SECTIONS:
3-05-006-0600 USE TAX: DEFINITIONS
3-05-006-0601 RESERVED
3-05-006-0602 RESERVED
3-05-006-0610 USE TAX: IMPOSITION OF TAX; PRESUMPTION
3-05-006-0620 USE TAX: LIABILITY FOR TAX
3-05-006-0630 USE TAX: RECORDKEEPING REQUIREMENTS
3-05-006-0640 USE TAX: CREDIT FOR EQUIVALENT EXCISE TAXES PAID ANOTHER JURISDICTION
3-05-006-0650 USE TAX: EXCLUSION WHEN ACQUISITION SUBJECT TO USE TAX IS TAXED OR TAXABLE ELSEWHERE IN THIS CHAPTER; LIMITATION
3-05-006-0660 USE TAX: EXEMPTIONS
3-05-006-0600 USE TAX: DEFINITIONS
For the purposes of this division only, the following definitions shall apply, in addition to the definitions provided in Division 3-05-001:
"Acquire (for storage or use)" means purchase, rent, lease, or license for storage or use.
"Retailer" also means any person selling, renting, licensing for use, or leasing tangible personal property under circumstances which would render such transactions subject to the taxes imposed in Division 3-05-004, if such transactions had occurred within this City.
"Storage (within the City)" means the keeping or retaining of tangible personal property at a place within the City for any purpose, except for those items acquired specifically and solely for the purpose of sale, rental, lease, or license for use in the regular course of business or for the purpose of subsequent use solely outside the City.
"Use (of tangible personal property)" means consumption or exercise of any other right or power over tangible personal property incident to the ownership thereof except the holding for the sale, rental, lease, or license for use of such property in the regular course of business. (Ord. 2014-16, Enacted, 07/15/2014)
3-05-006-0601 RESERVED
3-05-006-0602 RESERVED
3-05-006-0610 USE TAX: IMPOSITION OF TAX; PRESUMPTION
A. There is hereby levied and imposed, subject to all other provisions of this chapter, an excise tax on the storage or use in the City of tangible personal property, for the purpose of raising revenue to be used in defraying the necessary expenses of the City, such taxes to be collected by the Tax Collector.
B. The tax rate shall be at an amount equal to two and two hundred eighty-one thousandths percent (2.281%) of the:
1. Cost of tangible personal property acquired from a retailer, upon every person storing or using such property in this City.
2. Gross income from the business activity upon every person meeting the requirements of Section 3-05-006-0620(B) or (C) who is engaged or continuing in the business activity of sales, rentals, leases, or licenses of tangible personal property to persons within the City for storage or use within the City, to the extent that tax has been collected upon such transaction.
3. Cost of the tangible personal property provided under the conditions of a warranty, maintenance, or service contract.
4. Cost of complimentary items provided to patrons without itemized charge by a restaurant, hotel, or other business.
5. Reserved.
C. It shall be presumed that all tangible personal property acquired by any person who at the time of such acquisition resides in the City is acquired for storage or use in this City, until the contrary is established by the taxpayer.
D. Exclusions. For the purposes of this division, the acquisition of the following shall not be deemed to be the purchase, rental, lease, or license of tangible personal property for storage or use within the City:
1. Stocks, bonds, options, or other similar materials.
2. Lottery tickets or shares sold pursuant to A.R.S. Title 5, Chapter 5, Article I.
3. Platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by regulation.
E. Reserved.
F. Reserved. (Ord. 2014-16, Enacted, 07/15/2014; Ord. 2019-13, Amended, 07/02/2019)
3-05-006-0620 USE TAX: LIABILITY FOR TAX
The following persons shall be deemed liable for the tax imposed by this division; and such liability shall not be extinguished until the tax has been paid to this City, except that a receipt from a retailer separately charging the tax imposed by this chapter is sufficient to relieve the person acquiring such property from further liability for the tax to which the receipt refers:
A. Any person who acquires tangible personal property from a retailer, whether or not such retailer is located in this City, when such person stores or uses said property within the City.
B. Any retailer not located within the City, selling, renting, leasing, or licensing tangible personal property for storage or use of such property within the City, may obtain a license from the Tax Collector and collect the use tax on such transactions. Such retailer shall be liable for the use tax to the extent such use tax is collected from his customers.
C. Every agent within the City of any retailer not maintaining an office or place of business in this City, when such person sells, rents, leases, or licenses tangible personal property for storage or use in this City, shall, at the time of such transaction, collect and be liable for the tax imposed by this division upon the storage or use of the property so transferred, unless such retailer or agent is liable for an equivalent excise tax upon the transaction.
D. Any person who acquires tangible personal property from a retailer located in the City and such person claims to be exempt from the City privilege or use tax at the time of the transaction, and upon which no City privilege tax was charged or paid, when such claim is not sustainable.
E. Every person storing or using tangible personal property under the conditions of a warranty, maintenance, or service contract. (Ord. 2014-16, Enacted, 07/15/2014)
3-05-006-0630 USE TAX: RECORDKEEPING REQUIREMENTS
All deductions, exclusions, exemptions, and credits provided in this division are conditional upon adequate proof of documentation as required by Division 3-05-003 or elsewhere in this chapter. (Ord. 2014-16, Enacted, 07/15/2014)
3-05-006-0640 USE TAX: CREDIT FOR EQUIVALENT EXCISE TAXES PAID ANOTHER JURISDICTION
In the event that an equivalent excise tax has been levied and paid upon tangible personal property which is acquired to be stored or used within this City, full credit for any and all such taxes so paid shall be allowed by the Tax Collector but only to the extent use tax is imposed upon that transaction by this division. (Ord. 2014-16, Enacted, 07/15/2014)
3-05-006-0650 USE TAX: EXCLUSION WHEN ACQUISITION SUBJECT TO USE TAX IS TAXED OR TAXABLE ELSEWHERE IN THIS CHAPTER; LIMITATION
The tax levied by this division does not apply to the storage or use in this City of tangible personal property acquired in this City, the gross income from the sale, rental, lease, or license of which were included in the measure of the tax imposed by Division 3-05-004 of this chapter; provided, however, that any person who has acquired tangible personal property from a vendor in this City without paying the City privilege tax because of a representation to the vendor that the property was not subject to such tax, when such claim is not sustainable, may not claim the exclusion from such use tax provided by this section. (Ord. 2014-16, Enacted, 07/15/2014)
3-05-006-0660 USE TAX: EXEMPTIONS
The storage or use in this City of the following tangible personal property is exempt from the use tax imposed by this division:
A. Tangible personal property brought into the City by an individual who was not a resident of the City at the time the property was acquired for his own use, if the first actual use of such property was outside the City, unless such property is used in conducting a business in this City.
B. Tangible personal property, the value of which does not exceed the amount of one thousand dollars ($1,000.00) per item, acquired by an individual outside the limits of the City 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.
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 A.R.S. Title 28, Chapter 16, Article I or II.
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 3-05-004-0410, 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 3-05-004-0455, 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. 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.
X. 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 employees’ hours of employment.
Y. Tangible personal property donated to an organization or entity qualifying as an exempt organization under 26 U.S.C Section 501(c)(3); if and only if:
1. The donor is engaged or continuing in a business activity subject to a tax imposed by Division 3-05-004; and
2. The donor originally purchased the donated property for resale in the ordinary course of the donor’s business; and
3. The donor obtained from the donee a letter or other evidence satisfactory to the Tax Collector of qualification under 26 U.S.C. Section 501(c)(3) from the Internal Revenue Service or other appropriate Federal agency; and
4. The donor maintains, and provides upon demand, such evidence to the Tax Collector, in a manner similar to other documentation required under Division 3-05-003.
Z. Reserved.
AA. Tangible personal property used in remediation contracting as defined in Section 3-05-001-0100 and Regulation 3-5-100.5.
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 3-05-004-0470.
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 49-480.
GG. Food, beverages, condiments and accessories purchased by or for a public educational entity, pursuant to any of the provisions of A.R.S. Title 15, including a regularly organized private or parochial school that offers an educational program for grade twelve (12) or under which may be attended in substitution for a public school pursuant to A.R.S. Section 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 3-05-004-0444 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. 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 subsection, "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 subsection shall apply for twenty (20) 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 (10) full consecutive calendar or fiscal years after the start of initial construction. (Ord. 2014-16, Enacted, 07/15/2014)