A.R.S. tit. 42 ch. 6 — Arizona Revised Statutes Title 42 Chapter 6 — Local Excise Taxes

42-6001. Collection and administration of transaction privilege tax and affiliated excise taxes; intergovernmental contract or agreement; method of payment A. The department shall collect and administer any transaction privilege and affiliated excise taxes, including use tax, severance tax, jet fuel excise and use tax, and rental occupancy tax, imposed by any city or town. The department and each city or town shall enter into an intergovernmental contract or agreement to provide a uniform method of administration, collection, audit and licensing of transaction privilege and affiliated excise taxes imposed by the state or cities or towns pursuant to title 11, chapter 7, article 3. The department may deny a request by a city or town to audit a taxpayer that is engaged in business in more than one city or town. The contract or agreement shall include criteria for which the department can make the denial. If the department denies an audit request from a city or town, the city or town may not audit a taxpayer that is engaged in business in more than one city or town. B. A taxpayer that does not report and pay the required tax to a city or town electronically shall file and pay the tax to the department of revenue if the department has developed the electronic and nonelectronic tools necessary to capture data with sufficient specificity to meet the needs of all taxing jurisdictions, including specific data regarding each tax classification and any corresponding deductions at each business location of the taxpayer. 42-6002. Administration; procedures for levy, collection and enforcement applicable to cities and towns; definition A. Unless the context otherwise requires, chapter 1 and chapter 5, article 1 of this title govern the administration of the municipal privilege taxes levied by a city or town. B. The procedures for levy, collection and enforcement of payment of transaction privilege and affiliated excise taxes, including use tax, severance tax, jet fuel excise and use tax, and rental occupancy tax, levied by a city or town shall be in the same manner as authorized by chapter 5 of this title. Except for business activities classified under the retail classification pursuant to section 42-5061, this subsection does not preclude a city or town from levying a transaction privilege, sales, use or other similar tax as a result of a person's business activities as provided in this article and article 2 of this chapter. C. An intergovernmental contract or agreement entered into pursuant to section 42-6001, subsection A shall include the following provisions: 1. All audits shall be conducted in accordance with standard audit procedures defined in the department of revenue audit manual. 2. All auditors shall be trained in accordance with the policies of the department. 3. An auditor that is trained and authorized to conduct an audit may not represent any taxpayer in any tax matter. 4. Except as provided in paragraph 5 of this subsection, the audit of a taxpayer that has locations in two or more cities or towns shall be conducted by the department. 5. All audits shall include all taxing jurisdictions in this state regardless of which jurisdiction conducts the audit. A city or town may conduct an audit of any taxpayer that is engaged in business in only one city or town and any other taxpayer authorized by the department. 6. The department shall issue all audit assessments on behalf of all taxing jurisdictions in a single notice to the taxpayer. 7. Appeals of audit assessments shall be directed to the department. 8. Appeals of audit assessments shall be administered pursuant to chapter 1, article 6 of this title. 9. The department shall notify all affected cities and towns before entering into any compromise, closing, settlement or other agreement with a person related to the tax levied and imposed by the cities and towns. D. For the purposes of this section, "transaction privilege, sales, use or other similar tax" means any tax imposed under the model city tax code. 42-6003. Multi-municipal taxes; determination of municipality entitled to levy and collect taxes; appeal; definitions A. Except as otherwise provided in this section, a taxpayer who has paid transaction privilege taxes on a transaction to an appropriate city or town, or qualified for an exemption from transaction privilege taxes under the ordinance of an appropriate city or town, is not required to pay transaction privilege taxes on the same transaction to any other city or town. B. If a city or town asserts, in whole or in part, the right to a tax which was paid to an appropriate city or town, the cities and towns claiming the tax shall attempt to resolve allocation of the tax among themselves. Except as otherwise provided in this section, the taxpayer shall not be a party to the dispute but may be compelled to give evidence or produce books and records. C. If a city or town asserts the right to tax a transaction which is exempt from transaction privilege taxes under the ordinance of an appropriate city or town, the city or town asserting the right to tax and the city or town which the taxpayer asserts is an appropriate city or town shall attempt to resolve which city or town has the superior jurisdictional claim. Except as otherwise provided in this section, the taxpayer shall not be a party to the dispute but may be compelled to give evidence or produce books and records. D. If the cities or towns involved cannot resolve the dispute arising under subsection B or C, any city or town which is a party to the dispute may submit the issue to the municipal tax code commission for resolution. The taxpayer may intervene in any proceeding before the commission to assist in resolving the dispute. The commission shall determine which city or town has the superior jurisdictional claim, based upon its respective ordinances and common law principles related to transaction privilege taxation, and, if the taxpayer paid tax on the transaction, shall award the entire tax to the prevailing city or town. E. If it is determined that the taxpayer should have paid taxes to a city or town with a higher tax rate than the city or town to which the tax was actually paid, the taxpayer is liable for the tax at the higher rate only on transactions occurring after the taxable month of the written notification requirement provided in subsection H. F. If a city or town with a higher tax rate asserts a claim to transaction privilege taxes paid to an appropriate city or town with a lower tax rate, the taxpayer may submit the issue to the municipal tax code commission for resolution and may intervene as a party in a proceeding before the commission to resolve the dispute. G. Any party aggrieved by an order or decision of the municipal tax code commission may appeal to the state board of tax appeals within thirty days after notice of the order or decision of the commission has been received by the party. Any party aggrieved by an order or decision of the state board of tax appeals under this section may appeal the order or decision to tax court but must commence such action within thirty days after notice of the order or decision of the state board has been received by the party. H. Following an agreement among the cities or towns involved as to which city or town has jurisdiction over transaction privilege taxation on a transaction or following a final determination by the municipal tax code commission, the state board of tax appeals or the tax court that a city or town is entitled to collect such taxes, and following written notification to the taxpayer, the taxpayer shall thereafter pay transaction privilege taxes on similar transactions to that city or town. I. In this section: 1. "Appropriate city or town" means a city or town in this state either: (a) In which the business sales office which generated the taxable transaction is located. (b) In which the purchaser resides, is located or is situated at the time of the transaction. (c) Which imposes or claims the right to impose a transaction privilege tax on the transaction in question under its ordinance. 2. "Transaction privilege tax" means a municipal transaction privilege license tax, use tax or similar tax and includes for purposes of this section any penalty assessed by a city or town for nonpayment, delinquent payment or failure to timely report or file a return, and any interest assessed because of late payment of taxes. 42-6004. Exemption from municipal tax; definitions A. A city, town or special taxing district shall not levy a transaction privilege, sales, use or other similar tax on: 1. Exhibition events in this state sponsored, conducted or operated by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the organization is associated with a major league baseball team or a national touring professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual. This paragraph does not apply to an organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from state transaction privilege tax under section 42-5073. 2. Interstate telecommunications services, which include that portion of telecommunications services, such as subscriber line service, allocable by federal law to interstate telecommunications service. 3. Sales of warranty or service contracts. 4. Sales of motor vehicles to nonresidents of this state for use outside this state if either of the following applies: (a) The motor vehicle dealer ships or delivers the motor vehicle to a destination outside this state. (b) The vehicle, trailer or semitrailer has a gross vehicle weight rating of more than ten thousand pounds, is used or maintained to transport property in the furtherance of interstate commerce and otherwise meets the definition of commercial motor vehicle as defined in section 28-5201. 5. Interest on finance contracts. 6. Dealer documentation fees on the sales of motor vehicles. 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. 8. Sales of internet access services to the person's subscribers and customers. For the purposes of this paragraph: (a) "Internet" means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio. (b) "Internet access" means a service that enables users to access content, information, electronic mail or other services over the internet. Internet access does not include telecommunication services provided by a common carrier. 9. The gross proceeds of sales or gross income retained by the Arizona exposition and state fair board from ride ticket sales at the annual Arizona state fair. 10. Leasing real property between affiliated companies, businesses, persons or reciprocal insurers. For the purposes of this paragraph: (a) "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, affiliated persons hold a controlling interest in both the lessor and the lessee, or an unrelated person holds a controlling interest in both the lessor and lessee. (b) "Affiliated persons" means members of the individual's family or persons who have ownership or control of a business entity. (c) "Controlling interest" means direct or indirect ownership of at least eighty percent of the voting shares of a corporation or of the interests in a company, business or person other than a corporation. (d) "Members of the individual's family" means the individual's spouse and brothers and sisters, whether by whole or half blood, including adopted persons, ancestors and lineal descendants. (e) "Reciprocal insurer" has the same meaning prescribed in section 20-762. 11. The gross proceeds of sales or gross income derived from a contract for the installation, assembly, repair or maintenance of machinery, equipment or other tangible personal property that is described in section 42-5061, subsection B and that has independent functional utility, pursuant to the following provisions: (a) The deduction provided in this paragraph includes the gross proceeds of sales or gross income derived from all of the following: (i) Any activity performed on machinery, equipment or other tangible personal property with independent functional utility. (ii) Any activity performed on any tangible personal property relating to machinery, equipment or other tangible personal property with independent functional utility in furtherance of any of the purposes provided for under subdivision (d) of this paragraph. (iii) Any activity that is related to the activities described in items (i) and (ii) of this subdivision, including inspecting the installation of or testing the machinery, equipment or other tangible personal property. (b) The deduction provided in this paragraph does not include gross proceeds of sales or gross income from the portion of any contracting activity that consists of the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property described in section 42-5061, subsection B. (c) The deduction provided in this paragraph shall be determined without regard to the size or useful life of the machinery, equipment or other tangible personal property. (d) For the purposes of this paragraph, "independent functional utility" means that the machinery, equipment or other tangible personal property can independently perform its function without attachment to real property, other than attachment for any of the following purposes: (i) Assembling the machinery, equipment or other tangible personal property. (ii) Connecting items of machinery, equipment or other tangible personal property to each other. (iii) Connecting the machinery, equipment or other tangible personal property, whether as an individual item or as a system of items, to water, power, gas, communication or other services. (iv) Stabilizing or protecting the machinery, equipment or other tangible personal property during operation by bolting, burying or performing other dissimilar nonpermanent connections to either real property or real property improvements. 12. The leasing or renting of certified ignition interlock devices installed pursuant to the requirements prescribed by section 28-1461. For the purposes of this paragraph, "certified ignition interlock device" has the same meaning prescribed in section 28-1301. 13. Computer data center equipment sold to the owner, operator or qualified colocation tenant of a computer data center that is certified by the Arizona commerce authority under section 41-1519 or an authorized agent of the owner, operator or qualified colocation tenant during the qualification period for use in the qualified computer data center. For the purposes of this paragraph, "computer data center", "computer data center equipment", "qualification period" and "qualified colocation tenant" have the same meanings prescribed in section 41-1519. 14. The gross proceeds of sales or gross income derived from a contract with the owner of real property or improvements to real property for the maintenance, repair, replacement or alteration of existing property, except as specified in this paragraph. The gross proceeds of sales or gross income derived from a de minimis amount of modification activity does not subject the contract or any part of the contract to tax. For the purposes of this paragraph: (a) Each contract is independent of another contract, except that any change order that directly relates to the scope of work of the original contract shall be treated the same as the original contract under this paragraph, regardless of the amount of modification activities included in the change order. If a change order does not directly relate to the scope of work of the original contract, the change order shall be treated as a new contract, with the tax treatment of any subsequent change order to follow the tax treatment of the contract to which the scope of work of the subsequent change order directly relates. (b) Any term not defined in this paragraph that is defined in section 42-5075 has the same meaning prescribed in section 42-5075. (c) This paragraph does not apply to a contract that primarily involves surface or subsurface improvements to land and that is subject to title 28, chapter 19, 20 or 22 or title 34, chapter 2 or 6 even if the contract also includes vertical improvements. If a city or town imposes a tax on contracts that are subject to procurement processes under those provisions, the city or town shall include in the request for proposals a notice to bidders when those projects are subject to the tax. This subdivision does not apply to contracts with: (i) Community facilities districts, fire districts, county television improvement districts, community park maintenance districts, cotton pest control districts, hospital districts, pest abatement districts, health service districts, agricultural improvement districts, county free library districts, county jail districts, county stadium districts, special health care districts, public health services districts, theme park districts or revitalization districts. (ii) Any special taxing district not specified in item (i) of this subdivision if the district does not substantially engage in the modification, maintenance, repair, replacement or alteration of surface or subsurface improvements to land. 15. Monitoring services relating to an alarm system as defined in section 32-101. 16. Tangible personal property, job printing or publications sold to or purchased by, or tangible personal property leased, rented or licensed for use to or by, a qualifying health sciences educational institution as defined in section 42-5001. 17. The transfer of title or possession of coal back and forth between an owner or operator of a power plant and a person who is responsible for refining coal if both of the following apply: (a) The transfer of title or possession of the coal is for the purpose of refining the coal. (b) The title or possession of the coal is transferred back to the owner or operator of the power plant after completion of the coal refining process. For the purposes of this subdivision, "coal refining process" means the application of a coal additive system that aids the reduction of power plant emissions during the combustion of coal and the treatment of flue gas. 18. Tangible personal property incorporated or fabricated into a project described in paragraph 14 of this subsection, that is located within the exterior boundaries of an Indian reservation for which the owner, as defined in section 42-5075, of the project is an Indian tribe or an affiliated Indian. For the purposes of this paragraph: (a) "Affiliated Indian" means an individual Native American Indian who is duly registered on the tribal rolls of the Indian tribe for whose benefit the Indian reservation was established. (b) "Indian reservation" means all lands that are within the limits of areas set aside by the United States for the exclusive use and occupancy of an Indian tribe by treaty, law or executive order and that are recognized as Indian reservations by the United States department of the interior. (c) "Indian tribe" means any organized nation, tribe, band or community that is recognized as an Indian tribe by the United States department of the interior and includes any entity formed under the laws of that Indian tribe. 19. The charges for the leasing or renting of space to make attachments to utility poles as follows: (a) By a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator. (b) To a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator. 20. Until March 1, 2017, the gross proceeds of sales or gross income derived from entry fees paid by participants for events that consist of a run, walk, swim or bicycle ride or a similar event, or any combination of these events. 21. The gross proceeds of sales or gross income derived from entry fees paid by participants for events that are operated or conducted by nonprofit organizations that are exempt from taxation under section 501(c)(3) of the internal revenue code and of which no part of the organization's net earnings inures to the benefit of any private shareholder or individual, if the event consists of a run, walk, swim or bicycle ride or a similar event, or any combination of these events. 22. The gross proceeds of sales or gross income derived from sales of machinery and equipment used directly for energy storage for later electrical use. For the purposes of this paragraph: (a) "Electric utility scale" means a person that is engaged in a business activity described in section 42-5063, subsection A or such person's equipment or wholesale electricity suppliers. (b) "Energy storage" means commercially available technology for electric utility scale that is capable of absorbing energy, storing energy for a period of time and thereafter dispatching the energy and that uses mechanical, chemical or thermal processes to store energy. (c) "Machinery and equipment used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released. 23. The gross proceeds of sales or gross income derived from a contract to install containment structures. For the purposes of this paragraph, "containment structure" means a structure that prevents, monitors, controls or reduces noxious or harmful discharge into the environment. B. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on natural gas or liquefied petroleum gas used to propel a motor vehicle. C. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from any of the following: 1. A motor carrier's use on the public highways in this state if the motor carrier is subject to a fee prescribed in title 28, chapter 16, article 4. 2. Leasing, renting or licensing a motor vehicle subject to and on which the fee has been paid under title 28, chapter 16, article 4. 3. The sale of a motor vehicle and any repair and replacement parts and tangible personal property becoming a part of such motor vehicle to a motor carrier who is subject to a fee prescribed in title 28, chapter 16, article 4 and who is engaged in the business of leasing, renting or licensing such property. 4. Incarcerating or detaining in a privately operated prison, jail or detention facility 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. 5. Transporting for hire persons, freight or property by light motor vehicles subject to a fee under title 28, chapter 15, article 4. 6. Any amount attributable to development fees that are incurred in relation to the construction, development or improvement of real property and paid by the taxpayer as defined in the model city tax code or by a contractor providing services to the taxpayer. For the purposes of this paragraph: (a) The attributable amount shall not exceed the value of the development fees actually imposed. (b) The attributable amount is equal to the total amount of development fees paid by the taxpayer or by a contractor providing services to the taxpayer and the total development fees credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development. The real property must be the subject of the development fees. (c) "Development fees" means fees imposed to offset capital costs of providing public infrastructure, public safety or other public services to a development and authorized pursuant to section 9-463.05, section 11-1102 or title 48 regardless of the jurisdiction to which the fees are paid. 7. Any amount attributable to fees collected by transportation network companies issued a permit pursuant to section 28-9552. 8. Transporting for hire persons by transportation network company drivers on transactions involving transportation network services as defined in section 28-9551. 9. Transporting for hire persons by vehicle for hire companies that are issued permits pursuant to section 28-9503. 10. Transporting for hire persons by vehicle for hire drivers on transactions involving vehicle for hire services as defined in section 28-9501. D. A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, in excess of one-tenth of one percent of the value of the entire product mined, smelted, extracted, refined, produced or prepared for sale, profit or commercial use, on persons engaged in the business of mineral processing, except to the extent that the tax is computed on the gross proceeds or gross income from sales at retail. E. In computing the tax base, any city, town or other taxing jurisdiction shall not include in the gross proceeds of sales or gross income: 1. A manufacturer's cash rebate on the sales price of a motor vehicle if the buyer assigns the buyer's right in the rebate to the retailer. 2. The waste tire disposal fee imposed pursuant to section 44-1302. F. A city or town shall not levy a use tax on the storage, use or consumption of tangible personal property in the city or town by a school district or charter school. G. A city, town or taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from over-the-top services. For the purposes of this subsection, "over-the-top services" means audio or video programming services that are received by the purchaser by means of an internet connection, regardless of the technology used, that include linear or live programming and that are generally considered comparable to programming provided by a radio or television broadcast station and includes related on-demand programming that is provided at no additional charge, regardless of whether the services are provided independently or packaged with other audio or video programming. H. From and after December 31, 2024, a city, town or other taxing jurisdiction may not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on the business of renting or leasing real property for residential purposes. This subsection: 1. Does not apply to health care facilities, long-term care facilities or hotel, motel or other transient lodging businesses. 2. Applies regardless of whether the city or town has adopted the model city tax code pursuant to article 2 of this chapter. I. For the purposes of this section: 1. "Cable operator" has the same meaning prescribed in section 9-505 and includes a video service provider. 2. "Electrical services" means transmitting or distributing electricity, electric lights, current or power over lines, wires or cables. 3. "Telecommunication services" means transmitting or relaying sound, visual image, data, information, images or material over lines, wires or cables by radio signal, light beam, telephone, telegraph or other electromagnetic means. 4. "Utility pole" means any wooden, metal or other pole used for utility purposes and the pole's appurtenances that are attached or authorized for attachment by the person controlling the pole. 42-6005. Unified audit committee; audits A. The director shall establish a unified audit committee with cities and towns. The committee shall: 1. Establish and publish uniform audit guidelines. 2. Coordinate uniform audit functions. B. If the state statutes and model city tax code are the same and the department has issued written guidance, the department's interpretation is binding on cities and towns. 42-6006. Municipal elections on tax issues A city or town may submit any issue relating to a transaction privilege tax, sales, use, franchise or other similar tax or fee, however denominated, to the qualified electors of the city or town at any regular or special municipal election, and may spend public monies of the city or town to cover the expenses of the election on that issue. 42-6007. Mobile telecommunications services; definitions A. Any city or town that levies and collects a tax with respect to mobile telecommunications services shall levy and collect the tax pursuant to the requirements of the mobile telecommunications sourcing act (P.L. 106-252; 114 Stat. 626; 4 United States Code sections 116 through 126). B. If a home service provider charges a customer an amount of tax for mobile telecommunications services and the customer believes that the charge is incorrect, the customer shall notify the home service provider in writing of the contested charge. The written notification shall include the customer's account name and number, the street address for the customer's primary place of use, a description of the contested charge and other information that the home service provider reasonably requires to process the notification. C. The home service provider has sixty days from the date of the postmark on the notification prescribed in subsection B to review the customer's account records and any electronic database or enhanced zip code that is used pursuant to the mobile telecommunications sourcing act (P.L. 106-252; 114 Stat. 626; 4 United States Code sections 116 through 126). After the review, the home service provider shall determine the correct amount to charge the customer and shall issue a refund or credit to the customer if any incorrect charges were collected during the previous two years. D. The procedures in this section are the first course of remedy available to any customer seeking correction of assignment of place of primary use or taxing jurisdiction or a refund of or other compensation for taxes assessed or other charges erroneously collected by the home service provider under this section. No cause of action based on a dispute arising from the collection of taxes by the home service provider under this section shall accrue until that customer has reasonably exercised the rights and procedures prescribed in this section. E. For the purposes of this section: 1. "Customer" means a person or entity that contracts with a home service provider for mobile telecommunications services. Customer does not include a reseller of mobile telecommunications services or a serving carrier that is under an arrangement to serve the customer outside the home service provider's licensed service area. 2. "Home service provider" means a facilities based carrier or reseller that provides mobile telecommunications services to a customer. 3. "Mobile telecommunications services" means commercial mobile radio service as defined in 47 Code of Federal Regulations section 20.3 in effect on June 1, 1999. 4. "Place of primary use" means an address that is within the licensed service area of the home service provider and that is the customer's residential or primary business street address where the customer's use of mobile telecommunications service primarily occurs. 42-6008. Municipal interest rates A city or town that levies and collects a tax under the model city tax code shall compute interest on a deficiency assessment or a claim for refund or credit at the rate and in the manner prescribed by section 42-1123, subsection A. 42-6009. Online lodging; definitions A. Except as provided by this section, a city, town or other taxing jurisdiction may not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on the business of operating an online lodging marketplace or, in the case of an online lodging marketplace that is licensed pursuant to section 42-5005, subsection L, on any online lodging transaction facilitated by the online lodging marketplace or on any online lodging operator with respect to any online lodging transaction for which it has received documentation that the online lodging marketplace has remitted or will remit the applicable tax to the department pursuant to section 42-5014, subsection E. B. In the case of an online lodging marketplace that is licensed pursuant to section 42-5005, subsection L, a city, town or other taxing jurisdiction may levy a transaction privilege, sales, use, franchise or other similar tax or fee on an online lodging marketplace from any activity subject to tax under the model city tax code, with the tax base for an online marketplace being limited pursuant to section 42-5076, subject to the following conditions: 1. The city, town or other taxing jurisdiction tax must be administered in a manner that is uniform with the treatment of online lodging marketplaces, online lodging operators and online lodging transactions provided by chapter 5 of this title, except that: (a) The city, town or other taxing jurisdiction tax rate may be different from the state tax rate prescribed by section 42-5010. (b) The city, town or other taxing jurisdiction tax may apply to online lodging transactions involving rentals of lodging accommodations in the city, town or other taxing jurisdiction for more than twenty-nine consecutive days. With respect to any tax on rentals of lodging accommodations for more than twenty-nine consecutive days, in the case of an online lodging marketplace that has registered pursuant to section 42-5005, subsection L, the city, town or other taxing jurisdiction tax must uniformly apply to all lodging accommodations in the city, town or other taxing jurisdiction for thirty consecutive days or more, and the tax base for the tax must be limited exclusively to online lodging transactions facilitated by an online lodging marketplace for rentals of lodging accommodations for thirty consecutive days or more and located in the applicable city, town or other taxing jurisdiction. 2. The city, town or other taxing jurisdiction tax shall be administered, collected and enforced by the department and distributed to the city, town or other taxing jurisdiction in a uniform manner. 3. The city, town or other taxing jurisdiction tax imposed on online lodging marketplaces and online lodging operators must be uniform with all other taxpayers engaging in the same activity within the jurisdictional boundaries of the city, town or other taxing jurisdiction. 4. Any city, town or other taxing jurisdiction tax is subject to: (a) Section 42-6002, relating to audits. (b) Section 42-2003, subsection X, relating to confidential information. (c) Section 42-5003, subsection B, relating to judicial enforcement. (d) Section 42-5005, subsection L, relating to registration of online lodging marketplaces. (e) Section 42-5014, subsection E, relating to tax returns. 5. The city, town or other taxing jurisdiction tax may not be collected from an online lodging operator with respect to any online lodging transaction or transactions for which the online lodging operator has received written notice or documentation from a registered online lodging marketplace that it has remitted or will remit the applicable city, town or other taxing jurisdiction tax with respect to those transactions to the department pursuant to section 42-5014, subsection E. C. For the purposes of this section, "lodging accommodations", "online lodging marketplace", "online lodging operator" and "online lodging transaction" have the same meanings prescribed in section 42-5076. 42-6010. Retail business location municipal tax incentives; prohibition; penalty; exceptions; definitions A. If at least sixty-five per cent of the land area within a city's or town's exterior boundaries is located within the exterior boundary of a metropolitan statistical area having a population of more than two million persons, the city or town shall not offer or provide a tax incentive to a business entity as an inducement or in exchange for locating or relocating a retail business facility in the city or town. B. A city or town that violates this section is subject to a penalty equal to the amount of the incentive realized by the taxpayer, extended over a period of sixty months. The department of revenue shall notify the state treasurer to withhold the amount of the penalty from monies otherwise payable to the city or town as provided by section 42-5029, subsection J. C. The city or town shall report to the department of revenue the value of any tax incentive used as an inducement or in exchange for locating or relocating a retail business facility in the city or town. For the purposes of this subsection, the value includes all negotiated amounts, in any form and whether actual, realized or contingent, over the term of the incentive agreement. D. This section does not apply with respect to: 1. Municipal services and benefits generally afforded by ordinance to all new businesses in the city or town, having no direct affect on municipal tax levies. 2. Tax incentives that are afforded to all existing retail business facilities in the city or town. 3. Tax incentives for locating retail business facilities in an area designated as a redevelopment project pursuant to title 36, chapter 12, article 3 where the average household income is less than the average city household income as determined by the United States census bureau. 4. Incentives consisting of reimbursement for public infrastructure dedicated to and accepted and controlled upon completion of the project by the city or town, county, state or a private utility where no other political subdivision provides such utility for transportation, water, sewer, electrical, drainage, the fair market value of real property necessary for the public infrastructure and other necessary public infrastructure. This paragraph does not apply to parking lots, parking structures or parking facilities or other structures or amenities owned or controlled by a private entity. 5. Incentives that are offered for the purpose of preserving historical buildings and other structures. 6. Incentives that are offered for cleanup or other remediation activities at a brownfields site under title 49, chapter 2, article 1.1 or the comprehensive environmental response, compensation, and liability act of 1980 (P.L. 96-510, 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund". E. To qualify as exempt from the penalty, an incentive under subsection D of this section that is offered in exchange for expenses incurred by the business entity must be in the form of a reimbursement of the expenses and may not exceed or otherwise be disproportional to the actual cost incurred. F. This section does not apply to tax incentives that were referred to a vote of the qualified electors of the city or town before July 1, 2007 and approved by the qualified electors of the city or town. G. For the purposes of this section: 1. "Metropolitan statistical area" means a geographical area consisting of cities, towns and other populated areas defined for federal statistical and census purposes by the United States office of management and budget with technical assistance from the United States bureau of the census. 2. "Retail business facility" means a store, warehouse or other improvement to real estate where at least one-half of the business conducted on the premises consists of retail sales of tangible personal property to the ultimate consumer, measured by either the number of employees assigned to retail sales or the square footage of the facility used for retail sales. For the purposes of this paragraph, retail sales do not include: (a) Sales of food and beverage for consumption on the premises of the facility. (b) The distribution without charge of promotional products that display the company logo or trademark. (c) Sales solely to company employees. 3. "Tax incentive" means any waiver, exemption, deduction, credit, rebate, discount, deferral or other abatement or reduction of the normal municipal tax liability of an individual taxpayer that otherwise applies to similar existing taxpayers and properties in the city or town, however denominated, computed or applied, and generally understood as an inducement for the taxpayer to locate a business facility or other operation in the city or town. 42-6012. Municipal transaction privilege tax; sales of electricity, natural gas or liquefied petroleum gas A city or town that levies a transaction privilege, sales, gross receipts, use, franchise or other similar fee or tax, however denominated, on the business of producing, providing or furnishing electricity, electric lights, current, power, natural gas or liquefied petroleum gas shall either tax or exempt in whole the gross proceeds of sales or gross income from sales by those businesses to either of the following businesses: 1. A qualified manufacturing or smelting business located in that city or town. A utility that claims this deduction shall report each month, on a form prescribed by the department, the name and address of each qualified manufacturing or smelting business for which this deduction is taken. This paragraph applies to gas transportation services. For the purposes of this paragraph: (a) "Gas transportation services" means the services of transporting natural gas to a natural gas customer or to a natural gas distribution facility if the natural gas was purchased from a supplier other than the utility. (b) "Manufacturing" means the performance as a business of an integrated series of operations that places tangible personal property in a form, composition or character different from that in which it was acquired and transforms it into a different product with a distinctive name, character or use. Manufacturing does not include processing, fabricating, job printing, mining, generating electricity or operating a restaurant. (c) "Qualified manufacturing or smelting business" means one of the following: (i) A business that manufactures or smelts tangible products in this state, of which at least fifty-one percent of the manufactured or smelted products will be exported out of state for incorporation into another product or sold out of state for a final sale. (ii) A business that derives at least fifty-one percent of its gross income from the sale of manufactured or smelted products manufactured or smelted by the business. (iii) A business that uses at least fifty-one percent of its square footage in this state for manufacturing or smelting and business activities directly related to manufacturing or smelting. (iv) A business that employs at least fifty-one percent of its workforce in this state in manufacturing or smelting and business activities directly related to manufacturing or smelting. (v) A business that uses at least fifty-one percent of the value of its capitalized assets in this state, as reflected on the business's books and records, for manufacturing or smelting and business activities directly related to manufacturing or smelting. (d) "Smelting" means to melt or fuse a metalliferous mineral, often with an accompanying chemical change, usually to separate the metal. 2. Businesses that operate an international operations center in this state and that are certified by the Arizona commerce authority pursuant to section 41-1520. 42-6013. Electronic consolidated real property management tax returns; definition A. For taxable periods beginning from and after December 31, 2017, a city or town that levies a transaction privilege tax under this section shall allow persons who are licensed pursuant to title 32, chapter 20 and who are licensed with the department pursuant to section 42-5005, subsection M to file electronic consolidated tax returns with the department with respect to gross proceeds or gross income derived from the individual properties under management on behalf of the property owners, subject to the following conditions and requirements: 1. The department shall administer, collect and enforce the tax that is reported and paid pursuant to an electronic consolidated return and remit the collected revenues to the appropriate city or town. 2. The tax may not be collected from any property owner whose licensee has provided written documentation to the property owner and to the city or town that the licensee has reported and remitted or will report and remit the applicable tax with respect to the property under management. 3. The department shall develop an electronic consolidated return form that separately identifies each owner's property locations and the gross income and deductions for each property location. The licensee shall file the return electronically using the consolidated return form developed by the department. 4. All participating property owners included in the same electronic consolidated return must be on the same tax payment schedule and use the same cash receipts or accrual basis of reporting. 5. A licensee filing an electronic consolidated return: (a) Acts in a fiduciary capacity as the property owners' agent. (b) Is responsible and accountable to the property owners and to the city or town for fully and accurately reporting and paying to the department the tax and any other amounts due. (c) Is subject to audit, as provided by law, of the electronic consolidated returns, including data in the licensee's possession that is used in compiling and filing the electronic consolidated returns. (d) Notwithstanding section 42-1129, subsection A, shall remit the applicable tax in monies that are immediately available to this state on the date of the transfer in accordance with section 42-1129, subsection B. 6. A property owner: (a) Remains ultimately responsible, accountable and liable for both: (i) The accuracy of information the property owner furnishes to the licensee. (ii) The return and payment of the full tax liability, including any penalties prescribed by section 42-1125. (b) Is subject to audit, as provided by law, of the records in the property owner's possession that are submitted to the licensee for the purposes of the electronic consolidated return. (c) May withdraw any of the property owner's properties from the electronic consolidated return on thirty days' written notice to the licensee, the department and the tax collector of the city or town. B. For the purposes of this section, "licensee" means a person who is licensed pursuant to title 32, chapter 20 and who is licensed with the department pursuant to section 42-5005, subsection M. 42-6014. Municipal jet fuel excise tax The area of taxation of jet fuel, as defined in section 42-5351, is a matter of statewide concern. Any municipal tax on jet fuel is subject to the following limits and requirements: 1. The application of the tax is limited to amounts of not more than ten million gallons of jet fuel purchased by each purchaser in each calendar year. The levy and measure of the tax must be structured to affirmatively exempt purchases in excess of ten million gallons per purchaser per year. 2. Beginning from and after November 30, 2017, the revenues generated by each public airport must be segregated in separate accounts for the exclusive expenditure for the capital or operating costs of the airport, the airport system or other local airport facilities owned or operated by the municipality and directly and substantially related to the air transportation of passengers or property. 42-6015. Municipal transaction privilege tax; food; exemption A. If a city, town or other taxing jurisdiction imposes a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on: 1. The sale of food items intended for human consumption as defined by rule adopted pursuant to section 42-5106 or items prescribed by section 42-5106, subsection D for home consumption, the tax must be applied uniformly with respect to all food, and an additional tax or fee differential may not be assessed or applied with respect to any specific food item. 2. The sale of food items intended for human consumption as defined by rule adopted pursuant to section 42-5106 or items prescribed by section 42-5106, subsection D for consumption on the premises, the tax must be applied uniformly with respect to all food items, and an additional tax or fee differential may not be assessed or applied with respect to any specific food item. B. A city, town or other taxing jurisdiction may not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, with respect to: 1. The manufacture, wholesale or distribution to or among any wholesalers, distributors or retailers, of food items intended for human consumption as defined by rule adopted pursuant to section 42-5106 or items prescribed by section 42-5106, subsection D for home consumption or for consumption on the premises. 2. Any container or packaging used exclusively for transporting, protecting or consuming food items intended for human consumption as defined by rule adopted pursuant to section 42-5106 or items prescribed by section 42-5106, subsection D for home consumption or for consumption on the premises. 3. The sale of food or other items purchased with United States department of agriculture food stamp coupons issued under the food stamp act of 1977 (P.L. 95-113; 91 Stat. 958) or food instruments issued under section 17 of the child nutrition act (P.L. 95-627; 92 Stat. 3603; P.L. 99-661, section 4302; 42 United States Code section 1786) but may impose such a tax consistent with this section on other sales of food. 4. The sale of low or reduced-cost articles of food or drink to eligible elderly or homeless persons or persons with a disability by a business subject to tax under the restaurant classification pursuant to section 42-5074 that contracts with the department of economic security and that is approved by the food and nutrition service of the United States department of agriculture pursuant to the supplemental nutrition assistance program established by the food and nutrition act of 2008 (7 United States Code sections 2011 through 2036c), if the purchases are made with the benefits issued pursuant to the supplemental nutrition assistance program. 42-6016. Mobile food vendors; definitions A. A city, town or other taxing jurisdiction may levy a transaction privilege, sales, use, franchise or other similar tax or fee as provided by the model city tax code on a person engaging in business as a mobile food vendor subject to the restaurant classification pursuant to section 42-5074 for sales of food or beverages for immediate service and consumption and the retail classification pursuant to section 42-5061 for sales of incidental retail items if the adopted tax: 1. Applies only with respect to transactions that occur within the jurisdictional boundaries of the city, town or taxing jurisdiction. 2. Is administered in a manner that is consistent with the treatment of restaurants or similar establishments where food or beverages are prepared and served for consumption on or off the premises. 3. Is administered, collected and enforced by the department and remitted to the city, town or other taxing jurisdiction in a uniform manner. B. The taxpayer shall maintain records that show separately the taxable receipts from transactions in the respective cities, towns or other taxing jurisdictions in which the taxpayer conducts business. If the taxpayer fails to comply with this subsection, the department shall collect the tax based on the taxpayer's total receipts, applying the highest tax rate levied by any city, town or other taxing jurisdiction. C. For the purposes of this section: 1. "Mobile food unit" means a food establishment that is licensed by this state, that is readily movable and that dispenses food or beverages for immediate service and consumption and other incidental retail items from any vehicle as defined in section 28-101. 2. "Mobile food vendor" means any person who owns, controls, manages or leases a mobile food unit or contracts with a person to prepare foods and vend from, drive or operate a mobile food unit. 42-6017. Municipal taxation of businesses selling tangible personal property at retail; state preemption; exceptions; definitions A. Except as provided in this section, section 42-5061 supersedes all city or town ordinances or other local laws insofar as the ordinances or local laws now or hereafter relate to the taxation of business activities classified under section 42-5061. B. The municipal tax rate for businesses selling tangible personal property at retail for marketplace facilitators is the municipal tax rate that is in effect in the city or town for businesses selling tangible personal property at retail on September 30, 2019, until the city or town changes the tax rate. C. A city or town may: 1. Notwithstanding section 42-5061, subsection A, paragraph 15, levy a transaction privilege tax on the gross proceeds of sales or gross income derived from the business of selling food at retail by the persons described in section 42-5102, subsection A, subject to the conditions of sections 42-5074, 42-5101 and 42-6015. 2. Notwithstanding section 42-5061, subsection A, paragraph 17, levy a transaction privilege tax on the gross proceeds of sales or gross income derived from a bookstore selling textbooks that are required by any state university or community college. 3. Notwithstanding section 42-5061, subsection A, paragraph 33, paragraph 42, subdivision (b) and paragraph 43 and subsection B, paragraph 5, continue to levy an existing transaction privilege tax that was levied on or before May 1, 2019 on the gross proceeds of sales or gross income derived from the sales of: (a) Propagative materials to persons who use those items to commercially produce agricultural, horticultural, viticultural or floricultural crops in this state. This subdivision does not apply and a city or town may not continue to levy a transaction privilege tax pursuant to this subdivision as follows: (i) For a city or town with a population of fifty thousand persons or less, from and after June 30, 2021. (ii) For a city or town with a population of more than fifty thousand persons, from and after December 31, 2019. (b) Livestock and poultry feed, salts, vitamins and other additives for livestock or poultry consumption that are sold to persons for use or consumption by their own livestock or poultry, for use or consumption in the businesses of farming, ranching and producing or feeding livestock, poultry, or livestock or poultry products or for use or consumption in noncommercial boarding of livestock. (c) Implants used as growth promotants and injectable medicines, not already exempt under section 42-5061, subsection A, paragraph 8, for livestock or poultry owned by or in possession of persons who are engaged in producing livestock, poultry, or livestock or poultry products or who are engaged in feeding livestock or poultry commercially. This subdivision does not apply and a city or town may not continue to levy a transaction privilege tax pursuant to this subdivision as follows: (i) For a city or town with a population of fifty thousand persons or less, from and after June 30, 2021. (ii) For a city or town with a population of more than fifty thousand persons, from and after December 31, 2019. (d) Neat animals, horses, asses, sheep, ratites, swine or goats used or to be used as breeding or production stock, including sales of breedings or ownership shares in such animals used for breeding or production. This subdivision does not apply and a city or town may not continue to levy a transaction privilege tax pursuant to this subdivision as follows: (i) For a city or town with a population of fifty thousand persons or less, from and after June 30, 2021. (ii) For a city or town with a population of more than fifty thousand persons, from and after December 31, 2019. 4. Levy a transaction privilege tax on the gross proceeds of sales or gross income derived from the sale of nonmetalliferous mined materials at retail. 5. Notwithstanding section 42-5061, subsection A, paragraph 59, levy a transaction privilege tax on the gross proceeds of sales or gross income derived from the sale of works of fine art, as defined in section 44-1771, at an art auction or gallery in this state to nonresidents of this state for use outside this state if the vendor ships or delivers the work of fine art to a destination outside this state. 6. Notwithstanding section 42-5061, subsection A, paragraph 28 or section 42-5122, levy a transaction privilege tax on the gross proceeds of sales or gross income derived from the sale of a motor vehicle to: (a) A nonresident of this state if the purchaser's state of residence does not allow a corresponding use tax exemption to the tax imposed by chapter 5, article 1 of this title and if the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01. This subdivision does not apply if the purchaser takes possession of the vehicle outside of this state. (b) An enrolled member of an Indian tribe who resides on the Indian reservation established for that tribe, except if possession of the vehicle is received on the enrolled member's Indian reservation. 7. Exempt from transaction privilege, sales, use or other similar tax the sale of paintings, sculptures or similar works of fine art, if such works of fine art are sold by the original artist. For the purposes of this paragraph, fine art does not include an art creation such as jewelry, macramé, glasswork, pottery, woodwork, metalwork, furniture or clothing if the art creation has a dual purpose, both aesthetic and utilitarian, whether sold by the artist or by another person. D. For the purposes of this section: 1. "Food" has the same meaning prescribed by rule adopted by the department pursuant to section 42-5106. 2. "Marketplace facilitator" has the same meaning prescribed in section 42-5001. 3. "Poultry" includes ratites. 4. "Propagative materials": (a) Includes seeds, seedlings, roots, bulbs, liners, transplants, cuttings, soil and plant additives, agricultural minerals, auxiliary soil and plant substances, micronutrients, fertilizers, insecticides, herbicides, fungicides, soil fumigants, desiccants, rodenticides, adjuvants, plant