Wastewater Removal Services
in Section 485.This means that an exchange of tangible personal property that occurs under the activity
described in Sections 462 or 485, is specifically NOT considered a Retail transaction. This section shall
be effective from and after July 1, 2013.
2497782.1
ORDINANCE 15-11
AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, RELATING TO THE TRANSACTION
PRIVILEGE TAX; ADOPTING “THE 2012-2014 AMENDMENTS TO THE
TAX CODE OF THE TOWN OF FOUNTAIN HILLS” BY REFERENCE;
ESTABLISHING EFFECTIVE DATES; PROVIDING FOR SEVERABILITY
AND PROVIDING PENALTIES FOR VIOLATIONS.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, as follows:
SECTION 1. The document known as the “2012-2014 Amendments to the Tax Code of
the Town of Fountain Hills,” (the “Tax Code Amendments”), one copy of which is on file in the
office of the Town Clerk, which document was made a public record by Resolution No. 2015-56
of the Town of Fountain Hills, Arizona, is hereby referred to, adopted and made a part hereof as
if fully set out in this Ordinance.
SECTION 2. Any person found guilty of violating any provision of the Tax Code
Amendments shall be guilty of a class one misdemeanor. Each day that a violation continues
shall be a separate offense punishable as herein above described.
SECTION 3. If any section, subsection, sentence, clause, phrase or portion of this
Ordinance or any part of the Tax Code Amendments adopted herein by reference is for any
reason held to be invalid or unconstitutional by the decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this
Ordinance.
SECTION 4. The provisions of this Ordinance conform the Town Tax Code to the
Model City Tax Code, which is controlling. The provisions of each section are effective as
stated in each section and are as provided by the Municipal Tax Code Commission upon
approval of the stated change to the Model City Tax Code. Provisions subject to a retroactive
effective date at the time of approval by the Municipal Tax Code Commission favor taxpayers by
reducing an imposition of the tax or increasing an allowable deduction, exemption, or exclusion.
Provisions that increase the imposition of the tax or decrease the application of a deduction
exemption, or exclusion had a prospective effective date at the time of approval by the Municipal
Tax Code Commission. Provisions creating a new Option state the first effective date the new
Option is available for selection. Provisions eliminating an existing Option state the last
effective date of the eliminated Option.
SECTION 5. The Mayor, the Town Manager, the Town Clerk and the Town Attorney
are hereby authorized and directed to execute all documents and take all steps necessary to carry
out the purpose and intent of this Ordinance.
2497782.1
2
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
Arizona, November 19, 2015.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
Linda M. Kavanagh, Mayor Bevelyn J. Bender, Town Clerk
REVIEWED BY: APPROVED AS TO FORM:
Grady E. Miller, Town Manager Andrew J. McGuire, Town Attorney