Arizona Laws 42-5071. Personal property rental classification; definitions
A. The personal property rental classification is comprised of the business of leasing or renting tangible personal property for a consideration and includes peer-to-peer car sharing. The tax does not apply to:
Terms Used In Arizona Laws 42-5071
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Business: includes all activities or acts, personal or corporate, that are engaged in or caused to be engaged in with the object of gain, benefit or advantage, either directly or indirectly, but does not include either:
(a) Casual activities or sales. See Arizona Laws 42-5001
- company: includes an individual, firm, partnership, joint venture, association, corporation, estate, trust, marketplace facilitator or remote seller, this state, any county, city, town, district, other than a school district, or other political subdivision and any other group or combination acting as a unit, and the plural as well as the singular number. See Arizona Laws 42-5001
- Department: means the department of revenue. See Arizona Laws 42-1001
- Gross income: means the gross receipts of a taxpayer derived from trade, business, commerce or sales and the value proceeding or accruing from the sale of tangible personal property or service, or both, and without any deduction on account of losses. See Arizona Laws 42-5001
- Gross proceeds of sales: means the value proceeding or accruing from the sale of tangible personal property without any deduction on account of the cost of property sold, expense of any kind or losses, but cash discounts allowed and taken on sales are not included as gross income. See Arizona Laws 42-5001
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Month: means a calendar month unless otherwise expressed. See Arizona Laws 1-215
- Person: means a natural person, individual, proprietor, proprietorship, company, corporation, organization, association, joint venture, partner, partnership, trust, estate or limited liability company, the federal or state government, a political subdivision of a state or any other legal entity or combination of entities that owns, controls or has possession of real or personal property. See Arizona Laws 42-11001
- Personal property: All property that is not real property.
- Personal property: includes property of every kind, both tangible and intangible, that is not included as real estate. See Arizona Laws 42-11001
- Property: includes both real and personal property. See Arizona Laws 1-215
- Sale: means any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatever, including consignment transactions and auctions and transactions facilitated by a marketplace facilitator on behalf of a marketplace seller, of tangible personal property or other activities taxable under this chapter, for a consideration, and includes:
(a) Any transaction by which the possession of property is transferred but the seller retains the title as security for the payment of the price. See Arizona Laws 42-5001
- Tangible personal property: means personal property that may be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses. See Arizona Laws 42-5001
- Taxpayer: means any person who is liable for any tax imposed by this article. See Arizona Laws 42-5001
1. Leasing or renting films, tapes or slides used by theaters or movies, which are engaged in business under the amusement classification, or used by television stations or radio stations.
2. Activities engaged in by the Arizona exposition and state fair board or county fair commissions in connection with events sponsored by such entities.
3. Leasing or renting tangible personal property by a parent business entity to a subsidiary business entity or by a subsidiary business entity to another subsidiary of the same parent business entity if taxes were paid under this chapter on the gross proceeds or gross income accruing from the initial sale of the tangible personal property. For the purposes of this paragraph, "subsidiary" means a business entity of which at least eighty percent of the voting shares are owned by the parent business entity.
4. Operating coin-operated washing, drying and dry cleaning machines or coin-operated car washing machines at establishments for the use of such machines.
5. Leasing or renting tangible personal property for incorporation into or comprising any part of a qualified environmental technology facility as described in Section 41-1514.02. This paragraph shall apply for ten full consecutive calendar or fiscal years following the initial lease or rental by each qualified environmental technology manufacturer, producer or processor.
6. Leasing or renting aircraft, flight simulators or similar training equipment to students or staff by nonprofit, accredited educational institutions that offer associate or baccalaureate degrees in aviation or aerospace related fields.
7. Leasing or renting photographs, transparencies or other creative works used by this state on internet websites, in magazines or in other publications that encourage tourism.
8. Leasing or renting 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.
9. The leasing or renting of space to make attachments to utility poles, as follows:
(a) By a person that is engaged in business under section 42-5063 or 42-5064 or that is a cable operator.
(b) To a person that is engaged in business under section 42-5063 or 42-5064 or that is a cable operator.
10. Leasing or renting billboards that are designed, intended or used to advertise or inform and that are visible from any street, road or other highway.
B. The tax base for the personal property rental classification is the gross proceeds of sales or gross income derived from the business, but the gross proceeds of sales or gross income derived from the following shall be deducted from the tax base:
1. Reimbursements by the lessee to the lessor of a motor vehicle for payments by the lessor of the applicable fees and taxes imposed by sections 28-2003, 28-2352, 28-2402, 28-2481 and 28-5801, Title 28, Chapter 15, Article 2 and article IX, section 11, Constitution of Arizona, to the extent such amounts are separately identified as such fees and taxes and are billed to the lessee.
2. Leases or rentals of tangible personal property that, if it had been purchased instead of leased or rented by the lessee, would have been exempt under:
(a) Section 42-5061, subsection A, paragraph 8, 9, 12, 13, 25, 29, 49 or 53.
(b) Section 42-5061, subsection B.
(c) Section 42-5061, subsection I, paragraph 1.
(d) Section 42-5061, subsection M.
3. Motor vehicle fuel and use fuel that are 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 28-5739 and sales of aviation fuel that are subject to the tax imposed under section 28-8344.
4. Leasing or renting a motor vehicle subject to and on which the fee has been paid under Title 28, Chapter 16, Article 4.
5. Amounts received by a motor vehicle dealer for the first month of a lease payment if the lease and the lease payment for the first month of the lease are transferred to a third-party leasing company.
C. Sales of tangible personal property to be leased or rented to a person engaged in a business classified under the personal property rental classification are deemed to be resale sales.
D. In computing the tax base, the gross proceeds of sales or gross income from the lease or rental of a motor vehicle does not include any amount attributable to the car rental surcharge under section 5-839, 28-5810 or 48-4234.
E. Until December 31, 1988, leasing or renting animals for recreational purposes is exempt from the tax imposed by this section. Beginning January 1, 1989, the gross proceeds or gross income from leasing or renting animals for recreational purposes is subject to taxation under this section. Tax liabilities, penalties and interest paid for taxable periods before January 1, 1989 shall not be refunded unless the taxpayer requesting the refund provides proof satisfactory to the department that the monies paid as taxes will be returned to the customer.
F. The tax base of the personal property rental classification does not include the gross proceeds or gross income received by a shared vehicle owner from a peer-to-peer car sharing program pursuant to section 42-5009, subsection R.
G. 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. "Peer-to-peer car sharing" has the same meaning prescribed in section 28-9601.
3. "Peer-to-peer car sharing program" has the same meaning prescribed in section 28-9601.
4. "Shared vehicle owner" has the same meaning prescribed in section 28-9601.
5. "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.