SB 1398 — TPT deductions; computer data centers

On or before the fifth anniversary of the certification of a new computer data center, the owner or operator shall notify the authority in writing that the computer data center for which the certification is requested has or has not satisfied the requirements prescribed in subsection E, paragraph 1 of this section.  Until a new computer data center satisfies the requirements prescribed in subsection E, paragraph 1 of this section, the owner or operator shall keep detailed records of all investment created by the new computer data center, including costs of land, buildings, improvements, modular data centers and computer data center equipment, and all tax relief directly received by the owner or operator.  This subsection does not apply to an existing computer data center.

G.

If the authority determines that:

1.

A new computer data center that is certified under subsection E, paragraph 1 of this section has not complied with the requirements and time periods prescribed by subsection E, paragraph 1 of this section, the authority shall revoke the computer data center's certification.  If the certification is revoked, the qualification period of any owner, operator or qualified colocation tenant of the computer data center automatically terminates, and the department of revenue may recapture all or part of the tax relief provided directly to the owners and operators.  A qualified colocation tenant is not subject to recapture of any part of tax relief received pursuant to this section, except that a contributing qualified colocation tenant may be subject to recapture if they are it is located in a computer data center that is certified from and after August 31, 2016.  An owner or operator may appeal any revocation under this paragraph pursuant to chapter 6, article 10 of this title.

2.

There has been a violation of subsection M of this section with respect to a computer data center:

(a) The authority shall revoke the computer data center's certification and, if revoked, the qualification period of any owner, operator or qualified colocation tenant of the computer data center automatically terminates.

(b) The department of revenue may not recapture any tax relief provided directly to the owner, operator or qualified colocation tenant before the date of revocation.

(c) An owner or operator may appeal any revocation under this paragraph pursuant to chapter 6, article 10 of this title.

H.

The authority and the department of revenue shall adopt rules and prescribe forms and procedures as necessary for the purposes of this section.

I.  ProprietaryI. business information contained in the application described in subsection B of this section, the written notice described in subsection F of this section and the list described in subsection J of this section are confidential and shall not be disclosed to the public except that the information shall be transmitted to the department of revenue.  The authority or the department may disclose the name of a computer data center that has been certified pursuant to this section.

J.  TheProprietary ownerbusiness orinformation operatorcontained shallin provide the authorityapplication anddescribed thein departmentsubsection ofB revenue with a list of qualifiedthis colocationsection, tenants,the includingwritten thenotice commencementdescribed andin expirationsubsection datesF of eachthis qualifiedsection colocationand tenant'sthe agreementlist todescribed usein orsubsection occupyJ all or part of thethis computersection dataare center,confidential and shall notifynot thebe authoritydisclosed andto the departmentpublic ofexcept anythat changesthe withininformation thirtyshall days. be Thetransmitted failure of an owner or operator to provide the list or notify the authority and department of revenuerevenue.  ofThe changesauthority withinor the requireddepartment timemay aredisclose isthe notname grounds for termination of thea computer data center'scenter certification,that buthas maybeen precludecertified unlistedpursuant colocationto tenantsthis fromsection. receiving tax relief until the list is provided or updated.

K.  ExceptJ. as provided in subsection G of this section, if a computer data center has been certified, the certification remains in effect, even in the event of a future transfer, sale or disposition, directly or indirectly, of the computer data center.

L.  ForThe owner or operator shall provide the purposesauthority and the department of qualifyingrevenue with a list of qualified colocation tenants, including the commencement and continuingexpiration asdates aof sustainableeach redevelopmentqualified project:colocation tenant's agreement to use or occupy all or part of the computer data center, and shall notify the authority and the department of any changes within thirty days.  The failure of an owner or operator to provide the list or notify the authority and department of revenue of changes within the required time are is not grounds for termination of the computer data center's certification, but may preclude unlisted colocation tenants from receiving tax relief until the list is provided or updated.

1.  AfterK. receiving certification, an owner may substantially demolish all or part of an existing building to the extent reasonably necessary to accommodate future computer data center use, and the demolition is not cause for loss of certification as a sustainable redevelopment project.  An existing building that has been substantially demolished before certification is not eligible to qualify as a sustainable redevelopment project.  2.  An owner or operator may expand the boundaries of a certified computer data center by increasing the size of an existing building within a sustainable redevelopment project or by building additional improvements in an unlimited manner to the extent the expansion is constructed on the same parcel of land on which the original sustainable redevelopment project is located or on a contiguous parcel, regardless of whether the contiguous parcel was within the original description of the boundaries of the certified computer data center.  Expansion activities do not prevent a facility from maintaining its classification as a sustainable redevelopment project.

3.  AllExcept constructionas activitiesprovided andin investmentssubsection relatedG toof demolitionthis andsection, expansionif activitiesa describedcomputer data center has been certified, the certification remains in thiseffect, subsectioneven arein consideredthe toevent beof a partfuture transfer, sale or disposition, directly or indirectly, of the sustainablecomputer redevelopmentdata project.center.

M.  ThisL. section does not allow a computer data center to do either of the following:

1.  GenerateFor electricitythe forpurposes resaleof purposes.qualifying and continuing as a sustainable redevelopment project:

2.  Generate,1. provide or sell electricity outside of the computer data center.

N.  TheAfter receiving certification, an owner may substantially demolish all or operatorpart mayof bean aexisting singlebuilding individualto orthe entityextent orreasonably multiplenecessary affiliatedto entities.accommodate future computer data center use, and the demolition is not cause for loss of certification as a sustainable redevelopment project.

O.  ForAn theexisting purposesbuilding ofthat thishas section:been substantially demolished before certification is not eligible to qualify as a sustainable redevelopment project.  2.

1.  "ComputerAn dataowner center"or meansoperator allmay orexpand partthe boundaries of a facilitycertified thatcomputer maydata becenter composedby increasing the size of multiplean businessesexisting orbuilding owners,within thata issustainable redevelopment project or willby bebuilding predominantlyadditional usedimprovements in an unlimited manner to housethe workingextent serversthe andexpansion thatis mayconstructed haveon uninterruptiblethe energysame supplyparcel orof generatorland backupon power,which the original sustainable redevelopment project is located or both,on coolinga systems,contiguous towersparcel, andregardless otherof temperaturewhether controlthe infrastructure.contiguous parcel was within the original description of the boundaries of the certified computer data center.  Expansion activities do not prevent a facility from maintaining its classification as a sustainable redevelopment project.

2.  "Computer3. data center equipment" means equipment that is used to outfit, operate or benefit a computer data center and component parts, installations, refreshments, replacements and upgrades to this equipment, regardless of whether affixed to or incorporated into real property, and whether owned, leased or used by the owner or operator pursuant to a contract for the right to use the equipment, including:

(a)  AllAll equipmentconstruction necessaryactivities forand theinvestments transformation,related generation, distribution or management of electricity that is required to operatedemolition computerand serverexpansion equipment,activities includingdescribed generators,in uninterruptiblethis energy,subsection supplies,are conduit,considered gaseousto fuelbe piping,a cabling,part ductof banks,the switches,sustainable switchboards,redevelopment batteriesproject. and testing equipment.

(b)  AllM. equipment necessary to cool and maintain a controlled environment for the operation of the computer server and other components of the computer data center, including mechanical equipment, refrigerant piping, gaseous fuel piping, adiabatic and free cooling systems, cooling towers, water softeners, air handling units, indoor direct exchange units, fans, ducting and filters.

(c)  AllThis watersection conservationdoes systems,not includingallow facilitiesa orcomputer mechanismsdata thatcenter are designed to collect,do conserveeither andof reusethe water.following:

(d)  All1. enabling software, computer server equipment, chassis, networking equipment, switches, racks, cabling, trays and conduit.

(e)  AllGenerate monitoringelectricity equipmentfor andresale securitypurposes. systems.

(f)  Modular2. data centers and preassembled components of any item described in this paragraph, including components used in the manufacturing of modular data centers.

(g)  OtherGenerate, tangibleprovide personalor propertysell thatelectricity isoutside essential to the operations of athe computer data center.

3.  "ContributingN. qualified colocation tenant" means a qualified colocation tenant that is an operator or that had its anticipated investment included in an application for certification for the purposes of satisfying subsection E, paragraph 1 of this section.

4.  "ExistingThe building"owner meansor anyoperator existingmay verticalbe building improvement located at a facility used for commercial purposes at the time of its acquisition by an owner, but not including single familyindividual residentialor structures,entity barns or othermultiple agriculturalaffiliated structures.entities.

5.  "ExistingO. computer data center" means a computer data center that is certified under subsection E, paragraph 2 of this section.

6.  "Facility"For meansthe onepurposes or more parcels of land in this statesection: and any structures and personal property contained on the land.

7.  "Investment"1. means all monies spent to acquire a facility regardless of prior use and all monies spent to construct or expand a computer data center, including costs of land, buildings, improvements, modular data centers and computer data center equipment.  For new data centers, investment includes all costs incurred on or after a date that is thirty days before the date the application is submitted to the authority.

8.  "Modular"Computer data center" means all or part of a portablefacility systemthat may be composed of informationmultiple technology,businesses climateor control,owners, energythat supplyis andor energywill distributionbe machinery,predominantly equipmentused to house working servers and relatedthat tangiblemay personalhave propertyuninterruptible containedenergy insupply anor intermodalgenerator freightbackup containerpower, or similarboth, structure.cooling systems, towers and other temperature control infrastructure.

9.  "New2. computer data center" means a computer data center that is certified under subsection E, paragraph 1 of this section.

10.  "Operator""Computer meansdata anycenter individualequipment" ormeans entityequipment that operatesis used to outfit, operate or benefit a computer data center asand ancomponent operatorparts, orinstallations, lessorrefreshments, orreplacements pursuantand upgrades to athis contractequipment, withregardless anof ownerwhether oraffixed lessor. to Operatoror includesincorporated ainto licensedreal propertyproperty, managementand company,whether aowned, propertyleased lessor or anyused otherby individualthe owner or entityoperator responsiblepursuant to a contract for the control,right oversightto oruse maintenancethe ofequipment, aincluding: facility.

11.  "Qualification(a) period"All means:equipment necessary for the transformation, generation, distribution or management of electricity that is required to operate computer server equipment, including generators, uninterruptible energy, supplies, conduit, gaseous fuel piping, cabling, duct banks, switches, switchboards, batteries and testing equipment.

(a)  With(b) respectAll toequipment thenecessary ownerto orcool operatorand ofmaintain a computercontrolled dataenvironment center,for a period of time beginning on the effectiveoperation date of the computer dataserver center's certification and expiringother atcomponents the end of the tenth full calendar year following the calendar year containing the effective date, except, if a computer data centercenter, isincluding amechanical sustainableequipment, redevelopmentrefrigerant project,piping, qualificationgaseous periodfuel meanspiping, aadiabatic period of time beginning on the effective date of the computer data center's certification and expiringfree atcooling thesystems, endcooling oftowers, thewater twentiethsofteners, fullair calendarhandling yearunits, followingindoor thedirect calendarexchange yearunits, containingfans, theducting effectiveand date.filters.

(b)  With(c) respectAll towater theconservation qualifiedsystems, colocationincluding tenantfacilities of the owner or operatormechanisms of a computer data center certified under this section, a period of time beginning on the date that theare qualifieddesigned colocationto tenantcollect, entersconserve into an agreement concerning the use or occupancy of the computer data center and expiringreuse atwater. the earlier of the expiration of the term of the agreement or the tenth full calendar year following the calendar year in which the qualified colocation tenant entered into the agreement, except, if a computer data center is a sustainable redevelopment project, qualification period means a period of time beginning on the date that the qualified colocation tenant enters into an agreement concerning the use or occupancy of the computer data center and expiring at the earlier of the expiration of the term of the agreement or the twentieth full calendar year following the calendar year in which the tenant entered into the agreement.  The qualification period for a qualified colocation tenant may not extend beyond the qualification period for the owner or operator of the computer data center.

12.  "Qualified(d) colocationAll tenant"enabling meanssoftware, an entity that contracts with the owner, the operator or another qualified colocation tenant of a computer dataserver centerequipment, thatchassis, isnetworking certifiedequipment, pursuantswitches, toracks, thiscabling, sectiontrays toand useconduit. or occupy all or part of the computer data center for at least five hundred kilowatts per month for a period of two or more years.

13.  "Sustainable(e) redevelopmentAll project"monitoring meansequipment a computer data center that satisfies the requirements in subsection E of this section and issecurity either:systems.

(a)  A(f) newlyModular constructed data center,centers withand atpreassembled leastcomponents aof twoany hundreditem milliondescribed dollarin $200,000,000this investment,paragraph, thatincluding attainscomponents certificationused under the energy star or green globes standard, the leadership in energy and environmental design green building rating standard developed by the Unitedmanufacturing Statesof greenmodular buildingdata councilcenters. or an equivalent green building standard and was not previously certified under these standards.

(b)  A(g) dataOther centertangible personal property that occupiesis anessential existingto facilitythe thatoperations either:of a computer data center.

(i)  Was3. at least fifty percent vacant for six of the twelve consecutive months before the acquisition by purchase or lease of or with respect to the facility.

(ii)  Attains"Contributing certificationqualified undercolocation thetenant" energymeans stara orqualified greencolocation globestenant standard,that theis leadershipan inoperator energyor andthat environmentalhad designits greenanticipated buildinginvestment ratingincluded standardin developedan byapplication thefor Unitedcertification Statesfor greenthe buildingpurposes councilof orsatisfying ansubsection equivalentE, greenparagraph building1 standardof andthis wassection. not previously certified under these standards.

14.  "Tax4. relief" means the deduction deductions of the gross proceeds of sale or gross income from the sale, use, installation, assembly, repair or maintenance of qualified computer data center equipment as prescribed by section sections 42‑5061, 42‑5075, 42‑5159 or and 42‑6004 that is installed in for use at a computer data center.END_STATUTE Sec. 2.  Section 42-5061, Arizona Revised Statutes, as amended by Laws 2019, chapter 273, section 7 and chapter 288, section 1, is amended to read:

START_STATUTE42-5061.  Retail"Existing classification;building" means any existing vertical building improvement located at a facility used for commercial purposes at the time of its acquisition by an owner, but not including single family residential structures, barns or other agricultural structures.

definitions5. A.  The retail classification is comprised of the business of selling tangible personal property at retail.  The tax base for the retail classification is the gross proceeds of sales or gross income derived from the business.  The tax imposed on the retail classification does not apply to the gross proceeds of sales or gross income from:

1.  Professional"Existing orcomputer personaldata servicecenter" occupationsmeans ora businessescomputer thatdata involvecenter salesthat oris transferscertified ofunder tangiblesubsection personalE, propertyparagraph only2 asof inconsequentialthis elements.section.

2.  Services6. rendered in addition to selling tangible personal property at retail.

3.  Sales"Facility" ofmeans warrantyone or servicemore contracts.  Theparcels storage, use or consumption of tangibleland personalin propertythis providedstate underand theany conditionsstructures ofand suchpersonal contractsproperty iscontained subjecton tothe taxland. under section 42‑5156.

4.  Sales7. of tangible personal property by any nonprofit organization organized and operated exclusively for charitable purposes and recognized by the United States internal revenue service under section 501(c)(3) of the internal revenue code.

5.  Sales"Investment" means all monies spent to personsacquire engageda infacility businessregardless classifiedof underprior theuse restaurantand classificationall monies spent to construct or expand a computer data center, including costs of articlesland, usedbuildings, byimprovements, humanmodular beingsdata forcenters food,and drinkcomputer ordata condiment,center whetherequipment.  simple,For mixednew data centers, investment includes all costs incurred on or compounded.after a date that is thirty days before the date the application is submitted to the authority.

6.  Business8. activity that is properly included in any other business classification that is taxable under this article.

7.  The"Modular saledata center" means a portable system of stocksinformation technology, climate control, energy supply and bonds.energy distribution machinery, equipment and related tangible personal property contained in an intermodal freight container or similar structure.

8.  Drugs9. and medical oxygen, including delivery hose, mask or tent, regulator and tank, on the prescription of if prescribed by a member of the medical, dental or veterinarian profession who is licensed by law to administer such substances.

9.  Prosthetic"New appliancescomputer asdata definedcenter" inmeans section 23‑501 and as prescribed or recommended by a healthcomputer professionaldata whocenter that is licensedcertified pursuantunder tosubsection titleE, 32,paragraph chapter1 7,of 8,this 11,section. 13, 14, 15, 16, 17 or 29.

10.  Insulin,10. insulin syringes and glucose test strips.

11.  Prescription"Operator" eyeglassesmeans any individual or contactentity lenses.that operates a computer data center as an operator or lessor or pursuant to a contract with an owner or lessor.  Operator includes a licensed property management company, a property lessor or any other individual or entity responsible for the control, oversight or maintenance of a facility.

12.  Hearing11. aids as defined in section 36‑1901.

13.  Durable"Qualification medicalperiod" equipmentmeans: that has a centers for medicare and medicaid services common procedure code, is designated reimbursable by medicare, is prescribed by a person who is licensed under title 32, chapter 7, 8, 13, 14, 15, 17 or 29, 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.

14.  Sales(a) With respect to the owner or operator of motora vehiclescomputer todata nonresidentscenter, a period of thistime statebeginning foron usethe outsideeffective thisdate stateof ifthe computer data center's certification and expiring at the motorend vehicleof dealerthe shipstenth orfull deliverscalendar year following the motorcalendar vehicleyear tocontaining the effective date, except, if a destinationcomputer outdata center is a sustainable redevelopment project, qualification period means a period of thistime state.beginning on the effective date of the computer data center's certification and expiring at the end of the twentieth full calendar year following the calendar year containing the effective date.

15.  Food,(b) asWith providedrespect into andthe subjectqualified tocolocation tenant of the conditionsowner or operator of articlea 3computer ofdata center certified under this chaptersection, a period of time beginning on the date that the qualified colocation tenant enters into an agreement concerning the use or occupancy of the computer data center and sectionsexpiring 42‑5074at the earlier of the expiration of the term of the agreement or the tenth full calendar year following the calendar year in which the qualified colocation tenant entered into the agreement, except, if a computer data center is a sustainable redevelopment project, qualification period means a period of time beginning on the date that the qualified colocation tenant enters into an agreement concerning the use or occupancy of the computer data center and 42‑6017.expiring at the earlier of the expiration of the term of the agreement or the twentieth full calendar year following the calendar year in which the tenant entered into the agreement.  The qualification period for a qualified colocation tenant may not extend beyond the qualification period for the owner or operator of the computer data center.

16.  Items12. purchased with United States department of agriculture coupons issued under the supplemental nutrition assistance program pursuant to the food and nutrition act of 2008 (P.L.

"Qualified colocation tenant" means an entity that contracts with the owner, the operator or another qualified colocation tenant of a computer data center that is certified pursuant to this section to use or occupy all or part of the computer data center for at least five hundred kilowatts per month for a period of two or more years.

13.

"Sustainable redevelopment project" means a computer data center that satisfies the requirements in subsection E of this section and is either:

(a) A newly constructed data center, with at least a two hundred million dollar $200,000,000 investment, that attains certification under the energy star or green globes standard, the leadership in energy and environmental design green building rating standard developed by the United States green building council or an equivalent green building standard and was not previously certified under these standards.

(b) A data center that occupies an existing facility that either:

(i) Was at least fifty percent vacant for six of the twelve consecutive months before the acquisition by purchase or lease of or with respect to the facility.

(ii) Attains certification under the energy star or green globes standard, the leadership in energy and environmental design green building rating standard developed by the United States green building council or an equivalent green building standard and was not previously certified under these standards.

14.

"Tax relief" means the deduction deductions of the gross proceeds of sale or gross income from the sale, use, installation, assembly, repair or maintenance of qualified computer data center equipment as prescribed by section sections 42-5061, 42-5075, 42-5159 or and 42-6004 that is installed in for use at a computer data center.END_STATUTE Sec. 2.

Section 42-5061, Arizona Revised Statutes, as amended by Laws 2019, chapter 273, section 7 and chapter 288, section 1, is amended to read:

START_STATUTE42-5061.

Retail classification;

definitions A.

The retail classification is comprised of the business of selling tangible personal property at retail.

The tax base for the retail classification is the gross proceeds of sales or gross income derived from the business.  The tax imposed on the retail classification does not apply to the gross proceeds of sales or gross income from:

1.

Professional or personal service occupations or businesses that involve sales or transfers of tangible personal property only as inconsequential elements.

2.

Services rendered in addition to selling tangible personal property at retail.

3.

Sales of warranty or service contracts.

The storage, use or consumption of tangible personal property provided under the conditions of such contracts is subject to tax under section 42-5156.

4.

Sales of tangible personal property by any nonprofit organization organized and operated exclusively for charitable purposes and recognized by the United States internal revenue service under section 501(c)(3) of the internal revenue code.

5.

Sales to persons engaged in business classified under the restaurant classification of articles used by human beings for food, drink or condiment, whether simple, mixed or compounded.

6.

Business activity that is properly included in any other business classification that is taxable under this article.

7.

The sale of stocks and bonds.

8.

Drugs and medical oxygen, including delivery hose, mask or tent, regulator and tank, on the prescription of if prescribed by a member of the medical, dental or veterinarian profession who is licensed by law to administer such substances.

9.

Prosthetic appliances as defined in section 23-501 and as prescribed or recommended by a health professional who is licensed pursuant to title 32, chapter 7, 8, 11, 13, 14, 15, 16, 17 or 29.

10.

Insulin, insulin syringes and glucose test strips.

11.

Prescription eyeglasses or contact lenses.

12.

Hearing aids as defined in section 36-1901.

13.

Durable medical equipment that has a centers for medicare and medicaid services common procedure code, is designated reimbursable by medicare, is prescribed by a person who is licensed under title 32, chapter 7, 8, 13, 14, 15, 17 or 29, 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.

14.

Sales of motor vehicles to nonresidents of this state for use outside this state if the motor vehicle dealer ships or delivers the motor vehicle to a destination out of this state.

15.

Food, as provided in and subject to the conditions of article 3 of this chapter and sections 42-5074 and 42-6017.

16.

Items purchased with United States department of agriculture coupons issued under the supplemental nutrition assistance program pursuant to the food and nutrition act of 2008 (P.L.

7 United States Code sections 2011 through 2036b) by the United States department of agriculture food and nutrition service or food instruments issued under section 17 of the child nutrition act (P.L. 95‑627;(P.L. 95-627;

P.L. 99‑661,P.L. 99-661, section 4302;

17.  Textbooks17. by any bookstore that are required by any state university or community college.

18.  FoodTextbooks andby drinkany tobookstore a person that isare engagedrequired inby aany businessstate thatuniversity isor classifiedcommunity undercollege. the restaurant classification and that provides such food and drink without monetary charge to its employees for their own consumption on the premises during the employees' hours of employment.

19.  Articles18. of food, drink or condiment and accessory tangible personal property to a school district or charter school if such articles and accessory tangible personal property are to be prepared and served to persons for consumption on the premises of a public school within the district or on the premises of the charter school during school hours.

20.  LotteryFood ticketsand ordrink sharesto pursuanta person that is engaged in a business that is classified under the restaurant classification and that provides such food and drink without monetary charge to titleits 5,employees chapterfor 5.1,their article 1.own consumption on the premises during the employees' hours of employment.

21.  The19. sale of cash equivalents and the sale of precious metal bullion and monetized bullion to the ultimate consumer, but the sale of coins or other forms of money for manufacture into jewelry or works of art is subject to the tax and 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.  For the purposes of this paragraph:

(a)  "CashArticles equivalents"of meansfood, itemsdrink or intangibles,condiment whether or not negotiable, that are sold to one or more persons, through which a value denominated in money is purchased in advance and mayaccessory be redeemed in full or in part for tangible personal property,property intangiblesto ora services.  Cashschool equivalentsdistrict include gift cards, stored value cards, gift certificates, vouchers, traveler's checks, money orders or othercharter instruments,school ordersif or electronic mechanisms, such asarticles anand electronicaccessory code,tangible personal identificationproperty numberare orto digitalbe paymentprepared mechanism,and orserved anyto otherpersons prepaidfor intangibleconsumption righton tothe acquirepremises tangibleof personala property,public intangiblesschool orwithin services in the future,district whetheror fromon the sellerpremises of the cashcharter equivalentschool orduring fromschool anotherhours. person.  Cash equivalents do not include either of the following:

(i)  Items20. or intangibles that are sold to one or more persons, through which a value is not denominated in money.

(ii)  PrepaidLottery callingtickets cards or prepaidshares authorizationpursuant numbersto fortitle telecommunications5, serviceschapter made5.1, taxablearticle 1. by subsection P of this section.

(b)  "Monetized21. bullion" means coins and other forms of money that are manufactured from gold, silver or other metals and that have been or are used as a medium of exchange in this or another state, the United States or a foreign nation.

(c)  "PreciousThe metalsale bullion"of meanscash equivalents and the sale of precious metal,metal includingbullion gold,and silver,monetized platinum,bullion rhodiumto the ultimate consumer, but the sale of coins or other forms of money for manufacture into jewelry or works of art is subject to the tax and palladium,the thatgross hasproceeds beenof smeltedsales or refinedgross soincome derived from the redemption of any cash equivalent by the holder as a means of payment for goods or services that itsare valuetaxable dependsunder onthis itsarticle contentsis andsubject notto onthe itstax.  form.For the purposes of this paragraph:

22.  Motor(a) vehicle"Cash fuelequivalents" andmeans useitems fuelor thatintangibles, arewhether subjector tonot anegotiable, taxthat imposedare undersold titleto 28,one chapteror 16,more articlepersons, 1,through saleswhich of use fuel to a holdervalue ofdenominated ain validmoney singleis trippurchased usein fueladvance tax permit issued under section 28‑5739, sales of aviation fuel that are subject to the tax imposed under section 28‑8344 and salesmay ofbe jetredeemed fuelin thatfull areor subjectin topart thefor taxtangible imposedpersonal underproperty, articleintangibles 8or ofservices. this chapter.

23.  TangibleCash personalequivalents propertyinclude soldgift tocards, astored personvalue engagedcards, ingift thecertificates, businessvouchers, oftraveler's leasingchecks, money orders or rentingother instruments, orders or electronic mechanisms, such propertyas underan theelectronic code, personal propertyidentification rentalnumber classificationor ifdigital suchpayment propertymechanism, isor any other prepaid intangible right to beacquire leasedtangible personal property, intangibles or rentedservices byin suchthe person.future, whether from the seller of the cash equivalent or from another person.  Cash equivalents do not include either of the following:

24.  Tangible(i) personalItems property sold in interstate or foreignintangibles commercethat ifare prohibitedsold fromto beingone soor taxedmore bypersons, thethrough constitutionwhich ofa thevalue Unitedis Statesnot ordenominated thein constitutionmoney. of this state.

25.  Tangible(ii) personalPrepaid propertycalling soldcards to:or prepaid authorization numbers for telecommunications services made taxable by subsection P of this section.

(a)  A(b) qualifying"Monetized hospitalbullion" means coins and other forms of money that are manufactured from gold, silver or other metals and that have been or are used as defineda medium of exchange in sectionthis 42‑5001.or another state, the United States or a foreign nation.

(b)  A(c) qualifying"Precious healthmetal carebullion" organizationmeans asprecious definedmetal, inincluding sectiongold, 42‑5001silver, ifplatinum, therhodium tangibleand personalpalladium, propertythat ishas usedbeen bysmelted theor organizationrefined solelyso tothat provideits healthvalue anddepends medicalon relatedits educationalcontents and charitablenot services.on its form.

(c)  A22. qualifying health care organization as defined in section 42‑5001 if the organization is dedicated to providing educational, therapeutic, rehabilitative and family medical education training for blind and visually impaired children and children with multiple disabilities from the time of birth to age twenty‑one.

(d)  AMotor qualifyingvehicle communityfuel healthand centeruse asfuel definedthat inare subject to a tax imposed under title 28, chapter 16, article 1, sales of use fuel to a holder of a valid single trip use fuel tax permit issued under section 42‑5001.28-5739, sales of aviation fuel that are subject to the tax imposed under section 28-8344 and sales of jet fuel that are subject to the tax imposed under article 8 of this chapter.

(e)  A23. nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code and that regularly serves meals to the needy and indigent on a continuing basis at no cost.

(f)  ForTangible taxablepersonal periodsproperty beginningsold fromto and after June 30, 2001, a nonprofitperson charitableengaged organizationin that has qualified under section 501(c)(3) of the internalbusiness revenue code and that provides residential apartment housing for low income low-income persons over sixty‑two years of ageleasing inor arenting facilitysuch thatproperty qualifiesunder forthe apersonal federalproperty housingrental subsidy,classification if thesuch tangible personal property is used by the organization solely to providebe residentialleased apartmentor housingrented forby lowsuch incomeperson. low-income persons over sixty‑two years of age in a facility that qualifies for a federal housing subsidy.

(g)  A24. qualifying health sciences educational institution as defined in section 42‑5001.

(h)  AnyTangible personpersonal representingproperty orsold workingin oninterstate behalfor offoreign anothercommerce personif describedprohibited infrom subdivisionsbeing (a)so throughtaxed (g)by ofthe thisconstitution paragraphof if the tangibleUnited personalStates property is incorporated or fabricatedthe intoconstitution aof projectthis describedstate. in section 42‑5075, subsection O.

26.  Magazines25. or other periodicals or other publications by this state to encourage tourist travel.

27.  TangibleTangible personal property sold to:

(a)  A(a) personA thatqualifying ishospital subjectas todefined tax under this article by reason of being engaged in business classified under section 42‑507542-5001. or to a subcontractor working under the control of a person engaged in business classified under section 42‑5075, if the property so sold is any of the following:

(i)  Incorporated(b) orA fabricatedqualifying byhealth thecare personorganization intoas anydefined realin property,section structure,42-5001 project,if developmentthe ortangible improvementpersonal asproperty partis ofused by the business.organization solely to provide health and medical related educational and charitable services.

(ii)  Incorporated(c) orA fabricatedqualifying byhealth care organization as defined in section 42-5001 if the personorganization intois anydedicated projectto describedproviding ineducational, sectiontherapeutic, 42‑5075,rehabilitative subsectionand O.family medical education training for blind and visually impaired children and children with multiple disabilities from the time of birth to age twenty-one.

(iii)  Used(d) inA environmentalqualifying responsecommunity orhealth remediationcenter activitiesas underdefined in section 42‑5075,42-5001. subsection B, paragraph 6.

(b)  A(e) personA thatnonprofit ischaritable notorganization subject to tax under section 42‑5075 and that has beenqualified provided a copy of a certificate under section 42‑5009,501(c)(3) subsection L,of if the propertyinternal sorevenue soldcode isand incorporatedthat orregularly fabricatedserves bymeals theto person into the realneedy property,and structure,indigent project,on developmenta orcontinuing improvementbasis describedat inno thecost. certificate.

28.  The(f) saleFor taxable periods beginning from and after June 30, 2001, a nonprofit charitable organization that has qualified under section 501(c)(3) of the internal revenue code and that provides residential apartment housing for low income low-income persons over sixty-two years of age in a motorfacility vehiclethat to:qualifies for a federal housing subsidy, if the tangible personal property is used by the organization solely to provide residential apartment housing for low income low-income persons over sixty-two years of age in a facility that qualifies for a federal housing subsidy.

(a)  A(g) nonresidentA ofqualifying thishealth statesciences ifeducational theinstitution purchaser's state of residence does not allow a corresponding use tax exemption to the tax imposed by article 1 of this chapter and if the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribeddefined byin sectionssection 28‑215442-5001. and 28‑2154.01.

(b)  An(h) enrolledAny memberperson representing or working on behalf of ananother Indianperson tribedescribed whoin residessubdivisions on(a) through (g) of this paragraph if the Indiantangible reservationpersonal establishedproperty foris thatincorporated tribe.or fabricated into a project described in section 42-5075, subsection O.

29.  Tangible26. 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 in programs for persons with mental or physical disabilities if the programs are exclusively for training, job placement, rehabilitation or testing.

30.  SalesMagazines of tangible personal property by a nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6)other ofperiodicals the internal revenue code if the organization is associated with a major league baseball team or aother nationalpublications 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 beforeto Januaryencourage 1,tourist 2018travel. that were exempt from taxation under section 42‑5073.

31.  Sales27. of commodities, as defined by title 7 United States Code section 2, that are consigned for resale in a warehouse in this state in or from which the commodity is deliverable on a contract for future delivery subject to the rules of a commodity market regulated by the United States commodity futures trading commission.

32.  SalesTangible of tangible personal property bysold ato: nonprofit organization that is exempt from taxation under section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the internal revenue code if the organization sponsors or operates a rodeo featuring primarily farm and ranch animals and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

33.  Sales(a) ofA propagativeperson materialsthat is subject to personstax whounder usethis thosearticle itemsby toreason commerciallyof producebeing agricultural,engaged horticultural,in viticulturalbusiness classified under section 42-5075 or floriculturalto cropsa subcontractor working under the control of a person engaged in thisbusiness state. classified Forunder section 42-5075, if the purposesproperty ofso thissold paragraph,is "propagativeany materials":of the following:

(a)  Includes(i) seeds,Incorporated seedlings,or roots,fabricated bulbs,by liners,the transplants,person cuttings,into soilany andreal plantproperty, additives,structure, agriculturalproject, minerals,development auxiliaryor soilimprovement andas plantpart substances,of micronutrients,the fertilizers,business. insecticides, herbicides, fungicides, soil fumigants, desiccants, rodenticides, adjuvants, plant nutrients and plant growth regulators.

(b)  Except(ii) forIncorporated useor infabricated commerciallyby producingthe industrialperson hempinto as defined in section 3‑311, does not include any propagativeproject materialsdescribed used in producingsection any42-5075, part,subsection includingO. seeds, of any plant of the genus cannabis.

34.  Machinery,(iii) equipment,Used technology or related supplies that are only useful to assist a person with a physical disability as defined in sectionenvironmental 46‑191response or aremediation personactivities whounder has a developmental disability as defined in section 36‑55142-5075, orsubsection hasB, aparagraph head6. injury as defined in section 41‑3201 to be more independent and functional.

35.  Sales(b) A person that is not subject to tax under section 42-5075 and that has been provided a copy of naturala gascertificate under section 42-5009, subsection L, if the property so sold is incorporated or liquefiedfabricated petroleumby gasthe usedperson tointo propelthe areal motorproperty, vehicle.structure, project, development or improvement described in the certificate.

36.  Paper28. machine clothing, such as forming fabrics and dryer felts, sold to a paper manufacturer and directly used or consumed in paper manufacturing.

37.  Coal,The petroleum,sale coke,of natural gas, virgin fuel oil and electricity sold to a qualifiedmotor environmentalvehicle technologyto: manufacturer, producer or processor as defined in section 41‑1514.02 and directly used or consumed in the generation generating or provision of providing on-site power or energy solely for environmental technology manufacturing, producing or processing or environmental protection.  This paragraph shall apply applies 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 that does not manufacture paper, the time period shall begin begins with the date the first manufacturing, processing or production equipment is placed in service.

38.  Sales(a) ofA liquid,nonresident solidof orthis gaseousstate chemicals used in manufacturing, processing, fabricating, mining, refining, metallurgical operations, research and development and, beginning on January 1, 1999, printing, if using or consuming the chemicals,purchaser's alonestate or as part of anresidence integrateddoes systemnot ofallow chemicals,a involvescorresponding directuse contacttax withexemption theto materials from which the producttax isimposed producedby forarticle the1 purpose of causingthis orchapter permittingand allowingif athe chemicalnonresident orhas physicalsecured changea tospecial occurninety inday thenonresident materialsregistration aspermit partfor of the productionvehicle process.  This paragraph does not include chemicals that are used or consumed in activities such as packaging,prescribed storage or transportation but does not affect any deduction for such chemicals that is otherwise provided by thissections section.  For28-2154 the purposes of this paragraph, "printing" means a commercial printing operation and includes28-2154.01. job printing, engraving, embossing, copying and bookbinding.

39.  Through(b) DecemberAn 31,enrolled 1994,member personalof propertyan liquidationIndian transactions,tribe conductedwho byresides aon personalthe propertyIndian liquidator.  Fromreservation andestablished afterfor December 31, 1994, personal property liquidation transactions shall be taxable under this section provided that nothingtribe. in this subsection shall be construed to authorize the taxation of casual activities or transactions under this chapter.  For the purposes of this paragraph:

(a)  "Personal29. property liquidation transaction" means a sale of personal property made by a personal property liquidator acting solely on behalf of the owner of the personal property sold at the dwelling of the owner or on the death of any owner, on behalf of the surviving spouse, if any, any devisee or heir or the personal representative of the estate of the deceased, if one has been appointed.

(b)  "PersonalTangible personal property liquidator"purchased meansin this state by a personnonprofit whocharitable isorganization retainedthat tohas conductqualified aunder salesection 501(c)(3) of the United States internal revenue code and that engages in aand personaluses such property liquidationexclusively transaction.in programs for persons with mental or physical disabilities if the programs are exclusively for training, job placement, rehabilitation or testing.

40.  Sales30. 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.

41.  ASales motorof vehicletangible andpersonal anyproperty repairby anda replacementnonprofit partsorganization andthat tangibleis personalexempt propertyfrom becomingtaxation aunder partsection of501(c)(3), such501(c)(4) motoror vehicle501(c)(6) soldof tothe ainternal motorrevenue carriercode whoif thatthe organization is subjectassociated towith a feemajor prescribedleague inbaseball titleteam 28,or chaptera 16,national articletouring 4professional golfing association and whono thatpart isof engagedthe inorganization's net earnings inures to the businessbenefit of leasingany orprivate rentingshareholder suchor property.individual.

42.  SalesThis of: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 taxation under section 42-5073.

(a)  Livestock31. and poultry to persons engaging in the businesses of farming, ranching or producing livestock or poultry.

(b)  LivestockSales andof poultrycommodities, feed,as salts,defined vitaminsby andtitle other7 additivesUnited forStates livestockCode orsection poultry2, consumption that are soldconsigned to persons for useresale orin consumptiona bywarehouse theirin ownthis livestockstate orin poultry, for use or consumptionfrom inwhich the businessescommodity ofis farming,deliverable ranchingon anda producingcontract orfor feedingfuture livestock,delivery poultry,subject orto livestockthe orrules poultryof productsa orcommodity formarket useregulated orby consumption in noncommercial boarding of livestock.  For the purposesUnited ofStates thiscommodity paragraph,futures "poultry"trading includescommission. ratites.

43.  Sales32. of implants used as growth promotants and injectable medicines, not already exempt under paragraph 8 of this subsection, for livestock or poultry owned by or in possession of persons who that are engaged in producing livestock, poultry, or livestock or poultry products or who that are engaged in feeding livestock or poultry commercially.  For the purposes of this paragraph, "poultry" includes ratites.

44.  SalesSales of motortangible vehiclespersonal atproperty auctionby toa nonresidentsnonprofit oforganization thisthat stateis forexempt usefrom outsidetaxation thisunder statesection if501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the vehiclesinternal arerevenue shippedcode if the organization sponsors or deliveredoperates outa ofrodeo thisfeaturing state,primarily regardlessfarm ofand whereranch titleanimals toand no part of the motororganization's vehiclesnet passesearnings orinures itsto freethe onbenefit boardof point.any private shareholder or individual.

45.  Tangible33. personal property sold to a person engaged in business and subject to tax under the transient lodging classification if the tangible personal property is a personal hygiene item or articles used by human beings for food, drink or condiment, except alcoholic beverages, that are furnished without additional charge to and intended to be consumed by the transient during the transient's occupancy.

46.  SalesSales of alternativepropagative fuel,materials asto definedpersons inwho sectionuse 1‑215,those items to acommercially usedproduce oilagricultural, fuelhorticultural, burnerviticultural whoor hasfloricultural receivedcrops ain permitthis tostate.  burnFor usedthe oilpurposes orof usedthis oilparagraph, fuel"propagative undermaterials": section 49‑426 or 49‑480.

47.  Sales(a) ofIncludes materialsseeds, thatseedlings, areroots, purchasedbulbs, byliners, ortransplants, forcuttings, publiclysoil fundedand libraries,plant includingadditives, schoolagricultural districtminerals, libraries,auxiliary chartersoil schooland libraries,plant communitysubstances, collegemicronutrients, libraries,fertilizers, stateinsecticides, universityherbicides, librariesfungicides, orsoil federal,fumigants, state,desiccants, countyrodenticides, oradjuvants, municipalplant libraries,nutrients forand useplant bygrowth theregulators. public as follows:

(a)  Printed(b) orExcept photographicfor materials,use beginningin Augustcommercially 7,producing 1985.industrial hemp as defined in section 3-311, does not include any propagative materials used in producing any part, including seeds, of any plant of the genus cannabis.

(b)  Electronic34. or digital media materials, beginning July 17, 1994.

48.  TangibleMachinery, personalequipment, propertytechnology soldor torelated asupplies commercialthat airlineare andonly consistinguseful of food, beverages and condiments and accessories used for serving the food and beverages, if those items are to beassist provideda withoutperson additionalwith chargea tophysical passengersdisability foras consumptiondefined in flight.  Forsection the46-191 purposesor of this paragraph, "commercial airline" means a person holdingwho has a federaldevelopmental certificatedisability ofas publicdefined conveniencein andsection necessity36-551 or foreignhas aira carrierhead permitinjury foras airdefined transportationin tosection transport41-3201 persons,to propertybe ormore Unitedindependent Statesand mailfunctional. in intrastate, interstate or foreign commerce.

49.  Sales35. of alternative fuel vehicles if the 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 section 1‑215.

50.  SalesSales of anynatural spirituous,gas vinous or maltliquefied liquorpetroleum bygas aused personto thatpropel is licensed in this state as a wholesalermotor byvehicle. the department of liquor licenses and control pursuant to title 4, chapter 2, article 1.

51.  Sales36. of tangible personal property to be incorporated or installed as part of environmental response or remediation activities under section 42‑5075, subsection B, paragraph 6.

52.  SalesPaper ofmachine tangibleclothing, personalsuch propertyas byforming afabrics nonprofitand organizationdryer thatfelts, issold exemptto froma taxationpaper undermanufacturer sectionand 501(c)(6)directly ofused the internal revenue code if the organization produces, organizes or promotesconsumed culturalin orpaper civicmanufacturing. related festivals or events and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

53.  Application37. services that are designed to assess or test student learning or to promote curriculum design or enhancement purchased by or for any school district, charter school, community college or state university.  For the purposes of this paragraph:

(a)  "ApplicationCoal, services"petroleum, meanscoke, softwarenatural applicationsgas, providedvirgin remotelyfuel usingoil hypertextand transferelectricity protocolsold to a qualified environmental technology manufacturer, producer or anotherprocessor networkas protocol.defined in section 41-1514.02 and directly used or consumed in the generation generating or provision of providing on-site power or energy solely for environmental technology manufacturing, producing or processing or environmental protection.

(b)  "CurriculumThis designparagraph orshall enhancement"apply meansapplies planning,for implementingtwenty full consecutive calendar or reportingfiscal onyears coursesfrom ofthe study,date lessons,the assignmentsfirst orpaper othermanufacturing learningmachine activities.is placed in service.

54.  SalesIn the case of motoran vehicleenvironmental fueltechnology andmanufacturer, useproducer fuelor toprocessor awho qualifiedthat businessdoes undernot sectionmanufacture 41‑1516paper, forthe off-roadtime useperiod inshall harvesting,begin processingbegins orwith transportingthe qualifyingdate forestthe productsfirst removedmanufacturing, fromprocessing qualifyingor projectsproduction asequipment definedis placed in sectionservice. 41‑1516.

55.  Sales38. of repair parts installed in equipment used directly by a qualified business under section 41‑1516 in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41‑1516.

56.  SalesSales of liquid, solid or othergaseous transferschemicals ofused renewablein energymanufacturing, creditsprocessing, orfabricating, anymining, otherrefining, unitmetallurgical createdoperations, toresearch trackand energydevelopment derivedand, frombeginning renewableon energyJanuary resources. 1, For1999, printing, if using or consuming the purposeschemicals, alone or as part of thisan paragraph,integrated "renewablesystem energyof credit"chemicals, meansinvolves adirect unitcontact createdwith administrativelythe bymaterials from which the corporationproduct commissionis orproduced governingfor bodythe purpose of causing or permitting allowing a publicchemical poweror utilityphysical change to trackoccur kilowattin hoursthe materials as part of electricitythe derivedproduction fromprocess.  aThis renewableparagraph energydoes resourcenot include chemicals that are used or theconsumed kilowattin houractivities equivalentsuch ofas conventionalpackaging, energystorage resourcesor displacedtransportation bybut distributeddoes renewablenot energyaffect resources.any deduction for such chemicals that is otherwise provided by this section.

57.  ComputerFor 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"printing" datameans center",a "computercommercial dataprinting centeroperation equipment", "qualification period" and "qualifiedincludes colocationjob tenant"printing, haveengraving, theembossing, samecopying meaningsand prescribedbookbinding. in section 41‑1519.

58.  57.  Orthodontic39. devices dispensed by a dental professional who is licensed under title 32, chapter 11 to a patient as part of the practice of dentistry.

59.  58.  SalesThrough ofDecember tangible31, 1994, personal property incorporatedliquidation ortransactions, fabricatedconducted intoby a projectpersonal describedproperty inliquidator. section 42‑5075, subsection O, 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)  "AffiliatedFrom Indian"and meansafter anDecember individual31, Native1994, Americanpersonal Indianproperty wholiquidation istransactions dulyshall registeredbe ontaxable theunder tribalthis rollssection ofprovided thethat Indiannothing tribein forthis whosesubsection benefitshall be construed to authorize the Indiantaxation reservationof wascasual established.activities or transactions under this chapter.

(b)  "IndianFor reservation" means all lands that are within the limitspurposes of areasthis setparagraph: 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(a) tribe""Personal property liquidation transaction" means anya organizedsale nation,of tribe,personal bandproperty ormade communityby thata ispersonal recognizedproperty asliquidator anacting Indiansolely tribeon bybehalf of the Unitedowner Statesof departmentthe personal property sold at the dwelling of the interiorowner andor includeson the death of any entityowner, formedon underbehalf of the lawssurviving spouse, if any, any devisee or heir or the personal representative of the Indianestate tribe.of the deceased, if one has been appointed.

60.  59.  Sales(b) of"Personal worksproperty ofliquidator" finemeans art,a asperson definedwho inis sectionretained 44‑1771,to atconduct ana artsale 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 destinationpersonal outsideproperty thisliquidation state.transaction.

61.  60.  Sales40. of tangible personal property by a marketplace seller that are facilitated by a marketplace facilitator in which the marketplace facilitator has remitted or will remit the applicable tax to the department pursuant to section 42‑5014.

B.  InSales additionof tofood, thedrink deductionsand fromcondiment thefor taxconsumption basewithin prescribedthe bypremises subsection A of thisany section,prison, thejail grossor proceedsother ofinstitution salesunder orthe grossjurisdiction incomeof derivedthe fromstate salesdepartment of corrections, the followingdepartment categories of tangiblepublic personalsafety, propertythe shalldepartment beof deductedjuvenile fromcorrections theor taxa base:county sheriff.

1.  Machinery,41. or equipment, used directly in manufacturing, processing, fabricating, job printing, refining or metallurgical operations.  The terms "manufacturing", "processing", "fabricating", "job printing", "refining" and "metallurgical" as used in this paragraph refer to and include those operations commonly understood within their ordinary meaning.  "Metallurgical operations" includes leaching, milling, precipitating, smelting and refining.

2.  MiningA machinery,motor orvehicle equipment,and usedany directlyrepair inand thereplacement processparts ofand extractingtangible orespersonal orproperty mineralsbecoming froma thepart earthof forsuch commercialmotor purposes,vehicle includingsold equipmentto requireda tomotor preparecarrier thewho materialsthat foris extractionsubject andto handling,a loadingfee orprescribed transportingin suchtitle extracted28, materialchapter to16, thearticle surface. 4 "Mining"and includeswho underground,that surfaceis andengaged openin pitthe operationsbusiness forof extractingleasing oresor andrenting minerals.such property.

3.  Tangible42. personal property sold to persons engaged in business classified under the telecommunications classification, including a person representing or working on behalf of such a person in a manner described in section 42‑5075, subsection O, and consisting of central office switching equipment, switchboards, private branch exchange equipment, microwave radio equipment and carrier equipment including optical fiber, coaxial cable and other transmission media that are components of carrier systems.

4.  Machinery,Sales equipmentof: or transmission lines used directly in producing or transmitting electrical power, but not including distribution.

(a) Livestock and poultry to persons engaging in the businesses of farming, ranching or producing livestock or poultry.

(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.

For the purposes of this paragraph, "poultry" includes ratites.

43.

Sales of implants used as growth promotants and injectable medicines, not already exempt under paragraph 8 of this subsection, for livestock or poultry owned by or in possession of persons who that are engaged in producing livestock, poultry, or livestock or poultry products or who that are engaged in feeding livestock or poultry commercially.

For the purposes of this paragraph, "poultry" includes ratites.

44.

Sales of motor vehicles at auction to nonresidents of this state for use outside this state if the vehicles are shipped or delivered out of this state, regardless of where title to the motor vehicles passes or its free on board point.

45.

Tangible personal property sold to a person engaged in business and subject to tax under the transient lodging classification if the tangible personal property is a personal hygiene item or articles used by human beings for food, drink or condiment, except alcoholic beverages, that are furnished without additional charge to and intended to be consumed by the transient during the transient's occupancy.

46.

Sales of alternative fuel, as defined in section 1-215, to a used oil fuel burner who has received a permit to burn used oil or used oil fuel under section 49-426 or 49-480.

47.

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:

(a) Printed or photographic materials, beginning August 7, 1985.

(b) Electronic or digital media materials, beginning July 17, 1994.

48.

Tangible personal property sold to a commercial airline and consisting of food, beverages and condiments and accessories used for serving the food and beverages, if those items are to be provided without additional charge to passengers for consumption in flight.

For the purposes of this paragraph, "commercial airline" means a person holding a federal certificate of public convenience and necessity or foreign air carrier permit for air transportation to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

49.

Sales of alternative fuel vehicles if the 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 section 1-215.

50.

Sales of any spirituous, vinous or malt liquor by a person that is licensed in this state as a wholesaler by the department of liquor licenses and control pursuant to title 4, chapter 2, article 1.

51.

Sales of tangible personal property to be incorporated or installed as part of environmental response or remediation activities under section 42-5075, subsection B, paragraph 6.

52.

Sales of tangible personal property by a nonprofit organization that is exempt from taxation under section 501(c)(6) of the internal revenue code if the organization produces, organizes or promotes cultural or civic related festivals or events and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

53.

Application services that are designed to assess or test student learning or to promote curriculum design or enhancement purchased by or for any school district, charter school, community college or state university.  For the purposes of this paragraph:

(a) "Application services" means software applications provided remotely using hypertext transfer protocol or another network protocol.

(b) "Curriculum design or enhancement" means planning, implementing or reporting on courses of study, lessons, assignments or other learning activities.

54.

Sales of motor vehicle fuel and use fuel to a qualified business under section 41-1516 for off-road use in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41-1516.

55.

Sales of repair parts installed in equipment used directly by a qualified business under section 41-1516 in harvesting, processing or transporting qualifying forest products removed from qualifying projects as defined in section 41-1516.

56.

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.

57.

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.

58.

57.

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.

59.

58.

Sales of tangible personal property incorporated or fabricated into a project described in section 42-5075, subsection O, 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 the Indian tribe.

60.

59.

Sales 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.

61.

60.

Sales of tangible personal property by a marketplace seller that are facilitated by a marketplace facilitator in which the marketplace facilitator has remitted or will remit the applicable tax to the department pursuant to section 42-5014.

B.

In addition to the deductions from the tax base prescribed by subsection A of this section, the gross proceeds of sales or gross income derived from sales of the following categories of tangible personal property shall be deducted from the tax base:

1.

Machinery, or equipment, used directly in manufacturing, processing, fabricating, job printing, refining or metallurgical operations.  The terms "manufacturing", "processing", "fabricating", "job printing", "refining" and "metallurgical" as used in this paragraph refer to and include those operations commonly understood within their ordinary meaning.

"Metallurgical operations" includes leaching, milling, precipitating, smelting and refining.

2.

Mining machinery, or equipment, used directly in the process of extracting ores or minerals from the earth for commercial purposes, including equipment required to prepare the materials for extraction and handling, loading or transporting such extracted material to the surface.  "Mining" includes underground, surface and open pit operations for extracting ores and minerals.

3.

Tangible personal property sold to persons engaged in business classified under the telecommunications classification, including a person representing or working on behalf of such a person in a manner described in section 42-5075, subsection O, and consisting of central office switching equipment, switchboards, private branch exchange equipment, microwave radio equipment and carrier equipment including optical fiber, coaxial cable and other transmission media that are components of carrier systems.

4.

Machinery, equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution.

5.  Neat5. 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.

6.  PipesNeat oranimals, valveshorses, fourasses, inchessheep, inratites, diameterswine or largergoats used or to transportbe oil,used naturalas gas,breeding artificial gas, water or coalproduction slurry,stock, including compressorsales units,of regulators,breedings machineryor andownership equipment,shares fittings,in sealssuch andanimals any other part that is used infor operatingbreeding the pipes or valves.production.

7.  Aircraft,6. navigational and communication instruments and other accessories and related equipment sold to:

(a)  APipes person:or valves four inches in diameter or larger used to transport oil, natural gas, artificial gas, water or coal slurry, including compressor units, regulators, machinery and equipment, fittings, seals and any other part that is used in operating the pipes or valves.

(i)  Holding,7. or exempted by federal law from obtaining, a federal certificate of public convenience and necessity for use as, in conjunction with or becoming part of an aircraft to be used to transport persons for hire in intrastate, interstate or foreign commerce.

(ii)  ThatAircraft, isnavigational certificatedand orcommunication licensedinstruments underand federalother aviationaccessories administrationand regulationsrelated (14equipment Codesold ofto: Federal Regulations part 121 or 135) as a scheduled or unscheduled carrier of persons for hire for use as or in conjunction with or becoming part of an aircraft to be used to transport persons for hire in intrastate, interstate or foreign commerce.

(iii)  Holding(a) aA foreignperson: air carrier permit for air transportation for use as or in conjunction with or becoming a part of aircraft to be used to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

(iv)  Operating(i) anHolding, aircraft to transport persons in any manner for compensation or hire,exempted orby forfederal uselaw infrom obtaining, a fractional ownership program that meets the requirements of federal aviationcertificate administration regulations (14 Code of Federalpublic Regulationsconvenience partand 91,necessity subpartfor K),use includingas, asin anconjunction airwith carrier, a foreign air carrier or abecoming commercialpart operator or under a restricted category, within the meaning of 14an Code of Federal Regulations, regardless of whether the operation or aircraft isto regulatedbe orused certifiedto undertransport partpersons 91,for 119,hire 121,in 133,intrastate, 135,interstate 136 or 137,foreign orcommerce. another part of 14 Code of Federal Regulations.

(v)  That(ii) willThat leaseis certificated or otherwiselicensed transferunder operationalfederal control,aviation withinadministration theregulations meaning(14 Code of federalFederal aviationRegulations administrationpart operations121 specificationor A008,135) as a scheduled or itsunscheduled successor,carrier of thepersons aircraft,for instrumentshire for use as or accessoriesin toconjunction onewith or morebecoming personspart describedof inan itemaircraft (i),to (ii),be (iii)used orto (iv)transport ofpersons thisfor subdivision,hire subjectin tointrastate, sectioninterstate 42‑5009,or subsectionforeign Q.commerce.

(b)  Any(iii) Holding a foreign government.air carrier permit for air transportation for use as or in conjunction with or becoming a part of aircraft to be used to transport persons, property or United States mail in intrastate, interstate or foreign commerce.

(c)  Persons(iv) whoOperating arean notaircraft residentsto oftransport thispersons statein andany whomanner willfor notcompensation useor suchhire, propertyor for use in thisa statefractional otherownership thanprogram inthat removingmeets suchthe propertyrequirements fromof thisfederal state.  Thisaviation subdivisionadministration alsoregulations applies(14 toCode corporationsof thatFederal areRegulations notpart incorporated91, insubpart thisK), state,including regardlessas ofan maintainingair carrier, a placeforeign ofair businesscarrier inor thisa state,commercial ifoperator or under a restricted category, within the principalmeaning corporateof office14 isCode locatedof outsideFederal thisRegulations, stateregardless andof whether the propertyoperation willor notaircraft beis usedregulated inor thiscertified stateunder otherpart than91, in119, removing121, the133, property135, from136 thisor state.137, or another part of 14 Code of Federal Regulations.

8.  Machinery,(v) tools,That equipmentwill andlease relatedor suppliesotherwise usedtransfer oroperational consumedcontrol, directlywithin inthe repairing,meaning remodelingof orfederal maintainingaviation aircraft,administration aircraftoperations enginesspecification A008, or aircraftits componentsuccessor, partsof bythe oraircraft, oninstruments behalfor ofaccessories ato certificatedone or licensedmore carrierpersons ofdescribed personsin item (i), (ii), (iii) or property.(iv) of this subdivision, subject to section 42-5009, subsection Q.

9.  Railroad(b) rollingAny stock,foreign rails,government. ties and signal control equipment used directly to transport persons or property.

10.  Machinery(c) orPersons equipmentwho usedare directlynot toresidents drillof forthis oilstate orand gaswho orwill usednot directlyuse insuch theproperty processin ofthis extractingstate oilother orthan gasin fromremoving thesuch earthproperty forfrom commercialthis purposes.state.

11.  BusesThis orsubdivision otheralso urbanapplies massto transitcorporations vehicles that are usednot directlyincorporated toin transportthis personsstate, orregardless propertyof formaintaining hire or pursuant to a governmentallyplace adoptedof andbusiness controlledin urbanthis massstate, transportationif programthe andprincipal thatcorporate areoffice soldis tolocated busoutside companiesthis holdingstate a federal certificate of convenience and necessitythe orproperty operatedwill bynot anybe city,used townin orthis state other governmentalthan entityin orremoving bythe anyproperty personfrom contractingthis withstate. such governmental entity as part of a governmentally adopted and controlled program to provide urban mass transportation.

12.  Groundwater8. measuring devices required under section 45‑604.

13.  NewMachinery, machinerytools, and equipment consisting of agricultural aircraft, tractors, tractor‑drawn implements, self‑powered implements, machinery and equipmentrelated necessarysupplies forused extractingor milk,consumed anddirectly machineryin andrepairing, equipmentremodeling necessaryor formaintaining coolingaircraft, milkaircraft andengines livestock,or andaircraft dripcomponent irrigationparts linesby notor alreadyon exemptbehalf under paragraph 6 of thisa subsectioncertificated andor thatlicensed arecarrier used for commercial production of agricultural,persons horticultural,or viticulturalproperty. and floricultural crops and products in this state.  For the purposes of this paragraph:

(a)  "New9. machinery and equipment" means machinery and equipment that have never been sold at retail except pursuant to leases or rentals that do not total two years or more.

(b)  "Self‑poweredRailroad implements"rolling includesstock, machineryrails, ties and signal control equipment thatused aredirectly electric‑powered.to transport persons or property.

14.  Machinery10. or equipment used in research and development.  For the purposes of this paragraph, "research and development" means basic and applied research in the sciences and engineering, and designing, developing or testing prototypes, processes or new products, including research and development of computer software that is embedded in or an integral part of the prototype or new product or that is required for machinery or equipment otherwise exempt under this section to function effectively.  Research and development do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in the definition of research and development, or other nontechnological activities or technical services.

15.  TangibleMachinery personalor propertyequipment thatused isdirectly usedto bydrill eitherfor ofoil theor followinggas toor receive,used store,directly convert,in produce,the generate,process decode,of encode,extracting controloil or transmitgas telecommunicationsfrom information:the earth for commercial purposes.

(a)  Any11. direct broadcast satellite television or data transmission service that operates pursuant to 47 Code of Federal Regulations part 25.

(b)  AnyBuses satelliteor televisionother urban mass transit vehicles that are used directly to transport persons or dataproperty transmissionfor facility,hire ifor bothpursuant ofto thea followinggovernmentally conditionsadopted and controlled urban mass transportation program and that are met:sold to bus companies holding a federal certificate of convenience and necessity or operated by any city, town or other governmental entity or by any person contracting with such governmental entity as part of a governmentally adopted and controlled program to provide urban mass transportation.

(i)  Over12. two‑thirds of the transmissions, measured in megabytes, transmitted by the facility during the test period were transmitted to or on behalf of one or more direct broadcast satellite television or data transmission services that operate pursuant to 47 Code of Federal Regulations part 25.

(ii)  OverGroundwater two‑thirdsmeasuring ofdevices therequired transmissions,under measuredsection in45-604. megabytes, transmitted by or on behalf of those direct broadcast television or data transmission services during the test period were transmitted by the facility to or on behalf of those services.  For the purposes of subdivision (b) of this paragraph, "test period" means the three hundred sixty‑five day period beginning on the later of the date on which the tangible personal property is purchased or the date on which the direct broadcast satellite television or data transmission service first transmits information to its customers.

16.  Clean13. rooms that are used for manufacturing, processing, fabrication or research and development, as defined in paragraph 14 of this subsection, of semiconductor products.  For the purposes of this paragraph, "clean room" means all property that comprises or creates an environment where humidity, temperature, particulate matter and contamination are precisely controlled within specified parameters, without regard to whether the property is actually contained within that environment or whether any of the property is affixed to or incorporated into real property.  Clean room:

(a)  IncludesNew themachinery integratedand systems,equipment fixtures,consisting piping,of movableagricultural partitions,aircraft, lightingtractors, tractor-drawn implements, self-powered implements, machinery and allequipment propertynecessary thatfor isextracting milk, and machinery and equipment necessary orfor adaptedcooling tomilk reduceand contaminationlivestock, orand todrip controlirrigation airflow,lines temperature,not humidity,already chemicalexempt purityunder orparagraph other6 environmentalof conditionsthis orsubsection manufacturingand tolerances,that asare wellused asfor thecommercial production machineryof andagricultural, equipmenthorticultural, operatingviticultural inand conjunctionfloricultural withcrops theand cleanproducts roomin environment.this state.

(b)  DoesFor not include the buildingpurposes or other permanent, nonremovable component of thethis buildingparagraph: that houses the clean room environment.

17.  Machinery(a) and"New equipmentmachinery usedand directlyequipment" inmeans themachinery feedingand ofequipment poultry,that thehave environmentalnever controlbeen ofsold environmentallyat controllingretail housingexcept forpursuant poultry,to theleases movement of moving eggs within a production and packaging facility or therentals sortingthat ordo cooling of eggs.  This exemption does not applytotal totwo vehiclesyears usedor formore. transporting eggs.

18.  Machinery(b) or"Self-powered equipment,implements" includingincludes relatedmachinery structural components, that is employed in connection with manufacturing, processing, fabricating, job printing, refining, mining, natural gas pipelines, metallurgical operations, telecommunications, producing or transmitting electricity or research and developmentequipment and that isare usedelectric-powered. directly to meet or exceed rules or regulations adopted by the federal energy regulatory commission, the United States environmental protection agency, the United States nuclear regulatory commission, the Arizona department of environmental quality or a political subdivision of this state to prevent, monitor, control or reduce land, water or air pollution.

19.  Machinery14. and equipment that are sold to a person engaged in the commercial production of commercially producing livestock, livestock products or agricultural, horticultural, viticultural or floricultural crops or products in this state, including a person representing or working on behalf of such a person in a manner described in section 42‑5075, subsection O, if the machinery and equipment are used directly and primarily to prevent, monitor, control or reduce air, water or land pollution.

20.  MachineryMachinery or equipment thatused enablesin aresearch television station to originate and broadcastdevelopment. or to receive and broadcast digital television signals and that was purchased to facilitate compliance with the telecommunications act of 1996 (P.L.

104‑104;For the purposes of this paragraph, "research and development" means basic and applied research in the sciences and engineering, and designing, developing or testing prototypes, processes or new products, including research and development of computer software that is embedded in or an integral part of the prototype or new product or that is required for machinery or equipment otherwise exempt under this section to function effectively.

Research and development do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in the definition of research and development, or other nontechnological activities or technical services.

15.

Tangible personal property that is used by either of the following to receive, store, convert, produce, generate, decode, encode, control or transmit telecommunications information:

(a) Any direct broadcast satellite television or data transmission service that operates pursuant to 47 Code of Federal Regulations part 25.

(b) Any satellite television or data transmission facility, if both of the following conditions are met:

(i) Over two-thirds of the transmissions, measured in megabytes, transmitted by the facility during the test period were transmitted to or on behalf of one or more direct broadcast satellite television or data transmission services that operate pursuant to 47 Code of Federal Regulations part 25.

(ii) Over two-thirds of the transmissions, measured in megabytes, transmitted by or on behalf of those direct broadcast television or data transmission services during the test period were transmitted by the facility to or on behalf of those services.

For the purposes of subdivision (b) of this paragraph, "test period" means the three hundred sixty-five day period beginning on the later of the date on which the tangible personal property is purchased or the date on which the direct broadcast satellite television or data transmission service first transmits information to its customers.

16.

Clean rooms that are used for manufacturing, processing, fabrication or research and development, as defined in paragraph 14 of this subsection, of semiconductor products.

For the purposes of this paragraph, "clean room" means all property that comprises or creates an environment where humidity, temperature, particulate matter and contamination are precisely controlled within specified parameters, without regard to whether the property is actually contained within that environment or whether any of the property is affixed to or incorporated into real property.  Clean room:

(a) Includes the integrated systems, fixtures, piping, movable partitions, lighting and all property that is necessary or adapted to reduce contamination or to control airflow, temperature, humidity, chemical purity or other environmental conditions or manufacturing tolerances, as well as the production machinery and equipment operating in conjunction with the clean room environment.

(b) Does not include the building or other permanent, nonremovable component of the building that houses the clean room environment.

17.

Machinery and equipment used directly in the feeding of poultry, the environmental control of environmentally controlling housing for poultry, the movement of moving eggs within a production and packaging facility or the sorting or cooling of eggs.  This exemption does not apply to vehicles used for transporting eggs.

18.

Machinery or equipment, including related structural components, that is employed in connection with manufacturing, processing, fabricating, job printing, refining, mining, natural gas pipelines, metallurgical operations, telecommunications, producing or transmitting electricity or research and development and that is used directly to meet or exceed rules or regulations adopted by the federal energy regulatory commission, the United States environmental protection agency, the United States nuclear regulatory commission, the Arizona department of environmental quality or a political subdivision of this state to prevent, monitor, control or reduce land, water or air pollution.

19.

Machinery and equipment that are sold to a person engaged in the commercial production of commercially producing livestock, livestock products or agricultural, horticultural, viticultural or floricultural crops or products in this state, including a person representing or working on behalf of such a person in a manner described in section 42-5075, subsection O, if the machinery and equipment are used directly and primarily to prevent, monitor, control or reduce air, water or land pollution.

20.

Machinery or equipment that enables a television station to originate and broadcast or to receive and broadcast digital television signals and that was purchased to facilitate compliance with the telecommunications act of 1996 (P.L.

104-104;

47 United States Code section 336) and the federal communications commission order issued April 21, 1997 (47 Code of Federal Regulations part 73).  This73). paragraph does not exempt any of the following:

(a)  RepairThis orparagraph replacementdoes partsnot purchasedexempt forany of the machineryfollowing: or equipment described in this paragraph.

(b)  Machinery(a) Repair or equipmentreplacement parts purchased tofor replacethe machinery or equipment fordescribed whichin an exemption was previously claimed and taken under this paragraph.

(c)  Any(b) machineryMachinery or equipment purchased afterto thereplace televisionmachinery stationor hasequipment ceasedfor analogwhich broadcasting,an orexemption purchasedwas afterpreviously Novemberclaimed 1,and 2009,taken whicheverunder occursthis first.paragraph.

21.  Qualifying(c) equipmentAny thatmachinery isor equipment purchased from and after Junethe 30,television 2004station throughhas Juneceased 30,analog 2024broadcasting, by a qualified business under section 41‑1516 for harvesting or processingpurchased qualifyingafter forestNovember products1, removed2009, fromwhichever qualifyingoccurs projectsfirst. as defined in section 41‑1516.  To qualify for this deduction, the qualified business at the time of purchase must present its certification approved by the department.

22.  Computer21. 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.

C.  TheQualifying deductionsequipment providedthat is purchased from and after June 30, 2004 through June 30, 2024 by subsectiona Bqualified ofbusiness thisunder section do41-1516 notfor includeharvesting salesor of:processing qualifying forest products removed from qualifying projects as defined in section 41-1516.

1.  ExpendableTo materials.  Forqualify thefor purposes of this paragraph,deduction, expendablethe materialsqualified dobusiness notat include any of the categoriestime of tangiblepurchase personalmust propertypresent specifiedits incertification subsectionapproved Bby of this section regardless of the costdepartment. or useful life of that property.

2.  Janitorial22. equipment and hand tools.

3.  OfficeComputer equipment,data furniturecenter andequipment supplies.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.

4.  TangibleFor personalthe propertypurposes usedof inthis sellingparagraph, or"computer distributingdata activities,center", other"computer thandata thecenter telecommunicationsequipment", transmissions"qualification describedperiod" inand subsection"qualified B,colocation paragraphtenant" 15have ofthe thissame section.meanings prescribed in section 41-1519.

5.  MotorC. vehicles required to be licensed by this state, except buses or other urban mass transit vehicles specifically exempted pursuant to subsection B, paragraph 11 of this section, without regard to the use of such motor vehicles.

6.  Shops,The buildings,deductions docks,provided depotsby andsubsection allB other materials of whateverthis kindsection ordo character not specificallyinclude includedsales asof: exempt.

7.  Motors1. and pumps used in drip irrigation systems.

8.  MachineryExpendable andmaterials. equipment or other tangible personal property used by a contractor in the performance of performing a contract.

D.  InFor addition to the deductionspurposes from the tax base prescribed by subsection A of this section,paragraph, thereexpendable shallmaterials bedo deductednot frominclude theany taxof base the grosscategories proceeds of sales or gross income derived from sales of machinery, equipment, materials and other tangible personal property usedspecified directlyin andsubsection predominantlyB toof constructthis a qualified environmental technology manufacturing, producing or processing facility as described in section 41‑1514.02.  Thisregardless subsectionof appliesthe forcost ten full consecutive calendar or fiscaluseful yearslife after the start of initialthat construction.property.

E.  In2. computing the tax base, gross proceeds of sales or gross income from retail sales of heavy trucks and trailers does not include any amount attributable to federal excise taxes imposed by 26 United States Code section 4051.

F.  IfJanitorial aequipment person is engaged in an occupation or business to which subsection A of this section applies, the person's books shall be kept so as to show separately the gross proceeds of sales of tangible personal property and thehand grosstools. income from sales of services, and if not so kept the tax shall be imposed on the total of the person's gross proceeds of sales of tangible personal property and gross income from services.

G.  If3. a person is engaged in the business of selling tangible personal property at both wholesale and retail, the tax under this section applies only to the gross proceeds of the sales made other than at wholesale if the person's books are kept so as to show separately the gross proceeds of sales of each class, and if the books are not so kept, the tax under this section applies to the gross proceeds of every sale so made.

H.  AOffice personequipment, whofurniture engages in manufacturing, baling, crating, boxing, barreling, canning, bottling, sacking, preserving, processing or otherwise preparing for sale or commercial use any livestock, agricultural or horticultural product or any other product, article, substance or commodity and whosupplies. sells the product of such business at retail in this state is deemed, as to such sales, to be engaged in business classified under the retail classification.  This subsection does not apply to:

1.  Agricultural4. producers who are owners, proprietors or tenants of agricultural lands, orchards, farms or gardens where agricultural products are grown, raised or prepared for market and who are marketing their own agricultural products.

2.  BusinessesTangible classifiedpersonal underproperty the:used in selling or distributing activities, other than the telecommunications transmissions described in subsection B, paragraph 15 of this section.

(a)  Transporting5. classification.

(b)  UtilitiesMotor classification.vehicles required to be licensed by this state, except buses or other urban mass transit vehicles specifically exempted pursuant to subsection B, paragraph 11 of this section, without regard to the use of such motor vehicles.

(c)  Telecommunications6. classification.

(d)  PipelineShops, classification.buildings, docks, depots and all other materials of whatever kind or character not specifically included as exempt.

(e)  Private7. car line classification.

(f)  PublicationMotors classification.and pumps used in drip irrigation systems.

(g)  Job8. printing classification.

(h)  PrimeMachinery contractingand classification.equipment or other tangible personal property used by a contractor in the performance of performing a contract.

(i)  RestaurantD. classification.

I.  TheIn addition to the deductions from the tax base prescribed by subsection A of this section, there shall be deducted from the tax base the gross proceeds of sales or gross income derived from thesales followingof shallmachinery, beequipment, deductedmaterials fromand theother taxtangible basepersonal forproperty theused retaildirectly classification:and predominantly to construct a qualified environmental technology manufacturing, producing or processing facility as described in section 41-1514.02.

1.  SalesThis madesubsection directlyapplies tofor theten Unitedfull Statesconsecutive governmentcalendar or itsfiscal departmentsyears orafter agenciesthe bystart aof manufacturer,initial modifier,construction. assembler or repairer.

2.  SalesE. made directly to a manufacturer, modifier, assembler or repairer if such sales are of any ingredient or component part of products sold directly to the United States government or its departments or agencies by the manufacturer, modifier, assembler or repairer.

3.  OverheadIn materialscomputing or other tangible personal property that is used in performing a contract between the Unitedtax Statesbase, governmentgross andproceeds aof manufacturer,sales modifier, assembler or repairer,gross includingincome propertyfrom usedretail insales performingof aheavy subcontracttrucks withand atrailers governmentdoes contractornot whoinclude isany aamount manufacturer,attributable modifier, assembler or repairer, to whichfederal titleexcise passestaxes toimposed theby government26 underUnited theStates termsCode ofsection the4051. contract or subcontract.

4.  SalesF. of overhead materials or other tangible personal property to a manufacturer, modifier, assembler or repairer if the gross proceeds of sales or gross income derived from the property by the manufacturer, modifier, assembler or repairer will be exempt under paragraph 3 of this subsection.

J.  ThereIf shalla beperson deductedis fromengaged thein taxan baseoccupation fiftyor percentbusiness to which subsection A of this section applies, the person's books shall be kept so as to show separately the gross proceeds orof sales of tangible personal property and the gross income from anysales sale of tangibleservices, personaland propertyif madenot directlyso tokept the Unitedtax Statesshall governmentbe orimposed itson departmentsthe ortotal agenciesof thatthe isperson's notgross deductedproceeds underof subsectionsales I of thistangible section.personal property and gross income from services.

K.  TheG. department shall require every person claiming a deduction provided by subsection I or J of this section to file on forms prescribed by the department at such times as the department directs a sworn statement disclosing the name of the purchaser and the exact amount of sales on which the exclusion or deduction is claimed.

L.  InIf computinga person is engaged in the business of selling tangible personal property at both wholesale and retail, the tax base,under this section applies only to the gross proceeds of the sales ormade other than at wholesale if the person's books are kept so as to show separately the gross incomeproceeds doesof sales of each class, and if the books are not include:so kept, the tax under this section applies to the gross proceeds of every sale so made.

1.  AH. 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.  TheA wasteperson tirewho disposalengages feein imposedmanufacturing, pursuantbaling, crating, boxing, barreling, canning, bottling, sacking, preserving, processing or otherwise preparing for sale or commercial use any livestock, agricultural or horticultural product or any other product, article, substance or commodity and who sells the product of such business at retail in this state is deemed, as to sectionsuch 44‑1302.sales, to be engaged in business classified under the retail classification.

M.  ThereThis shallsubsection bedoes deductednot fromapply theto: tax base the amount received from sales of solar energy devices.  The retailer shall register with the department 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 for examination.

N.  In1. computing the tax base in the case of the sale or transfer of wireless telecommunications equipment as an inducement to a customer to enter into or continue a contract for telecommunications services that are taxable under section 42‑5064, 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.

O.  ForAgricultural theproducers purposeswho ofare thisowners, section,proprietors aor saletenants of wirelessagricultural telecommunicationslands, equipmentorchards, tofarms a person who holds the equipment for sale or transfergardens towhere aagricultural customerproducts asare angrown, inducementraised to enter into or continueprepared a contract for telecommunicationsmarket servicesand thatwho are taxablemarketing undertheir sectionown 42‑5064agricultural isproducts. considered to be a sale for resale in the regular course of business.

P.  Retail2. 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.

Q.  ForBusinesses theclassified purposesunder ofthe: this section, the diversion of gas from a pipeline by a person engaged in the business of:

1.  Operating(a) aTransporting naturalclassification. 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.

2.  Converting(b) naturalUtilities gasclassification. into liquefied natural gas, for the sole purpose of fueling compressor equipment used in the conversion process, is not a sale of gas to the operator of the compressor equipment.

R.  For(c) theTelecommunications purposesclassification. of this section, the transfer of title or possession of coal from an owner or operator of a power plant to a person in the business of refining coal is not a sale of coal if both of the following apply:

1.  The(d) transferPipeline ofclassification. title or possession of the coal is for the purpose of refining the coal.

2.  The(e) titlePrivate orcar possessionline ofclassification. 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 paragraph, "coal refining process" means the application of a coal additive system that aids in the reduction of power plant emissions during the combustion of coal and the treatment of flue gas.

S.  If(f) aPublication sellerclassification. is entitled to a deduction pursuant to subsection B, paragraph 15, subdivision (b) of this section, the department may require the purchaser to establish that the requirements of subsection B, paragraph 15, subdivision (b) of this section have been satisfied.  If the purchaser cannot establish that the requirements of subsection B, paragraph 15, subdivision (b) of this section have been satisfied, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under article 1 of this chapter if the seller had not made a deduction pursuant to subsection B, paragraph 15, subdivision (b) of this section.  Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and related to the tangible personal property purchased.  The amount shall be treated as transaction privilege tax to the purchaser and as tax revenues collected from the seller to designate the distribution base pursuant to section 42‑5029.

T.  For(g) theJob purposesprinting ofclassification. section 42‑5032.01, the department shall separately account for revenues collected under the retail classification from businesses selling tangible personal property at retail:

1.  On(h) thePrime premisescontracting ofclassification. a multipurpose facility that is owned, leased or operated by the tourism and sports authority pursuant to title 5, chapter 8.

2.  At(i) professionalRestaurant footballclassification. contests that are held in a stadium located on the campus of an institution under the jurisdiction of the Arizona board of regents.

U.  InI. computing the tax base for the sale of a motor vehicle to a nonresident of this state, if the purchaser's state of residence allows a corresponding use tax exemption to the tax imposed by article 1 of this chapter and the rate of the tax in the purchaser's state of residence is lower than the rate prescribed in article 1 of this chapter or if the purchaser's state of residence does not impose an excise tax, and the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribed by sections 28‑2154 and 28‑2154.01, there shall be deducted from the tax base a portion of the gross proceeds or gross income from the sale so that the amount of transaction privilege tax that is paid in this state is equal to the excise tax that is imposed by the purchaser's state of residence on the nonexempt sale or use of the motor vehicle.

V.  ForThe thegross purposesproceeds of thissales section:or gross income derived from the following shall be deducted from the tax base for the retail classification:

1.  "Agricultural1. aircraft" means an aircraft that is built for agricultural use for the aerial application of pesticides or fertilizer or for aerial seeding.

2.  "Aircraft"Sales includes:made directly to the United States government or its departments or agencies by a manufacturer, modifier, assembler or repairer.

(a)  An2. airplane flight simulator that is approved by the federal aviation administration for use as a phase II or higher flight simulator under appendix H, 14 Code of Federal Regulations part 121.

(b)  TangibleSales personalmade propertydirectly thatto isa permanentlymanufacturer, affixedmodifier, assembler or attachedrepairer asif asuch sales are of any ingredient or component part of anproducts aircraftsold thatdirectly isto ownedthe orUnited operatedStates bygovernment aor certificatedits departments or licensedagencies carrierby ofthe personsmanufacturer, modifier, assembler or property.repairer.

3.  "Other3. accessories and related equipment" includes aircraft accessories and equipment such as ground service equipment that physically contact aircraft at some point during the overall carrier operation.

4.  "SellingOverhead atmaterials retail"or meansother atangible salepersonal forproperty anythat purposeis otherused than for resale in theperforming regulara coursecontract ofbetween business in the formUnited ofStates tangiblegovernment personaland property,a butmanufacturer, transfermodifier, ofassembler possession,or leaserepairer, andincluding rentalproperty as used in theperforming definitiona ofsubcontract salewith meana onlygovernment suchcontractor transactionswho asis area foundmanufacturer, onmodifier, investigationassembler toor berepairer, into lieuwhich oftitle salespasses asto definedthe withoutgovernment under the wordsterms leaseof the contract or rental.subcontract.

W.  For4. the purposes of subsection I of this section:

1.  "Assembler"Sales meansof overhead materials or other tangible personal property to a personmanufacturer, whomodifier, unitesassembler or combinesrepairer products,if waresthe orgross articlesproceeds of manufacturesales soor asgross toincome producederived afrom changethe inproperty formby orthe substancemanufacturer, withoutmodifier, changingassembler or alteringrepairer thewill componentbe parts.exempt under paragraph 3 of this subsection.

2.  "Manufacturer"J. means a person who is principally engaged in the fabrication, production fabricating, producing or manufacture of manufacturing products, wares or articles for use from raw or prepared materials, imparting to those materials new forms, qualities, properties and combinations.

3.  "Modifier"There meansshall abe persondeducted whofrom reworks,the changestax base fifty percent of the gross proceeds or addsgross income from any sale of tangible personal property made directly to products,the waresUnited States government or articlesits departments or agencies that is not deducted under subsection I of manufacture.this section.

4.  "OverheadK. materials" means tangible personal property, the gross proceeds of sales or gross income derived from that would otherwise be included in the retail classification, and that are used or consumed in the performance of performing a contract, the cost of which is charged to an overhead expense account and allocated to various contracts based on generally accepted accounting principles and consistent with government contract accounting standards.

5.  "Repairer"The meansdepartment ashall require every person whoclaiming restoresa ordeduction renewsprovided products,by waressubsection I or articlesJ of manufacture.this section to file on forms prescribed by the department at such times as the department directs a sworn statement disclosing the name of the purchaser and the exact amount of sales on which the exclusion or deduction is claimed.

6.  "Subcontract"L. means an agreement between a contractor and any person who is not an employee of the contractor for furnishing of supplies or services that, in whole or in part, are necessary to the performance of perform one or more government contracts, or under which any portion of the contractor's obligation under one or more government contracts is performed, undertaken or assumed and that includes provisions causing title to overhead materials or other tangible personal property used in the performance of performing the subcontract to pass to the government or that includes provisions incorporating such title passing clauses in a government contract into the subcontract.

END_STATUTEIn Sec. 3.  Sectioncomputing 42-5061,the Arizonatax Revisedbase, Statutes,gross asproceeds amendedof bysales Lawsor 2019,gross chapterincome 273,does sectionnot 8include: and chapter 288 section 2, is amended to read:

START_STATUTE42-5061.  Retail1. classification;

definitionsA A.  Themanufacturer's retailcash classificationrebate ison comprised of the businesssales price of sellinga tangiblemotor personalvehicle propertyif at retail.  The tax base for the retailbuyer classificationassigns is the grossbuyer's proceedsright ofin sales or gross income derived from the business. rebate The tax imposed on the retail classification does not apply to the grossretailer. proceeds of sales or gross income from:

1.  Professional2. or personal service occupations or businesses that involve sales or transfers of tangible personal property only as inconsequential elements.

2.  ServicesThe renderedwaste intire additiondisposal tofee sellingimposed tangiblepursuant personalto propertysection at44-1302. retail.

3.  SalesM. of warranty or service contracts.  The storage, use or consumption of tangible personal property provided under the conditions of such contracts is subject to tax under section 42‑5156.

4.  SalesThere ofshall tangiblebe personaldeducted propertyfrom bythe anytax nonprofitbase organization organized and operated exclusively for charitable purposes and recognized by the Unitedamount Statesreceived internalfrom revenuesales service under section 501(c)(3) of thesolar internalenergy revenuedevices. code.

5.  SalesThe toretailer personsshall engagedregister inwith business classified under the restaurantdepartment classificationas ofa articlessolar usedenergy byretailer. human beings for food, drink or condiment, whether simple, mixed or compounded.

6.  BusinessBy activityregistering, the retailer acknowledges that isit properlywill includedmake inits anybooks otherand businessrecords classificationrelating thatto issales taxableof undersolar thisenergy article.devices available to the department for examination.

7.  TheN. sale of stocks and bonds.

8.  DrugsIn andcomputing medicalthe oxygen,tax includingbase deliveryin hose,the maskcase of the sale or tent,transfer regulatorof andwireless tank,telecommunications onequipment theas prescriptionan ofinducement ifto prescribeda bycustomer to enter into or continue a membercontract offor thetelecommunications medical,services dentalthat are taxable under section 42-5064, gross proceeds of sales or veterinariangross professionincome whodoes isnot licensedinclude any sales commissions or other compensation received by lawthe toretailer administeras sucha substances.result of the customer entering into or continuing a contract for the telecommunications services.

9.  ProstheticO. appliances as defined in section 23‑501 and as prescribed or recommended by a health professional who is licensed pursuant to title 32, chapter 7, 8, 11, 13, 14, 15, 16, 17 or 29.

10.  Insulin,For insulinthe syringespurposes andof glucosethis testsection, strips.a sale of wireless telecommunications 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 telecommunications services that are taxable under section 42-5064 is considered to be a sale for resale in the regular course of business.

11.  PrescriptionP. eyeglasses or contact lenses.

12.  HearingRetail aidssales asof definedprepaid incalling sectioncards 36‑1901.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.

13.  DurableQ. medical equipment that has a centers for medicare and medicaid services common procedure code, is designated reimbursable by medicare, is prescribed by a person who is licensed under title 32, chapter 7, 8, 13, 14, 15, 17 or 29, 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.

14.  SalesFor ofthe motorpurposes vehicles to nonresidents of this statesection, for use outside this state if the motordiversion vehicleof dealergas shipsfrom ora deliverspipeline theby motor vehicle to a destinationperson outengaged ofin thisthe state.business of:

15.  Food,1. as provided in and subject to the conditions of article 3 of this chapter and sections 42‑5074 and 42‑6017.

16.  ItemsOperating purchaseda withnatural Unitedor Statesartificial departmentgas pipeline, for the sole purpose of agriculturefueling couponscompressor issuedequipment underto pressurize the supplementalpipeline, nutritionis assistancenot programa pursuantsale toof the foodgas andto nutritionthe actoperator of 2008the (P.L.pipeline.

2.

Converting natural gas into liquefied natural gas, for the sole purpose of fueling compressor equipment used in the conversion process, is not a sale of gas to the operator of the compressor equipment.

R.

For the purposes of this section, the transfer of title or possession of coal from an owner or operator of a power plant to a person in the business of refining coal is not a sale of coal if both of the following apply:

1.

The transfer of title or possession of the coal is for the purpose of refining the coal.

2.

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 paragraph, "coal refining process" means the application of a coal additive system that aids in the reduction of power plant emissions during the combustion of coal and the treatment of flue gas.

S.

If a seller is entitled to a deduction pursuant to subsection B, paragraph 15, subdivision (b) of this section, the department may require the purchaser to establish that the requirements of subsection B, paragraph 15, subdivision (b) of this section have been satisfied.

If the purchaser cannot establish that the requirements of subsection B, paragraph 15, subdivision (b) of this section have been satisfied, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under article 1 of this chapter if the seller had not made a deduction pursuant to subsection B, paragraph 15, subdivision (b) of this section.

Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and related to the tangible personal property purchased.

The amount shall be treated as transaction privilege tax to the purchaser and as tax revenues collected from the seller to designate the distribution base pursuant to section 42-5029.

T.

For the purposes of section 42-5032.01, the department shall separately account for revenues collected under the retail classification from businesses selling tangible personal property at retail:

1.

On the premises of a multipurpose facility that is owned, leased or operated by the tourism and sports authority pursuant to title 5, chapter 8.

2.

At professional football contests that are held in a stadium located on the campus of an institution under the jurisdiction of the Arizona board of regents.

U.

In computing the tax base for the sale of a motor vehicle to a nonresident of this state, if the purchaser's state of residence allows a corresponding use tax exemption to the tax imposed by article 1 of this chapter and the rate of the tax in the purchaser's state of residence is lower than the rate prescribed in article 1 of this chapter or if the purchaser's state of residence does not impose an excise tax, and the nonresident has secured a special ninety day nonresident registration permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01, there shall be deducted from the tax base a portion of the gross proceeds or gross income from the sale so that the amount of transaction privilege tax that is paid in this state is equal to the excise tax that is imposed by the purchaser's state of residence on the nonexempt sale or use of the motor vehicle.

V.

For the purposes of this section:

1.

"Agricultural aircraft" means an aircraft that is built for agricultural use for the aerial application of pesticides or fertilizer or for aerial seeding.

2.

"Aircraft" includes:

(a) An airplane flight simulator that is approved by the federal aviation administration for use as a phase II or higher flight simulator under appendix H, 14 Code of Federal Regulations part 121.

(b) Tangible personal property that is permanently affixed or attached as a component part of an aircraft that is owned or operated by a certificated or licensed carrier of persons or property.

3.

"Other accessories and related equipment" includes aircraft accessories and equipment such as ground service equipment that physically contact aircraft at some point during the overall carrier operation.

4.

"Selling at retail" means a sale for any purpose other than for resale in the regular course of business in the form of tangible personal property, but transfer of possession, lease and rental as used in the definition of sale mean only such transactions as are found on investigation to be in lieu of sales as defined without the words lease or rental.

W.

For the purposes of subsection I of this section:

1.

"Assembler" means a person who unites or combines products, wares or articles of manufacture so as to produce a change in form or substance without changing or altering the component parts.

2.

"Manufacturer" means a person who is principally engaged in the fabrication, production fabricating, producing or manufacture of manufacturing products, wares or articles for use from raw or prepared materials, imparting to those materials new forms, qualities, properties and combinations.

3.

"Modifier" means a person who reworks, changes or adds to products, wares or articles of manufacture.

4.

"Overhead materials" means tangible personal property, the gross proceeds of sales or gross income derived from that would otherwise be included in the retail classification, and that are used or consumed in the performance of performing a contract, the cost of which is charged to an overhead expense account and allocated to various contracts based on generally accepted accounting principles and consistent with government contract accounting standards.

5.

"Repairer" means a person who restores or renews products, wares or articles of manufacture.

6.

"Subcontract" means an agreement between a contractor and any person who is not an employee of the contractor for furnishing of supplies or services that, in whole or in part, are necessary to the performance of perform one or more government contracts, or under which any portion of the contractor's obligation under one or more government contracts is performed, undertaken or assumed and that includes provisions causing title to overhead materials or other tangible personal property used in the performance of performing the subcontract to pass to the government or that includes provisions incorporating such title passing clauses in a government contract into the subcontract.