SB 1116 — tax credit; foster care organizations

The notice to owners is mailed by first class mail at least twenty days in advance of BEFORE the required public hearing.

5.

A notice of the public hearing is published in a local newspaper of general circulation and posted on any official county website not less than two weeks before the required public hearing.

B.

A county shall not adopt a residential rental licensing requirement for residential rental properties or property owners.

This subsection does not prohibit a county that imposes a sales tax on rent from requiring a transaction privilege tax license for residential rental property owners.

Subsections A countyand shallB notof adoptthis asection residentialprovide rentalseparate registrationcredits requirement.against taxes imposed by this title depending on the recipients of the contributions.

A countytaxpayer, shallincluding obtaina rentalmarried registrationcouple informationfiling onlya fromjoint return, in the countysame assessor'staxable officeyear, Sec.may either or both:

3.

Section 33-1314, Arizona Revised Statutes, is amended to read:

33-1314.

Terms and conditions of rental agreement;

contact information;

property;

pets A.

The landlord and tenant may include in a rental agreement terms and conditions not prohibited by this chapter or any other rule of law, including rent, term of the agreement and other provisions governing the rights and obligations of the parties.

B.

In the absence of a rental agreement, the tenant shall pay as rent the fair rental value for the use USING and occupancy of OCCUPYING the dwelling unit.

C.

Rent shall be payable without demand or notice at the time and place agreed on by the parties.

Unless otherwise agreed, rent is payable at the dwelling unit and periodic rent is payable at the beginning of any term of one month or less and otherwise in equal monthly installments at the beginning of each month.

Unless otherwise agreed, rent shall be uniformly apportionable from day-to-day.

D.

Unless the rental agreement fixes a definite term, the tenancy shall be week-to-week in case of a roomer who pays weekly rent, and in all other cases month-to-month.

E.

If a municipality that levies a transaction privilege tax on residential rent changes the percentage of that tax, the landlord on thirty days' written notice to the tenant may adjust the amount of rent due to equal the difference caused by the new percentage amount of the tax.

The adjustment to rent shall not occur before the date on which the new tax is effective.

In order for a landlord to adjust rent pursuant to this subsection, the landlord's right to adjust rent pursuant to this subsection shall be disclosed in the rental agreement.

F.

E.

Notwithstanding section 14-3911, the landlord may request and the tenant may provide and routinely update the name and contact - 2 - S.B.

1116 information of a person who is authorized by the tenant to enter the tenant's dwelling unit to retrieve and store the tenant's property, including the tenant's animal, if the tenant dies or is otherwise incapacitated.

If the landlord is unable to contact the authorized person at the address and telephone number provided to the landlord by the tenant or the authorized person fails to respond to the landlord's request within one day for the animal or ten days for all other property after initial written contact, the landlord may dispose of the property as prescribed in section 33-1370 or may deem the animal abandoned, and if deemed abandoned, shall remove AND RELEASE the animal to an animal shelter or boarding facility as prescribed in section 33-1370, subsection E.

The landlord may release the animal to a relative of the deceased or incapacitated tenant if any of the following applies:

TheContribute landlordto wasa notqualifying providedcharitable theorganization, contactother informationthan of a personqualifying whofoster iscare authorizedcharitable byorganization, theand tenantclaim toa retrievecredit theunder tenant'ssubsection animal.A of this section.

TheContribute contactto informationa isqualifying nofoster longercare valid.charitable organization and claim a credit under subsection B of this section.

3.

The landlord is unable to contact the authorized person after one calendar day.

G.

F.

Before removing any of the tenant's personal property or the tenant's animal, the authorized person shall present to the landlord a valid government issued identification that confirms the identity of the authorized person.

The authorized person shall have twenty days after the date of initial written contact by the landlord or the last date for which rent is paid, whichever is longer, to remove items from the rental property and return keys to the landlord during regular business hours.

If the landlord allows an authorized person to enter the property to remove the tenant's personal possessions as prescribed by this subsection, the landlord has no further liability to the tenant, the tenant's estate or the tenant's heirs for lost, damaged or stolen items.

If the tenant's personal property is not entirely removed from the rental unit by an authorized person, the landlord may dispose of the property as prescribed in section 33-1370.

H.

G.

Subsections F E and G F of this section apply only as follows:

1.

To the tenant's personal property if the periodic rent is unpaid and outstanding for at least five days.

2.

To the tenant's animal if the tenant is deceased or is otherwise incapacitated.

Sec.

4.

Section 42-6004, Arizona Revised Statutes, as amended by Laws 2021, chapter 417, section 10, is amended to read:

42-6004.

Exemption from municipal tax;

definitions A.

A city, town or special taxing district shall not levy a transaction privilege, sales, use or other similar tax on:

1.

Exhibition events in this state sponsored, conducted or operated by a nonprofit organization that is exempt from taxation under section - 3 - S.B.

1116 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if the organization is associated with a major league baseball team or a national touring professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.

This paragraph does not apply to an organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from state transaction privilege tax under section 42-5073.

2.

Interstate telecommunications services, which include that portion of telecommunications services, such as subscriber line service, allocable by federal law to interstate telecommunications service.

3.

Sales of warranty or service contracts.

4.

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

5.

Interest on finance contracts.

6.

Dealer documentation fees on the sales of motor vehicles.

7.

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

8.

Sales of internet access services to the person's subscribers and customers.

For the purposes of this paragraph:

(a) "Internet" means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio.

(b) "Internet access" means a service that enables users to access content, information, electronic mail or other services over the internet.

Internet access does not include telecommunication services provided by a common carrier.

9.

The gross proceeds of sales or gross income retained by the Arizona exposition and state fair board from ride ticket sales at the annual Arizona state fair.

10.

Leasing real property between affiliated companies, businesses, persons or reciprocal insurers.

For the purposes of this paragraph:

(a) "Affiliated companies, businesses, persons or reciprocal insurers" means the lessor holds a controlling interest in the lessee, the lessee holds a controlling interest in the lessor, affiliated persons hold a controlling interest in both the lessor and the lessee, or an unrelated person holds a controlling interest in both the lessor and lessee.

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1116 (b) "Affiliated persons" means members of the individual's family or persons who have ownership or control of a business entity.

(c) "Controlling interest" means direct or indirect ownership of at least eighty percent of the voting shares of a corporation or of the interests in a company, business or person other than a corporation.

(d) "Members of the individual's family" means the individual's spouse and brothers and sisters, whether by whole or half blood, including adopted persons, ancestors and lineal descendants.

(e) "Reciprocal insurer" has the same meaning prescribed in section 20-762.

11.

The gross proceeds of sales or gross income derived from a contract for the installation, assembly, repair or maintenance of machinery, equipment or other tangible personal property that is described in section 42-5061, subsection B and that has independent functional utility, pursuant to the following provisions:

(a) The deduction provided in this paragraph includes the gross proceeds of sales or gross income derived from all of the following:

(i) Any activity performed on machinery, equipment or other tangible personal property with independent functional utility.

(ii) Any activity performed on any tangible personal property relating to machinery, equipment or other tangible personal property with independent functional utility in furtherance of any of the purposes provided for under subdivision (d) of this paragraph.

(iii) Any activity that is related to the activities described in items (i) and (ii) of this subdivision, including inspecting the installation of or testing the machinery, equipment or other tangible personal property.

(b) The deduction provided in this paragraph does not include gross proceeds of sales or gross income from the portion of any contracting activity that consists of the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property described in section 42-5061, subsection B.

(c) The deduction provided in this paragraph shall be determined without regard to the size or useful life of the machinery, equipment or other tangible personal property.

(d) For the purposes of this paragraph, "independent functional utility" means that the machinery, equipment or other tangible personal property can independently perform its function without attachment to real property, other than attachment for any of the following purposes:

(i) Assembling the machinery, equipment or other tangible personal property.

(ii) Connecting items of machinery, equipment or other tangible personal property to each other.

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1116 (iii) Connecting the machinery, equipment or other tangible personal property, whether as an individual item or as a system of items, to water, power, gas, communication or other services.

(iv) Stabilizing or protecting the machinery, equipment or other tangible personal property during operation by bolting, burying or performing other dissimilar nonpermanent connections to either real property or real property improvements.

12.

The leasing or renting of certified ignition interlock devices installed pursuant to the requirements prescribed by section 28-1461.

For the purposes of this paragraph, "certified ignition interlock device" has the same meaning prescribed in section 28-1301.

13.

Computer data center equipment sold to the owner, operator or qualified colocation tenant of a computer data center that is certified by the Arizona commerce authority under section 41-1519 or an authorized agent of the owner, operator or qualified colocation tenant during the qualification period for use in the qualified computer data center.

For the purposes of this paragraph, "computer data center", "computer data center equipment", "qualification period" and "qualified colocation tenant" have the same meanings prescribed in section 41-1519.

14.

The gross proceeds of sales or gross income derived from a contract with the owner of real property or improvements to real property for the maintenance, repair, replacement or alteration of existing property, except as specified in this paragraph.

The gross proceeds of sales or gross income derived from a de minimis amount of modification activity does not subject the contract or any part of the contract to tax.

For the purposes of this paragraph:

(a) Each contract is independent of another contract, except that any change order that directly relates to the scope of work of the original contract shall be treated the same as the original contract under this paragraph, regardless of the amount of modification activities included in the change order.

If a change order does not directly relate to the scope of work of the original contract, the change order shall be treated as a new contract, with the tax treatment of any subsequent change order to follow the tax treatment of the contract to which the scope of work of the subsequent change order directly relates.

(b) Any term not defined in this paragraph that is defined in section 42-5075 has the same meaning prescribed in section 42-5075.

(c) This paragraph does not apply to a contract that primarily involves surface or subsurface improvements to land and that is subject to title 28, chapter 19, 20 or 22 or title 34, chapter 2 or 6 even if the contract also includes vertical improvements.

If a city or town imposes a tax on contracts that are subject to procurement processes under those provisions, the city or town shall include in the request for proposals a notice to bidders when those projects are subject to the tax.

This subdivision does not apply to contracts with:

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1116 (i) Community facilities districts, fire districts, county television improvement districts, community park maintenance districts, cotton pest control districts, hospital districts, pest abatement districts, health service districts, agricultural improvement districts, county free library districts, county jail districts, county stadium districts, special health care districts, public health services districts, theme park districts or revitalization districts.

(ii) Any special taxing district not specified in item (i) of this subdivision if the district does not substantially engage in the modification, maintenance, repair, replacement or alteration of surface or subsurface improvements to land.

15.

Monitoring services relating to an alarm system as defined in section 32-101.

16.

Tangible personal property, job printing or publications sold to or purchased by, or tangible personal property leased, rented or licensed for use to or by, a qualifying health sciences educational institution as defined in section 42-5001.

17.

The transfer of title or possession of coal back and forth between an owner or operator of a power plant and a person who is responsible for refining coal if both of the following apply:

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

(b) The title or possession of the coal is transferred back to the owner or operator of the power plant after completion of the coal refining process.

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

18.

Tangible personal property incorporated or fabricated into a project described in paragraph 14 of this subsection, that is located within the exterior boundaries of an Indian reservation for which the owner, as defined in section 42-5075, of the project is an Indian tribe or an affiliated Indian.

For the purposes of this paragraph:

(a) "Affiliated Indian" means an individual Native American Indian who is duly registered on the tribal rolls of the Indian tribe for whose benefit the Indian reservation was established.

(b) "Indian reservation" means all lands that are within the limits of areas set aside by the United States for the exclusive use and occupancy of an Indian tribe by treaty, law or executive order and that are recognized as Indian reservations by the United States department of the interior.

(c) "Indian tribe" means any organized nation, tribe, band or community that is recognized as an Indian tribe by the United States department of the interior and includes any entity formed under the laws of that Indian tribe.

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1116 19.

The charges for the leasing or renting of space to make attachments to utility poles as follows:

(a) By a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator.

(b) To a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator.

20.

Until March 1, 2017, the gross proceeds of sales or gross income derived from entry fees paid by participants for events that consist of a run, walk, swim or bicycle ride or a similar event, or any combination of these events.

21.

The gross proceeds of sales or gross income derived from entry fees paid by participants for events that are operated or conducted by nonprofit organizations that are exempt from taxation under section 501(c)(3) of the internal revenue code and of which no part of the organization's net earnings inures to the benefit of any private shareholder or individual, if the event consists of a run, walk, swim or bicycle ride or a similar event, or any combination of these events.

22.

The gross proceeds of sales or gross income derived from sales of machinery and equipment used directly for energy storage for later electrical use.

For the purposes of this paragraph:

(a) "Electric utility scale" means a person that is engaged in a business activity described in section 42-5063, subsection A or such person's equipment or wholesale electricity suppliers.

(b) "Energy storage" means commercially available technology for electric utility scale that is capable of absorbing energy, storing energy for a period of time and thereafter dispatching the energy and that uses mechanical, chemical or thermal processes to store energy.

(c) "Machinery and equipment used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released.

B.

A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on natural gas or liquefied petroleum gas used to propel a motor vehicle.

C.

A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from any of the following:

1.

A motor carrier's use on the public highways in this state if the motor carrier is subject to a fee prescribed in title 28, chapter 16, article 4.

- 8 - S.B.

1116 2.

Leasing, renting or licensing a motor vehicle subject to and on which the fee has been paid under title 28, chapter 16, article 4.

3.

The sale of a motor vehicle and any repair and replacement parts and tangible personal property becoming a part of such motor vehicle to a motor carrier who is subject to a fee prescribed in title 28, chapter 16, article 4 and who is engaged in the business of leasing, renting or licensing such property.

4.

Incarcerating or detaining in a privately operated prison, jail or detention facility prisoners who are under the jurisdiction of the United States, this state or any other state or a political subdivision of this state or of any other state.

5.

Transporting for hire persons, freight or property by light motor vehicles subject to a fee under title 28, chapter 15, article 4.

6.

Any amount attributable to development fees that are incurred in relation to the construction, development or improvement of real property and paid by the taxpayer as defined in the model city tax code or by a contractor providing services to the taxpayer.

For the purposes of this paragraph:

(a) The attributable amount shall not exceed the value of the development fees actually imposed.

(b) The attributable amount is equal to the total amount of development fees paid by the taxpayer or by a contractor providing services to the taxpayer and the total development fees credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development.

The real property must be the subject of the development fees.

(c) "Development fees" means fees imposed to offset capital costs of providing public infrastructure, public safety or other public services to a development and authorized pursuant to section 9-463.05, section 11-1102 or title 48 regardless of the jurisdiction to which the fees are paid.

7.

Any amount attributable to fees collected by transportation network companies issued a permit pursuant to section 28-9552.

8.

Transporting for hire persons by transportation network company drivers on transactions involving transportation network services as defined in section 28-9551.

9.

Transporting for hire persons by vehicle for hire companies that are issued permits pursuant to section 28-9503.

10.

Transporting for hire persons by vehicle for hire drivers on transactions involving vehicle for hire services as defined in section 28-9501.

A city,husband townand orwife otherwho taxingfile jurisdictionseparate shallreturns notfor levy a transactiontaxable privilege,year sales,in use,which franchisethey orcould otherhave similarfiled taxa orjoint fee,return howevermay denominated,each inclaim excessonly one-half of one-tenththe oftax onecredit percentthat ofwould thehave valuebeen ofallowed -for 9a -joint S.B.return.

1116 the entire product mined, smelted, extracted, refined, produced or prepared for sale, profit or commercial use, on persons engaged in the business of mineral processing, except to the extent that the tax is computed on the gross proceeds or gross income from sales at retail.

InFor computing the taxpurposes base,of anythis city,section, towna orcontribution otherfor taxingwhich jurisdictiona shallcredit notis includeclaimed inand that is made on or before the grossfifteenth proceedsday of salesthe fourth month following the close of the taxable year may be applied to either the current or grosspreceding income:taxable year and is considered to have been made on the last day of that taxable year.

1.- 1 - S.B.

A1116 manufacturer'sF. 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.If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry forward the amount of the claim not used to offset the taxes under this title for not more than five consecutive taxable years' income tax liability.

The waste tire disposal fee imposed pursuant to section 44-1302.

F.

A city or town shall not levy a use tax on the storage, use or consumption of tangible personal property in the city or town by a school district or charter school.

AThe city,credit townallowed orby taxingthis jurisdictionsection shallis notin levylieu of a transactiondeduction privilege,pursuant sales,to grosssection receipts,170 use,of franchisethe orinternal otherrevenue similarcode taxand ortaken fee,for howeverstate denominated,tax onpurposes. gross proceeds of sales or gross income derived from over-the-top services.

For the purposes of this subsection, "over-the-top services" means audio or video programming services that are received by the purchaser by means of an internet connection, regardless of the technology used, that include linear or live programming and that are generally considered comparable to programming provided by a radio or television broadcast station and includes related on-demand programming that is provided at no additional charge, regardless of whether the services are provided independently or packaged with other audio or video programming.

AFOR CITY,TAXABLE TOWNYEARS ORBEGINNING OTHERFROM TAXINGAND JURISDICTIONAFTER MAYDECEMBER NOT31, LEVY2022, ATHE TRANSACTIONDEPARTMENT PRIVILEGE,SHALL SALES,ADJUST GROSSTHE RECEIPTS,DOLLAR USE,AMOUNTS FRANCHISEPRESCRIBED ORBY OTHERSUBSECTION SIMILARA, TAXPARAGRAPHS OR1 FEE,AND HOWEVER2 DENOMINATED,OF ONTHIS SECTION AND SUBSECTION B, PARAGRAPHS 1 AND 2 OF THIS SECTION ACCORDING TO THE BUSINESSAVERAGE ANNUAL CHANGE IN THE METROPOLITAN PHOENIX CONSUMER PRICE INDEX PUBLISHED BY THE UNITED STATES DEPARTMENT OF RENTINGLABOR, ORBUREAU LEASINGOF REALLABOR PROPERTYSTATISTICS, FOREXCEPT RESIDENTIALTHAT PURPOSES.THE DOLLAR AMOUNTS MAY NOT BE REVISED BELOW THE AMOUNTS ALLOWED IN THE PRIOR TAXABLE YEAR.

THISTHE SUBSECTION:REVISED DOLLAR AMOUNTS SHALL BE RAISED TO THE NEAREST WHOLE DOLLAR.

1.

DOES NOT APPLY TO HEALTH CARE FACILITIES, LONG-TERM CARE FACILITIES OR HOTEL, MOTEL OR OTHER TRANSIENT LODGING BUSINESSES.

2.

APPLIES REGARDLESS OF WHETHER THE CITY OR TOWN HAS ADOPTED THE MODEL CITY TAX CODE PURSUANT TO ARTICLE 2 OF THIS CHAPTER.

ForTaxpayers taking a credit authorized by this section shall provide the purposesname of thisthe section:qualifying charitable organization and the amount of the contribution to the department of revenue on forms provided by the department.

I.

J.

A qualifying charitable organization shall provide the department of revenue with a written certification that it meets all criteria to be considered a qualifying charitable organization.

The organization shall also notify the department of any changes that may affect the qualifications under this section.

J.

K.

The charitable organization's written certification must be signed by an officer of the organization under penalty of perjury.

The written certification must include the following:

"CableVerification operator"of hasthe organization's status under section 501(c)(3) of the sameinternal meaningrevenue prescribedcode inor sectionverification 9-505that andthe includesorganization is a videodesignated servicecommunity provider.action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901.

"ElectricalFinancial services"data meansindicating transmittingthe ororganization's distributingbudget electricity,for electricthe lights,organization's currentprior oroperating poweryear overand lines,the wiresamount orof cables.that budget spent on services to residents of this state who either:

(a) Receive temporary assistance for needy families benefits.

(b) Are low-income residents.

(c) Are individuals who have a chronic illness or physical disability.

"TelecommunicationA services"statement meansthat transmittingthe ororganization relayingplans sound,to visualcontinue image,spending data,at information,least imagesfifty orpercent materialof overits lines,budget wireson orservices cablesto byresidents radioof signal,this lightstate beam,who telephone,receive telegraphtemporary assistance for needy families benefits, who are low-income residents or otherwho electromagneticare means.individuals who have a chronic illness or physical disability.

- 102 - S.B.

"UtilityA pole"statement meansthat anythe wooden,organization metaldoes ornot otherprovide, polepay used for utilityor purposesprovide coverage of abortions and thedoes pole'snot appurtenancesfinancially thatsupport areany attachedother orentity authorizedthat forprovides, attachmentpays byfor theor personprovides controllingcoverage theof pole.abortions.

Sec.K.

5.L.

SectionThe 42-6004,department Arizonashall Revisedreview Statutes,each aswritten amendedcertification byand Lawsdetermine 2021,whether chapterthe 417,organization sectionmeets 11,all isthe amendedcriteria to read:be considered a qualifying charitable organization and notify the organization of its determination.

42-6004.The department may also periodically request recertification from the organization.

ExemptionThe fromdepartment municipalshall tax;compile and make available to the public a list of the qualifying charitable organizations.

definitionsL. A.

AM. city, town or special taxing district shall not levy a transaction privilege, sales, use or other similar tax on:

For the purposes of this section:

Exhibition"Individuals eventswho inhave this state sponsored, conducted or operated by a nonprofitchronic organizationillness that is exempt from taxation under section 501(c)(3), 501(c)(4) or 501(c)(6)physical ofdisability" themeans internalindividuals revenuewhose codeprimary ifdiagnosis the organization is associated with a majorsevere leaguephysical baseballcondition teamthat ormay arequire nationalongoing touringmedical professional golfing association and no part of the organization's net earnings inures to the benefit of any private shareholder or individual.surgical intervention.

This paragraph does not apply to an organization that is owned, managed or controlled, in whole or in part, by a major league baseball team, or its owners, officers, employees or agents, or by a major league baseball association or professional golfing association, or its owners, officers, employees or agents, unless the organization conducted or operated exhibition events in this state before January 1, 2018 that were exempt from state transaction privilege tax under section 42-5073.

Interstate"Low-income telecommunicationsresidents" services,means whichpersons includewhose thathousehold portionincome ofis telecommunicationsless services,than suchone ashundred subscriberfifty linepercent service,of allocablethe by federal lawpoverty tolevel. interstate telecommunications service.

Sales"Qualifying charitable organization" means a charitable organization that is exempt from federal income taxation under section 501(c)(3) of warrantythe internal revenue code or serviceis contracts.a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901.

The organization must spend at least fifty percent of its budget on services to residents of this state who receive temporary assistance for needy families benefits, to low-income residents of this state and their households or to individuals who have a chronic illness or physical disability and who are residents of this state.

Taxpayers choosing to make donations through an umbrella charitable organization that collects donations on behalf of member charities shall designate that the donation be directed to a member charitable organization that would qualify under this section on a stand-alone basis.

Qualifying charitable organization does not include any entity that provides, pays for or provides coverage of abortions or that financially supports any other entity that provides, pays for or provides coverage of abortions.

Sales"Qualifying offoster motorcare vehiclescharitable toorganization" nonresidentsmeans ofa thisqualifying statecharitable fororganization usethat outsideeach thisoperating stateyear ifDOES theALL motorOF vehicleTHE dealerFOLLOWING: ships or delivers the motor vehicle to a destination outside this state.

(a) Provides services to at least two hundred qualified individuals in this state.

and (b) Spends at least fifty percent of its budget on services to qualified individuals in this state.

For the purposes of this paragraph, 5.

"Qualified individual" means ANY OF THE FOLLOWING:

(a) A foster child as defined in section 8-501.

or (b) A PERSON WHO IS PARTICIPATING IN AN INDEPENDENT LIVING PROGRAM AS PRESCRIBED BY SECTION 8-521.

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1116 (c) A person who is under twenty-one years of age and who is participating in a transitional independent living program as prescribed by section 8-521.01.

(d) A PERSON WHO IS PARTICIPATING IN AN EXTENDED FOSTER CARE PROGRAM AS PRESCRIBED BY SECTION 8-521.02.

(e) A PERSON WHO IS UNDER TWENTY-SEVEN YEARS OF AGE AND WHOSE REASON FOR LEAVING FOSTER CARE IS ANY OF THE FOLLOWING:

(i) REACHING EIGHTEEN YEARS OF AGE.

(ii) ADOPTION OR LEGAL GUARDIANSHIP AFTER REACHING SIXTEEN YEARS OF AGE.

(iii) REUNIFICATION AT FOURTEEN YEARS OF AGE OR FIFTEEN YEARS OF AGE.

Interest on finance contracts.

Dealer"Services" documentationmeans feescash onassistance, themedical salescare, ofchild motorcare, vehicles.food, clothing, shelter, job placement and job training services or any other assistance that is reasonably necessary to meet immediate basic needs and that is provided and used in this state.

7.

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

8.

Sales of internet access services to the person's subscribers and customers.

For the purposes of this paragraph:

(a) "Internet" means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio.

(b) "Internet access" means a service that enables users to access content, information, electronic mail or other services over the internet.

Internet access does not include telecommunication services provided by a common carrier.

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1116 9.

The gross proceeds of sales or gross income retained by the Arizona exposition and state fair board from ride ticket sales at the annual Arizona state fair.

10.

Leasing real property between affiliated companies, businesses, persons or reciprocal insurers.

For the purposes of this paragraph:

(a) "Affiliated companies, businesses, persons or reciprocal insurers" means the lessor holds a controlling interest in the lessee, the lessee holds a controlling interest in the lessor, affiliated persons hold a controlling interest in both the lessor and the lessee, or an unrelated person holds a controlling interest in both the lessor and lessee.

(b) "Affiliated persons" means members of the individual's family or persons who have ownership or control of a business entity.

(c) "Controlling interest" means direct or indirect ownership of at least eighty percent of the voting shares of a corporation or of the interests in a company, business or person other than a corporation.

(d) "Members of the individual's family" means the individual's spouse and brothers and sisters, whether by whole or half blood, including adopted persons, ancestors and lineal descendants.

(e) "Reciprocal insurer" has the same meaning prescribed in section 20-762.

11.

The gross proceeds of sales or gross income derived from a contract for the installation, assembly, repair or maintenance of machinery, equipment or other tangible personal property that is described in section 42-5061, subsection B and that has independent functional utility, pursuant to the following provisions:

(a) The deduction provided in this paragraph includes the gross proceeds of sales or gross income derived from all of the following:

(i) Any activity performed on machinery, equipment or other tangible personal property with independent functional utility.

(ii) Any activity performed on any tangible personal property relating to machinery, equipment or other tangible personal property with independent functional utility in furtherance of any of the purposes provided for under subdivision (d) of this paragraph.

(iii) Any activity that is related to the activities described in items (i) and (ii) of this subdivision, including inspecting the installation of or testing the machinery, equipment or other tangible personal property.

(b) The deduction provided in this paragraph does not include gross proceeds of sales or gross income from the portion of any contracting activity that consists of the development of, or modification to, real property in order to facilitate the installation, assembly, repair, maintenance or removal of machinery, equipment or other tangible personal property described in section 42-5061, subsection B.

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1116 (c) The deduction provided in this paragraph shall be determined without regard to the size or useful life of the machinery, equipment or other tangible personal property.

(d) For the purposes of this paragraph, "independent functional utility" means that the machinery, equipment or other tangible personal property can independently perform its function without attachment to real property, other than attachment for any of the following purposes:

(i) Assembling the machinery, equipment or other tangible personal property.

(ii) Connecting items of machinery, equipment or other tangible personal property to each other.

(iii) Connecting the machinery, equipment or other tangible personal property, whether as an individual item or as a system of items, to water, power, gas, communication or other services.

(iv) Stabilizing or protecting the machinery, equipment or other tangible personal property during operation by bolting, burying or performing other dissimilar nonpermanent connections to either real property or real property improvements.

12.

The leasing or renting of certified ignition interlock devices installed pursuant to the requirements prescribed by section 28-1461.

For the purposes of this paragraph, "certified ignition interlock device" has the same meaning prescribed in section 28-1301.

13.

Computer data center equipment sold to the owner, operator or qualified colocation tenant of a computer data center that is certified by the Arizona commerce authority under section 41-1519 or an authorized agent of the owner, operator or qualified colocation tenant during the qualification period for use in the qualified computer data center.

For the purposes of this paragraph, "computer data center", "computer data center equipment", "qualification period" and "qualified colocation tenant" have the same meanings prescribed in section 41-1519.

14.

The gross proceeds of sales or gross income derived from a contract with the owner of real property or improvements to real property for the maintenance, repair, replacement or alteration of existing property, except as specified in this paragraph.

The gross proceeds of sales or gross income derived from a de minimis amount of modification activity does not subject the contract or any part of the contract to tax.

For the purposes of this paragraph:

(a) Each contract is independent of another contract, except that any change order that directly relates to the scope of work of the original contract shall be treated the same as the original contract under this paragraph, regardless of the amount of modification activities included in the change order.

If a change order does not directly relate to the scope of work of the original contract, the change order shall be treated as a new contract, with the tax treatment of any subsequent change - 13 - S.B.

1116 order to follow the tax treatment of the contract to which the scope of work of the subsequent change order directly relates.

(b) Any term not defined in this paragraph that is defined in section 42-5075 has the same meaning prescribed in section 42-5075.

(c) This paragraph does not apply to a contract that primarily involves surface or subsurface improvements to land and that is subject to title 28, chapter 19, 20 or 22 or title 34, chapter 2 or 6 even if the contract also includes vertical improvements.

If a city or town imposes a tax on contracts that are subject to procurement processes under those provisions, the city or town shall include in the request for proposals a notice to bidders when those projects are subject to the tax.

This subdivision does not apply to contracts with:

(i) Community facilities districts, fire districts, county television improvement districts, community park maintenance districts, cotton pest control districts, hospital districts, pest abatement districts, health service districts, agricultural improvement districts, county free library districts, county jail districts, county stadium districts, special health care districts, public health services districts, theme park districts or revitalization districts.

(ii) Any special taxing district not specified in item (i) of this subdivision if the district does not substantially engage in the modification, maintenance, repair, replacement or alteration of surface or subsurface improvements to land.

15.

Monitoring services relating to an alarm system as defined in section 32-101.

16.

Tangible personal property, job printing or publications sold to or purchased by, or tangible personal property leased, rented or licensed for use to or by, a qualifying health sciences educational institution as defined in section 42-5001.

17.

The sale of coal.

18.

Tangible personal property incorporated or fabricated into a project described in paragraph 14 of this subsection, that is located within the exterior boundaries of an Indian reservation for which the owner, as defined in section 42-5075, of the project is an Indian tribe or an affiliated Indian.

For the purposes of this paragraph:

(a) "Affiliated Indian" means an individual Native American Indian who is duly registered on the tribal rolls of the Indian tribe for whose benefit the Indian reservation was established.

(b) "Indian reservation" means all lands that are within the limits of areas set aside by the United States for the exclusive use and occupancy of an Indian tribe by treaty, law or executive order and that are recognized as Indian reservations by the United States department of the interior.

(c) "Indian tribe" means any organized nation, tribe, band or community that is recognized as an Indian tribe by the United States - 14 - S.B.

1116 department of the interior and includes any entity formed under the laws of that Indian tribe.

19.

The charges for the leasing or renting of space to make attachments to utility poles as follows:

(a) By a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator.

(b) To a person that is engaged in the business of providing or furnishing electrical services or telecommunication services or that is a cable operator.

20.

Until March 1, 2017, the gross proceeds of sales or gross income derived from entry fees paid by participants for events that consist of a run, walk, swim or bicycle ride or a similar event, or any combination of these events.

21.

The gross proceeds of sales or gross income derived from entry fees paid by participants for events that are operated or conducted by nonprofit organizations that are exempt from taxation under section 501(c)(3) of the internal revenue code and of which no part of the organization's net earnings inures to the benefit of any private shareholder or individual, if the event consists of a run, walk, swim or bicycle ride or a similar event, or any combination of these events.

22.

The gross proceeds of sales or gross income derived from sales of machinery and equipment used directly for energy storage for later electrical use.

For the purposes of this paragraph:

(a) "Electric utility scale" means a person that is engaged in a business activity described in section 42-5063, subsection A or such person's equipment or wholesale electricity suppliers.

(b) "Energy storage" means commercially available technology for electric utility scale that is capable of absorbing energy, storing energy for a period of time and thereafter dispatching the energy and that uses mechanical, chemical or thermal processes to store energy.

(c) "Machinery and equipment used directly" means all machinery and equipment that are used for electric energy storage from the point of receipt of such energy in order to facilitate storage of the electric energy to the point where the electric energy is released.

B.

A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, on natural gas or liquefied petroleum gas used to propel a motor vehicle.

C.

A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from any of the following:

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1116 1.

A motor carrier's use on the public highways in this state if the motor carrier is subject to a fee prescribed in title 28, chapter 16, article 4.

2.

Leasing, renting or licensing a motor vehicle subject to and on which the fee has been paid under title 28, chapter 16, article 4.

3.

The sale of a motor vehicle and any repair and replacement parts and tangible personal property becoming a part of such motor vehicle to a motor carrier who is subject to a fee prescribed in title 28, chapter 16, article 4 and who is engaged in the business of leasing, renting or licensing such property.

4.

Incarcerating or detaining in a privately operated prison, jail or detention facility prisoners who are under the jurisdiction of the United States, this state or any other state or a political subdivision of this state or of any other state.

5.

Transporting for hire persons, freight or property by light motor vehicles subject to a fee under title 28, chapter 15, article 4.

6.

Any amount attributable to development fees that are incurred in relation to the construction, development or improvement of real property and paid by the taxpayer as defined in the model city tax code or by a contractor providing services to the taxpayer.

For the purposes of this paragraph:

(a) The attributable amount shall not exceed the value of the development fees actually imposed.

(b) The attributable amount is equal to the total amount of development fees paid by the taxpayer or by a contractor providing services to the taxpayer and the total development fees credited in exchange for the construction of, contribution to or dedication of real property for providing public infrastructure, public safety or other public services necessary to the development.

The real property must be the subject of the development fees.

(c) "Development fees" means fees imposed to offset capital costs of providing public infrastructure, public safety or other public services to a development and authorized pursuant to section 9-463.05, section 11-1102 or title 48 regardless of the jurisdiction to which the fees are paid.

7.

Any amount attributable to fees collected by transportation network companies issued a permit pursuant to section 28-9552.

8.

Transporting for hire persons by transportation network company drivers on transactions involving transportation network services as defined in section 28-9551.

9.

Transporting for hire persons by vehicle for hire companies that are issued permits pursuant to section 28-9503.

10.

Transporting for hire persons by vehicle for hire drivers on transactions involving vehicle for hire services as defined in section 28-9501.

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1116 D.

A city, town or other taxing jurisdiction shall not levy a transaction privilege, sales, use, franchise or other similar tax or fee, however denominated, in excess of one-tenth of one percent of the value of the entire product mined, smelted, extracted, refined, produced or prepared for sale, profit or commercial use, on persons engaged in the business of mineral processing, except to the extent that the tax is computed on the gross proceeds or gross income from sales at retail.

E.

In computing the tax base, any city, town or other taxing jurisdiction shall not include in the gross proceeds of sales or gross income:

1.

A manufacturer's cash rebate on the sales price of a motor vehicle if the buyer assigns the buyer's right in the rebate to the retailer.

2.

The waste tire disposal fee imposed pursuant to section 44-1302.

F.

A city or town shall not levy a use tax on the storage, use or consumption of tangible personal property in the city or town by a school district or charter school.

G.

A city, town or taxing jurisdiction shall not levy a transaction privilege, sales, gross receipts, use, franchise or other similar tax or fee, however denominated, on gross proceeds of sales or gross income derived from over-the-top services.

For the purposes of this subsection, "over-the-top services" means audio or video programming services that are received by the purchaser by means of an internet connection, regardless of the technology used, that include linear or live programming and that are generally considered comparable to programming provided by a radio or television broadcast station and includes related on-demand programming that is provided at no additional charge, regardless of whether the services are provided independently or packaged with other audio or video programming.

H.

A CITY, TOWN OR OTHER TAXING JURISDICTION MAY NOT LEVY A TRANSACTION PRIVILEGE, SALES, GROSS RECEIPTS, USE, FRANCHISE OR OTHER SIMILAR TAX OR FEE, HOWEVER DENOMINATED, ON THE BUSINESS OF RENTING OR LEASING REAL PROPERTY FOR RESIDENTIAL PURPOSES.

THIS SUBSECTION:

1.

DOES NOT APPLY TO HEALTH CARE FACILITIES, LONG-TERM CARE FACILITIES OR HOTEL, MOTEL OR OTHER TRANSIENT LODGING BUSINESSES.

2.

APPLIES REGARDLESS OF WHETHER THE CITY OR TOWN HAS ADOPTED THE MODEL CITY TAX CODE PURSUANT TO ARTICLE 2 OF THIS CHAPTER.

H.

I.

For the purposes of this section:

1.

"Cable operator" has the same meaning prescribed in section 9-505 and includes a video service provider.

2.

"Electrical services" means transmitting or distributing electricity, electric lights, current or power over lines, wires or cables.

3.

"Telecommunication services" means transmitting or relaying sound, visual image, data, information, images or material over lines, - 17 - S.B.

1116 wires or cables by radio signal, light beam, telephone, telegraph or other electromagnetic means.

4.

"Utility pole" means any wooden, metal or other pole used for utility purposes and the pole's appurtenances that are attached or authorized for attachment by the person controlling the pole.

6.

Repeal Section 42-6011, Arizona Revised Statutes, is repealed.

Sec.

7.

Section 42-15103, Arizona Revised Statutes, is amended to read:

42-15103.

Contents of notice form The notice form shall:

1.

Prominently display a statement for all residential properties:

(a) Which defines class three properties as described in section 42-12003.

(b) Informing property owners that if the property listed on the notice does not meet the definition DESCRIPTION provided pursuant to subdivision (a) of this section PARAGRAPH, the owner must notify the county assessor of the usage of the property or they THE OWNER may be subject to a civil penalty prescribed by section 42-12052.

IncludeRetroactivity simplifiedThis instructionsact onapplies theretroactively procedureto andtaxable deadlinesyears forbeginning appealingfrom theand assessedafter valuationDecember shown31, on2021. the notice.

3.- 4 -

Prominently display a statement informing owners of property that is used for residential rental purposes that:

(a) The parcel must be listed on the notice as class four, and the owner must register the residential rental property with the county assessor pursuant to section 33-1902 or the owner may be subject to a penalty.

(b) If the owner is required to register the rental property with the county assessor and fails to do so after receipt of this notice, the city or town may impose a civil penalty payable to the city or town in the amount of one hundred fifty dollars $150 per day for each day of violation, and the city or town may impose enhanced inspection and enforcement measures on the property.

(c) If the city or town in which the property is located requires the lessor to pay transaction privilege tax on residential rent, a notice of applicable requirements imposed by the city or town and that failure to pay the applicable tax could result in a penalty or fine by the city or town.

(d) (c) Residential rental properties are required to comply with the landlord tenant law pursuant to title 33, chapters 10 and 11.

Sec.

8.

Rent reduction;

delayed repeal A.

On or before January 1, 2023, the owner of real property that is rented or leased for residential purposes and that is located in a city, town or other taxing jurisdiction that levies a transaction privilege tax on the business of renting or leasing real property for residential - 18 - S.B.

1116 purposes shall reduce the amount of rent due by an amount equal to the difference caused by the elimination of the transaction privilege tax on the business of renting or leasing real property for residential purposes as provided by this act.

B.

This section is repealed from and after December 31, 2025.

Sec.

9.

Notice;

retroactivity;

delayed repeal A.

On or before October 31, 2022, the department of revenue shall electronically notify each residential rental transaction privilege tax licensee that a city, town or other taxing jurisdiction that levies a transaction privilege tax on the business of renting or leasing real property for residential purposes will no longer levy the tax from and after December 31, 2022.

If the department of revenue is unable to send the notice to a licensee electronically, the department shall send the notice by first class mail to all of the following:

1.

The address appearing on the residential transaction privilege tax license.

2.

The address of any property management company, statutory agent or other representative listed as a delegate with the department of revenue for each residential rental property.

3.

The address of each residential rental property that is located in the city, town or taxing jurisdiction that will no longer levy the transaction privilege tax on the business of renting or leasing real property for residential purposes.

B.

The department of revenue shall post the notice required by subsection A of this section on its website.

C.

This section applies retroactively to from and after September 30, 2022.

D.

This section is repealed from and after December 31, 2025.

Sec.

10.

Legislative intent The legislature intends to encourage taxpayers that rent or lease real property for residential purposes to pass along the savings provided to the taxpayer pursuant to this act to the tenant who is renting or leasing the taxpayer's residential property.

Sec.

11.

Effective date Except as provided in section 12 of this act, this act is effective from and after September 30, 2024.

Sec.

12.

Conditional enactment;

applicability Section 42-6004, Arizona Revised Statutes, as amended by Laws 2021, chapter 417, section 11 and this act, becomes effective on the date prescribed by Laws 2018, chapter 263, section 5 and applies to taxable periods beginning from and after December 31, 2022 but only on the occurrence of the condition prescribed by Laws 2018, chapter 263, section 5.

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