Summary
This item transmits recommendations from the Mayor and Council for appointment or
reappointment to City Boards and Commissions.

Responsible Department
This item is submitted by the Mayor's Office.




Page 13
ATTACHMENT A




To: City Council Date: February 17, 2021
From: Mayor Kate Gallego

Subject: BOARDS AND COMMISSIONS – APPOINTEES

The purpose of this memo is to provide recommendations for appointments to the
following Boards and Commissions:

Alhambra Village Planning Committee

Councilwoman Betty Guardado recommends the following individuals for appointment:

Jim DeGraffenreid
Mr. DeGraffenreid is an Instructional Professional at Arizona State University and a
resident of District 5. He fills a vacancy for a term to expire November 19, 2021.

Maurita Harris
Ms. Harris is a Project Manager and Architect III at PHX Architecture and a resident of
District 5. She fills a vacancy for a term to expire November 19, 2022.

Desert View Village Planning Committee

Councilman Jim Waring recommends the following individual for appointment:

Michelle Santoro
Ms. Santoro is a Senior Planner at Earl & Curley and a resident of District 2. She fills a
vacancy for a term to expire November 19, 2022.

Library Advisory Board

I recommend the following individual for appointment:

Anne Thorne
Ms. Thorne is a Realtor at HomeSmart Real Estate and a resident of District 4. She fills
a vacancy for a term to expire February 17, 2024.




Page 14
Sister Cities Commission

I recommend the following individual for appointment:

Karl Obergh
Mr. Obergh is the President of Ritoch-Powell & Associates and a resident of District 7.
He replaces Anne Thorne for a term to expire June 30, 2023.

South Mountain Village Planning Committee

Councilman Sal DiCiccio recommends the following individual for appointment:

Trent Marchuk
Mr. Marchuk works in Technology Operations at Charles Schwab and is a resident of
District 8. He fills a vacancy for a term to expire November 19, 2021.

Councilmember Carlos Garcia recommends the following individual for appointment:

Emma Viera
Ms. Viera is the Executive Director of Unlimited Potential and a resident of District 3.
She replaces Dolores Levesque for a term to expire November 19, 2022.




Page 15



Report

Liquor License - Spice Sea

Request for a liquor license. Arizona State License Application 131298.

Summary

Applicant
Yong Huang, Agent

License Type
Series 12 - Restaurant

Location
3345 W. Greenway Road
Zoning Classification: C-2
Council District: 1

This request is for a new liquor license for a restaurant. This location was previously
licensed for liquor sales and does not have an interim permit.

The 60-day limit for processing this application is Feb. 20, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
The ownership of this business has an interest in other active liquor license(s) in the
State of Arizona. This information is listed below and includes liquor license violations


Page 16

on file with the AZ Department of Liquor Licenses and Control and, for locations within
the boundaries of Phoenix, the number of aggregate calls for police service within the
last 12 months for the address listed.

Lychee Kitchen (Series 12)
23450 N. 19th Ave., Ste. 103, Phoenix
Calls for police service: 9
Liquor license violations: None

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I have been in restaurant management for 20 years and I have completed all liquor
training courses.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“The Spice Sea is a great new seafood boiler restaurant that is family and budget
friendly. It will be a great addition to the neighborhood.”

Staff Recommendation
Staff recommends approval of this application.

Attachments
Liquor License Data - Spice Sea
Liquor License Map - Spice Sea

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 17
Liquor License Data: SPICE SEA
Liquor License

Description Series 1 Mile 1/2 Mile

Liquor Store 9 3 2

Beer and Wine Store 10 2 1

Hotel 11 1 0

Restaurant 12 5 3


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.98 57.43 83.43

Violent Crimes 7.43 8.33 11.88

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 62 134

Total Violations 105 193




Page 18
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1041001 1290 40 % 21 % 11 %

1041004 1847 89 % 14 % 9%

1042022 2649 87 % 0% 15 %

1042072 1463 95 % 11 % 5%

1042073 1396 8% 4% 34 %

1042263 658 27 % 17 % 37 %

1042264 1538 92 % 7% 15 %

Average 61 % 13 % 19 %




Page 19
Liquor License Map: SPICE SEA
3345 W GREENWAY RD




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Report

***REQUEST TO CONTINUE (SEE ATTACHED MEMO)*** Liquor License - Special
Event - M.U.S.I.C. Foundation of Arizona, Inc.

Request for a Series 15 - Special Event liquor license for the temporary sale of all
liquors.

Summary

Applicant
Bradley Laughlin

Location
5410 E. High St.
Council District: 2

Function
Food and Music Festival

Date(s) - Time(s) / Expected Attendance
March 27, 2021 - 2:00 p.m. to 10:30 p.m. / 2,450 attendees
March 28, 2021 - 12:00 Noon to 8:30 p.m. / 2,450 attendees

Staff Recommendation
Staff recommends approval of this application noting that approval of this application is
based on criteria set forth in Title IV of the Arizona Revised Statutes and noting that
the applicant has agreed to adhere to the implementation and enforcement of safety
precautions consistent with the guidance issued by both the Centers for Disease
Control and Prevention and the Arizona Department of Health Services.

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 21



Report

Liquor License - Dickey's Barbecue

Request for a liquor license. Arizona State License Application 132095.

Summary

Applicant
Theresa Morse, Agent

License Type
Series 7 - Beer and Wine Bar

Location
402 E. Greenway Pkwy., Ste. 2
Zoning Classification: C-2
Council District: 3

This request is for a new liquor license for a beer and wine bar. This location was
previously licensed for liquor sales and does not have an interim permit.

The 60-day limit for processing this application is March 1, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
This information is not provided due to the multiple ownership interests held by the
applicant in the State of Arizona.


Page 22


Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“The owners have experience in owning and operating liquor licensed establishments.
The existing liquor establishments have had no violations with city, state or county.
Their establishments are geared towards the community by providing a clean and
healthy environment for families. Their other businesses average at least 95 percent
food sales. Liquor law training for all staff is conducted on a regular basis to ensure
compliance with current liquor laws.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“This location has been operating without a liquor license for approximately 3 years.
Customers have inquired about service of alcohol to complement the service of food.
Therefore, the ownership decided to apply for a liquor license for the location.”

Staff Recommendation
Staff recommends approval of this application.

Attachments
Liquor License Data - Dickey's Barbecue
Liquor License Map - Dickey's Barbecue

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 23
Liquor License Data: DICKEY'S BARBECUE
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 1 1

Beer and Wine Bar 7 2 0

Liquor Store 9 5 3

Beer and Wine Store 10 8 5

Restaurant 12 19 14


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 42.36 112.79 262.73

Violent Crimes 7.67 14.14 31.52

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 60 11

Total Violations 100 16




Page 24
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1036043 1058 42 % 16 % 4%

1036111 1396 66 % 14 % 3%

1036112 1335 87 % 10 % 0%

1036121 649 0% 41 % 18 %

1036122 1023 87 % 8% 12 %

1036123 1542 94 % 8% 0%

1036124 1189 0% 19 % 32 %

6189001 1603 54 % 10 % 6%

6189005 1013 0% 37 % 22 %

6191001 2198 0% 11 % 23 %

6192002 1223 0% 15 % 29 %

Average 61 % 13 % 19 %




Page 25
Liquor License Map: DICKEY'S BARBECUE
402 E GREENWAY PKWY




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Report

Liquor License - 7-Eleven #20622F

Request for a liquor license. Arizona State License Application 126664.

Summary

Applicant
Amarpal Hayer, Agent

License Type
Series 10 - Beer and Wine Store

Location
646 W. Indian School Road
Zoning Classification: C-2 SAUMSO
Council District: 4

This request is for a new liquor license for a convenience store that does not sell gas.
This location was previously licensed for liquor sales and may currently operate with
an interim permit.

The 60-day limit for processing this application is Feb. 21, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
This applicant does not hold an interest in any other active liquor license in the State of


Page 27

Arizona.

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I have worked in 7-Eleven stores for many years, as both a sales associate and
Assistant Manager and so I am familiar with the operation and management of 7-
Eleven stores. I have completed an extensive corporate training program regarding the
operation of 7-Eleven stores and have completed basic and management liquor
training by an authorized trained, as required by Arizona liquor laws.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“This location has been a 7-Eleven store since 2007. I will operate the store in the
same responsible manner and with the high standards required of 7-Eleven
franchisees. I plan to continue to provide quality service to the neighbors of this store,
and to the general public which they have enjoyed and have come to rely on for many
years.”

Staff Recommendation
Staff recommends approval of this application.

Attachments
Liquor License Data - 7-Eleven #20622F
Liquor License Map - 7-Eleven #20622F

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 28
Liquor License Data: 7-ELEVEN #20622F
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 11 6

Beer and Wine Bar 7 3 1

Liquor Store 9 4 2

Beer and Wine Store 10 10 6

Hotel 11 1 1

Restaurant 12 20 6


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.98 142.09 157.32

Violent Crimes 7.43 24.81 29.61

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 62 123

Total Violations 105 225




Page 29
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1089011 988 36 % 15 % 30 %

1089012 1297 31 % 23 % 54 %

1089013 956 82 % 4% 8%

1089024 1278 46 % 9% 21 %

1104001 1724 53 % 6% 33 %

1104004 1344 49 % 16 % 20 %

1105011 551 49 % 20 % 14 %

1105012 1249 13 % 23 % 11 %

1171001 2126 10 % 15 % 10 %

1171002 703 57 % 27 % 12 %

Average 61 % 13 % 19 %




Page 30
Liquor License Map: 7-ELEVEN #20622F
646 W INDIAN SCHOOL RD




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Report

Liquor License - OG Liquor

Request for a liquor license. Arizona State License Application 09070527.

Summary

Applicant
JJ Bazzi, Agent

License Type
Series 9 - Liquor Store

Location
4820 N. 27th Ave.
Zoning Classification: C-2
Council District: 4

This request is for an ownership transfer of a liquor license for a liquor store. This
location was previously licensed for liquor sales and may currently operate with an
interim permit.

The 60-day limit for processing this application is March 1, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
The ownership of this business has an interest in other active liquor license(s) in the


Page 32

State of Arizona. This information is listed below and includes liquor license violations
on file with the AZ Department of Liquor Licenses and Control and, for locations within
the boundaries of Phoenix, the number of aggregate calls for police service within the
last 12 months for the address listed.

Chevron (Series 10)
3501 W. Camelback Road, Phoenix
Calls for police service: 69
Liquor license violations: None

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“In the last 5 years I've owned and operated another business which along with this
one I will continue to operate as a responsible retailer abiding and always following all
the rules and regulations.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“I will bring additional jobs and revenue to the area along with providing a convenient
location to the residents in the area with no means of transportation.”

Staff Recommendation
Staff recommends approval of this application noting the applicant must resolve any
pending City of Phoenix building and zoning requirements, and be in compliance with
the City of Phoenix Code and Ordinances.

Attachments
Liquor License Data - OG Liquor
Liquor License Map - OG Liquor

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.



Page 33
Liquor License Data: OG LIQUOR
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 1 1

Beer and Wine Bar 7 2 0

Liquor Store 9 6 2

Beer and Wine Store 10 15 5

Hotel 11 1 1

Restaurant 12 7 1


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 42.36 140.65 148.51

Violent Crimes 7.67 48.24 50.10

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 60 151

Total Violations 100 261




Page 34
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1072011 2335 21 % 25 % 49 %

1072012 2127 13 % 9% 63 %

1073003 737 75 % 37 % 24 %

1073004 2614 23 % 5% 31 %

1090011 1552 19 % 22 % 42 %

1090012 3369 0% 11 % 59 %

1090022 2291 15 % 18 % 63 %

1090033 1600 22 % 13 % 68 %

1091011 1722 69 % 0% 34 %

1091012 2067 85 % 10 % 30 %

1091022 2966 78 % 14 % 50 %

Average 61 % 13 % 19 %




Page 35
Liquor License Map: OG LIQUOR
4820 N 27TH AVE




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Report

Liquor License - Chevron

Request for a liquor license. Arizona State License Application 131418.

Summary

Applicant
JJ Bazzi, Agent

License Type
Series 9 - Liquor Store

Location
3501 W. Camelback Road
Zoning Classification: C-2
Council District: 5

This request is for a new liquor license for a liquor store. This location is currently
licensed for liquor sales with a Series 10 - Beer and Wine Store, liquor license.

The 60-day limit for processing this application is Feb. 21, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
The ownership of this business has an interest in other active liquor license(s) in the
State of Arizona. This information is listed below and includes liquor license violations


Page 37

on file with the AZ Department of Liquor Licenses and Control and, for locations within
the boundaries of Phoenix, the number of aggregate calls for police service within the
last 12 months for the address listed.

Chevron (Series 10)
3501 W. Camelback Road, Phoenix
Calls for police service: 69
Liquor license violations: None

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“In the last 5 years and currently operating as a responsible retailer that abides and
always follow all the rules and regulations.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“I will bring additional jobs and revenue to the area along with providing a convenient
location to the residents in the area with no means of transportation.”

Staff Recommendation
Staff recommends approval of this application.

Attachments
Liquor License Data - Chevron
Liquor License Map - Chevron

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 38
Liquor License Data: CHEVRON
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 1 0

Beer and Wine Bar 7 2 2

Liquor Store 9 1 0

Beer and Wine Store 10 8 3

Restaurant 12 5 4


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 42.36 105.59 99.89

Violent Crimes 7.67 29.06 34.92

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 60 190

Total Violations 100 320




Page 39
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1071021 1531 50 % 17 % 42 %

1071022 2275 45 % 20 % 45 %

1071023 2082 32 % 14 % 38 %

1072011 2335 21 % 25 % 49 %

1091011 1722 69 % 0% 34 %

1091021 2115 47 % 14 % 46 %

1092001 1455 52 % 10 % 45 %

1092002 1665 36 % 30 % 46 %

1092003 1593 11 % 26 % 32 %

Average 61 % 13 % 19 %




Page 40
Liquor License Map: CHEVRON
3501 W CAMELBACK RD




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Report

Liquor License - West Side Smoke Shop

Request for a liquor license. Arizona State License Application 132070.

Summary

Applicant
Sarkhdon Yonathan, Agent

License Type
Series 10 - Beer and Wine Store

Location
2709 W. Northern Ave.
Zoning Classification: C-2
Council District: 5

This request is for a new liquor license for a tobacco shop. This location was not
previously licensed for liquor sales and does not have an interim permit. This location
requires a Use Permit to allow package liquor sales.

The 60-day limit for processing this application is March 1, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
This applicant does not hold an interest in any other active liquor license in the State of


Page 42

Arizona.

Public Opinion
Four letters protesting the issuance of this license have been received and are on file
in the Office of the City Clerk. The letters are from Lane Avenue Block Watch, North
Glen Square Neighborhood Association, Alta Vista Neighborhood Block Watch and
Ocotillo Glen Neighborhood Association. There are concerns regarding the proximity to
a nearby school, and they feel the need and convenience of the community is already
met with the existing two licenses that are directly across the street from the proposed
location. There are also concerns the issuance of the license in a high crime area will
create instability within the neighborhood.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I an a responsible member of society and have never been arrested or convicted of
any crimes. I have previouly owned a liquor store and managed the sales within all
local and fereral regulations. I have registered for all required classes and will comply
with all regulations to insure all sales will be legal. I plan on being present and involved
in all daily activities pertaining to the business and daily sales.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“We will provide personalized service to members of the community to ensure their
grocery needs are met with daily provision.”

Staff Recommendation
Staff recommends approval of this application noting the applicant must resolve any
pending City of Phoenix building and zoning requirements, and be in compliance with
the City of Phoenix Code and Ordinances. Staff gave careful consideration to the
protest letters received, however after reviewing the application in its entirety staff is
recommending approval of this application.

Attachments
Liquor License Data - West Side Smoke Shop
Liquor License Map - West Side Smoke Shop




Page 43

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 44
Liquor License Data: WEST SIDE SMOKE SHOP
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 2 0

Beer and Wine Bar 7 1 1

Liquor Store 9 3 0

Beer and Wine Store 10 7 3

Restaurant 12 6 1


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 42.36 132.32 152.97

Violent Crimes 7.67 31.90 42.99

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 60 115

Total Violations 100 239




Page 45
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1055011 1055 38 % 6% 59 %

1055012 1442 0% 11 % 38 %

1056012 1895 76 % 6% 27 %

1056021 2042 80 % 0% 26 %

1059001 1697 50 % 0% 42 %

1059003 1609 59 % 5% 25 %

1060011 1487 31 % 17 % 50 %

1060021 1678 27 % 14 % 27 %

Average 61 % 13 % 19 %




Page 46
Liquor License Map: WEST SIDE SMOKE SHOP
2709 W NORTHERN AVE




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Report

Liquor License - Carioca Shell #67

Request for a liquor license. Arizona State License Application 131395.

Summary

Applicant
Howard Magee, Agent

License Type
Series 10 - Beer and Wine Store

Location
6675 W. Lower Buckeye Road
Zoning Classification: C-1 (Approved C-2)
Council District: 7

This request is for a new liquor license for a convenience store that sells gas. This
location was not previously licensed for liquor sales and does not have an interim
permit. This location requires a Use Permit to allow package liquor sales. This
business is currently under construction with plans to open in March 2021.

The 60-day limit for processing this application is Feb. 20, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona


Page 48

This information is not provided due to the multiple ownership interests held by the
applicant in the State of Arizona.

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I am the agent/applicant for approx. 40 C-Store locations for the Carioca Company.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“The Carioca Company operates 40 C-Store locations in Arizona. The Carioca
Company has operated C-Store / gas stations in Arizona / Phoenix metro area for over
40 years.”

Staff Recommendation
Staff recommends approval of this application noting the applicant must resolve any
pending City of Phoenix building and zoning requirements, and be in compliance with
the City of Phoenix Code and Ordinances.

Attachments
Liquor License Data - Carioca Shell #67
Liquor License Map - Carioca Shell #67

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 49
Liquor License Data: CARIOCA SHELL #67
Liquor License

Description Series 1 Mile 1/2 Mile

Liquor Store 9 1 1

Beer and Wine Store 10 1 0


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.98 27.97 34.92

Violent Crimes 7.43 5.30 6.47

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 62 38

Total Violations 105 43


Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1125102 931 93 % 10 % 39 %

1125113 1068 84 % 1% 50 %

1125131 3959 74 % 10 % 14 %

1125132 0 0% 0% 0%

1125133 2068 77 % 9% 28 %

1125134 2479 75 % 16 % 0%

Average 61 % 13 % 19 %




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Liquor License Map: CARIOCA SHELL #67
6675 W LOWER BUCKEYE RD




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Report

Liquor License - Paddock Lounge

Request for a liquor license. Arizona State License Application 131391.

Summary

Applicant
Brian Petersen, Agent

License Type
Series 12 - Restaurant

Location
2425 S. 21st St.
Zoning Classification: A-2 RSIO AIO
Council District: 8

This request is for a new liquor license for a restaurant. This location was not
previously licensed for liquor sales and does not have an interim permit.

The 60-day limit for processing this application is Feb. 20, 2021.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
This applicant does not hold an interest in any other active liquor license in the State of
Arizona.


Page 52


Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I am a businessman who has operated and managed 35 separate K1 Speed kart
racing facilities across the U.S. since the first one was opened in Carlsbad, CA in
2005. This business is a safe and popular entertainment activity which occupies
between 40,000 sf and 75,000 sf leased spaces, depending upon the center. I employ
over 1,000 employees successfully. During this period, I have had no legal or criminal
issues. No reasons exist which would disqualify me from holding a liquor license.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“The proposed addition of beer & wine to the concession area restaurant (Paddock
Lounge) will improve the environment and experience of K1 Speed clientele. This
clientele is primarily high-end corporate users. The facility provides a clean, upscale
entertainment center as an alternative to expensive corporate retreats or motivational
presentations. The alcohol license will allow for a minor increase in tax revenue
generated. No schools or churches are located within the area which could be a
conflict.”

Staff Recommendation
Staff recommends approval of this application.

Attachments
Liquor License Data - Paddock Lounge
Liquor License Map - Paddock Lounge

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 53
Liquor License Data: PADDOCK LOUNGE
Liquor License

Description Series 1 Mile 1/2 Mile

Wholesaler 4 3 2

Bar 6 1 0

Conveyance 8 1 0

Beer and Wine Store 10 1 0

Restaurant 12 1 1


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.98 19.61 14.64

Violent Crimes 7.43 1.48 0.74

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 62 9

Total Violations 105 13


Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1138021 0 0% 0% 0%

1172001 823 25 % 17 % 70 %

Average 61 % 13 % 19 %




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Liquor License Map: PADDOCK LOUNGE
2425 S 21ST ST




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Report

(CONTINUED FROM FEB. 3, 2021) - Liquor License - Lucky Market

Request for a liquor license. Arizona State License Application 09070322.

Summary

Applicant
Geeta Bhatt, Agent

License Type
Series 9 - Liquor Store

Location
16401 N. Cave Creek Road
Zoning Classification: C-2
Council District: 2

This request is for an ownership transfer of a liquor license for a liquor store. This
location was previously licensed for liquor sales and may currently operate with an
interim permit.

The 60-day limit for processing this application was Jan. 12, 2021. However, the
applicant has submitted a written request for more time.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.




Page 56

Other Active Liquor License Interest in Arizona
The ownership of this business has an interest in other active liquor license(s) in the
State of Arizona. This information is listed below and includes liquor license violations
on file with the AZ Department of Liquor Licenses and Control and, for locations within
the boundaries of Phoenix, the number of aggregate calls for police service within the
last 12 months for the address listed.

Jerry's Drive In Liquor (Series 9)
1217 S. Rural Road, Tempe
Calls for police service: N/A - not in Phoenix
Liquor license violations: In October 2017, a fine of $750 was paid for selling liquor to
an intoxicated or disorderly person. In October 2018, a fine of $750 was paid for failure
to request ID from underage buyer and for selling, giving or furnishing underage
person with alcohol. In November 2019, a fine of $750 was paid for employee
consuming on duty and off-sale open container on premises.

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I have the experience since 2002 in the liquor business. It is a good community store
and I have ability to handle the business.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“I should get the license because the commity is safe to sell liquor and it is a good
small store and it is convenient to the community.”

Staff Recommendation
Staff recommends disapproval of this application based on a Police Department
recommendation of disapproval. The Police Department disapproval is based on
concerns regarding multiple recent violations demonstrating a lack of control over
another liquor establishment operated by the same applicant. The applicant has not
demonstrated the capability, qualification and reliability to hold and control a liquor
license.



Page 57


Attachments
Liquor License Data - Lucky Market
Liquor License Map - Lucky Market
Liquor License Police Department Recommendation - Lucky Market

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 58
Liquor License Data: LUCKY MARKET
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 4 1

Beer and Wine Bar 7 2 2

Liquor Store 9 5 1

Beer and Wine Store 10 9 6

Restaurant 12 12 8


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.27 75.71 118.04

Violent Crimes 7.26 14.57 20.16

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 61 89

Total Violations 103 174




Page 59
Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1033051 1180 47 % 29 % 35 %

1033052 2333 59 % 9% 30 %

1033061 921 18 % 28 % 32 %

1033062 2272 17 % 22 % 37 %

1036061 1067 84 % 15 % 13 %

1036063 2174 78 % 13 % 25 %

6194001 1068 54 % 32 % 9%

6195003 2362 65 % 14 % 8%

Average 61 % 13 % 19 %




Page 60
Liquor License Map: LUCKY MARKET
16401 N CAVE CREEK RD




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Date: 11/19/2020
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Report

Liquor License - Tennessee Grill

Request for a liquor license. Arizona State License Application 125380.

Summary

Applicant
Phillip Ladiser, Agent

License Type
Series 12 - Restaurant

Location
4220 W. Summit Walk Court, Ste. 1202
Zoning Classification: C-2 PCD
Council District: 1

This request is for a new liquor license for a restaurant. This location was previously
licensed for liquor sales and may currently operate with an interim permit. This
business is currently being remodeled.

The 60-day limit for processing this application was Jan. 9, 2021. However, the
applicant has submitted a written request for more time.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona


Page 63

This applicant does not hold an interest in any other active liquor license in the State of
Arizona.

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I have worked in the food sales industry for over 10 years. I have completed the Title
4 basic and management liquor law training courses with ALIC. All employees will be
required to attend the liquor class.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“This restaurant has been open for several years. I would like to continue to offer my
patrons great food and beverages while dining at the Tennessee Grill.”

Staff Recommendation
Staff recommends disapproval of this application based on a Police Department
recommendation for disapproval. The Police Department disapproval is based on
concerns of undisclosed funding and significant discrepancies between the application
and statements made during the police interview. The applicant has not demonstrated
the capability, qualifications and reliability to hold and control a liquor license.

Attachments
Liquor License Data - Tennessee Grill
Liquor License Map - Tennessee Grill
Liquor License Police Department Recommendation - Tennessee Grill

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 64
Liquor License Data: TENNESSEE GRILL
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 1 1

Beer and Wine Bar 7 1 1

Liquor Store 9 1 1

Beer and Wine Store 10 2 2

Restaurant 12 1 1


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 40.27 11.25 41.50

Violent Crimes 7.26 0.55 1.69

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 61 1

Total Violations 103 2


Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

6100003 1546 54 % 25 % 3%

6100004 2234 70 % 6% 4%

6102003 1703 53 % 21 % 5%

Average 61 % 13 % 19 %




Page 65
Liquor License Map: TENNESSEE GRILL
4220 W SUMMIT WALK CT




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Date: 11/13/2020
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.




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Report

Liquor License - El Pueblo Restaurant

Request for a liquor license. Arizona State License Application 128136.

Summary

Applicant
Amanda Arriaza, Agent

License Type
Series 12 - Restaurant

Location
2270 N. 75th Ave., Ste. 101
Zoning Classification: C-2
Council District: 7

This request is for a new liquor license for a restaurant. This location was not
previously licensed for liquor sales and does not have an interim permit.

The 60-day limit for processing this application was Feb. 1, 2021. However, the
applicant submitted a written request for more time.

Pursuant to A.R.S. 4-203, a spirituous liquor license shall be issued only after
satisfactory showing of the capability, qualifications and reliability of the applicant and
that the public convenience and the best interest of the community will be substantially
served by the issuance. If an application is filed for the issuance of a license for a
location, that on the date the application is filed has a valid license of the same series
issued at that location, there shall be a rebuttable presumption that the public
convenience and best interest of the community at that location was established at the
time the location was previously licensed. The presumption shall not apply once the
licensed location has not been in use for more than 180 days.

Other Active Liquor License Interest in Arizona
This applicant does not hold an interest in any other active liquor license in the State of


Page 69

Arizona.

Public Opinion
No protest or support letters were received within the 20-day public comment period.

Applicant’s Statement
The applicant submitted the following statement in support of this application. Spelling,
grammar and punctuation in the statement are shown exactly as written by the
applicant on the City Questionnaire.

I have the capability, reliability and qualifications to hold a liquor license because:
“I Amanda consider myself a very responsible, honest person with good moral
standings, and I believe that I have the ability to handle a liquor license.”

The public convenience requires and the best interest of the community will be
substantially served by the issuance of the liquor license because:
“They will have more options for alcoholic beverage with their meals.”

Staff Recommendation
Staff recommends disapproval of this application based on a Police Department
recommendation for disapproval. The Police Department disapproval is based on
possible hidden ownership concerns, falsifying information on both City and State
questionnaires, and concerns associated with financing of the business. The applicant
has not demonstrated the capability, qualifications and reliability to hold and control a
liquor license.

Attachments
Liquor License Data - El Pueblo Restaurant
Liquor License Map - El Pueblo Restaurant
Liquor License Police Department Recommendation - El Pueblo Restaurant

Responsible Department
This item is submitted by Deputy City Manager Toni Maccarone and the City Clerk
Department.




Page 70
Liquor License Data: EL PUEBLO RESTAURANT
Liquor License

Description Series 1 Mile 1/2 Mile

Bar 6 1 0

Beer and Wine Bar 7 1 1

Liquor Store 9 3 2

Beer and Wine Store 10 4 1

Restaurant 12 17 11


Crime Data

Description Average * 1 Mile Average ** 1/2 Mile Average***

Property Crimes 42.36 181.15 278.76

Violent Crimes 7.67 26.56 25.47

*Citywide average per square mile **Average per square mile within 1 mile radius ***Average per square mile within ½ mile radius



Property Violation Data
Description Average 1/2 Mile Average

Parcels w/Violations 60 87

Total Violations 100 143


Census 2010 Data 1/2 Mile Radius
BlockGroup 2010 Population Owner Occupied Residential Vacancy Persons in Poverty

1125033 1448 67 % 6% 8%

1125034 1913 70 % 12 % 32 %

1125091 1905 0% 15 % 22 %

1125092 1564 47 % 23 % 9%

1125093 2841 0% 14 % 49 %

Average 61 % 13 % 19 %




Page 71
Liquor License Map: EL PUEBLO RESTAURANT
2270 N 75TH AVE




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Page 75




PAYMENT ORDINANCE (Ordinance S-47292) (Items 14-25)
Ordinance S-47292 is a request to authorize the City Controller to
disburse funds, up to amounts indicated below, for the purpose of
paying vendors, contractors, claimants and others, and providing
additional payment authority under certain existing city contracts. This
section also requests continuing payment authority, up to amounts
indicated below, for the following contracts, contract extensions and/or
bids awarded. As indicated below, some items below require payment
pursuant to Phoenix City Code Section 42-13.

14 American Association of Airport Executives
For $59,375.00 in payment authority for 2021 American Association of
Airport Executives (AAAE) Federal Affairs membership dues for the
Aviation Department. The AAAE advocates on behalf of airports and
works to prevent shifting of costs and federal responsibilities to airports,
ensuring that unfunded mandates are not imposed. It is the primary
interface with elected officials and regulatory agencies on issues affecting
airports across the country. AAAE provides important information, alerts,
updates and insight on legislation and proposed regulations, security
policy, and congressional hearing reports.

15 PFM Financial Advisors, LLC
For $75,000.00 in payment authority for a new contract, entered on or
about Feb. 20, 2021 for a term of five years for the Finance Department.
The contract will provide financial advisory services to the Public Transit
and Street Transportation departments for work related to the
development and maintenance of long-term financial planning models
necessary for future financings. The vendor was selected from the City of
Phoenix Financial Advisor Qualified Vendor List established through
RFQ-2017FIN-003.




Page 76

16 Settlement of Claim(s) Lucero v. City of Phoenix
To make payment of up to $36,000.00 in settlement of claim(s) in Lucero
v. City of Phoenix, CV2019-010686, 18-0727-002, AU, BI, for the
Finance Department pursuant to Phoenix City Code chapter 42. This is a
settlement of a bodily injury claim arising from a motor vehicle accident on
July 16, 2018 involving the Police Department.

17 Settlement of Claim(s) Mason v. City of Phoenix
To make payment of up to $100,000.00 in settlement of claim(s) in
Mason v. City of Phoenix, CV2020-053869, 19-0823-001, GL, BI, for the
Finance Department pursuant to Phoenix City Code chapter 42. This is a
settlement of a bodily injury claim arising from a non-vehicular accident
that occurred on Aug. 28, 2019.

18 Settlement of Claim(s) Garcia v. City of Phoenix
To make payment of up to $60,000.00 in settlement of claim(s) in Garcia
v. City of Phoenix, CV2019-002195, 18-0246-001, GL, BI, for the
Finance Department pursuant to Phoenix City Code chapter 42. This is a
settlement of a bodily injury claim arising from a non-vehicular accident
that occurred on March 10, 2018.

19 Settlement of Claim(s) Hinds v. City of Phoenix
To make payment of up to $40,000.00 in settlement of claim(s) Hinds v.
Department pursuant to Phoenix City Code chapter 42. This is a
settlement of a bodily injury claim arising from a motor vehicle accident on
Sept. 22, 2018, involving the Police Department.

20 Settlement of Claim(s) Foster v. City of Phoenix
To make payment up to $52,500.00 in settlement of claim(s) in Foster v.
Department pursuant to Phoenix City Code chapter 42. This is a
settlement of a bodily injury claim arising from a motor vehicle accident on
Oct. 12, 2019, involving the Police Department.

21 Settlement of Claim(s) Yakoo v. City of Phoenix
To make payment of up to $43,550.00 in settlement of claim(s) in Yakoo
v. City of Phoenix, 20-0080-001, GL, PD, for the Finance Department


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pursuant to Phoenix City Code chapter 42. This is a settlement for a
property damage claim arising from a sewer backup on July 14, 2020.

22 Arizona State University
For $65,000.00 in payment authority for Contract 119092 for the annual
operating and maintenance fees for the Downtown Phoenix Civic Space
A.E. England Building, which is paid to Arizona Board of Regents on
behalf of Arizona State University, for the Parks and Recreation
Department.

23 Arizona Generator Technology, Inc., doing business as
Gen-Tech
For $13,195.41 in payment authority to repair a failed generator located at
the Fire Academy, for the Public Works Department. The generator
provides backup power to the training facility for emergency response
teams, including safety training. The generator was diagnosed with
needing a new electronic control module. The part can only be purchased,
replaced, and calibrated by Arizona Generator Technology, the original
equipment manufacturer in the area.

24 Ferguson US Holdings Inc., doing business as
Ferguson Enterprises, LLC.
For $58,230.00 in payment authority for a one-time purchase of three
Quick View Pole Cameras for the Water Services Department (WSD).
The equipment will allow WSD staff to inspect sanitary sewer structures
including manholes, vaults, wet wells and other confined space structures
safely throughout the City by removing staff from the potential exposure to
hazardous gasses. The equipment will also allow staff to quickly and
efficiently collect videos and pictures of the structures which can be used
for rehabilitation or repair.

25 Central Arizona Water Conservation District doing
business as Central Arizona Project
For $26,993.00 in payment authority for a land use license necessary for
the ongoing right to use Central Arizona Project land and maintain three
underground sewer lines along Cave Creek Road for the five-year term of
2016-2021 for the Water Services Department.



Page 78



Report

***REQUEST TO WITHDRAW (SEE ATTACHED MEMO)*** (CONTINUED FROM
FEB. 3, 2021) - 2015-2020 Consolidated Plan's 2019 Annual Action Plan CARES
Act Amendment (Ordinance S-47290)

Request City Council approval of a Substantial Amendment to the 2015-2020
Consolidated Plan's 2019-2020 Annual Action Plan to include a second Emergency
Solutions Grant (ESG-CV2) allocation authorized by the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act), Public Law 116-136, enacted March 27, 2020, for
the specific purpose of preventing, preparing for, and responding to the Coronavirus
(COVID-19) public health crisis. Further request authorization for the City Treasurer to
accept and the City Controller to disburse all funds related to this item.

Summary
The 2015-2020 Consolidated Plan's 2019 Annual Action Plan defines how the City's
Community Development Block Grant (CDBG), HOME Investment Partnership
(HOME), Emergency Solutions Grant (ESG), and Housing Opportunities for Persons
with AIDS (HOPWA) funds will be used to address the priorities and goals outlined in
the five-year Consolidated Plan.

A previous substantial amendment to the 2019 Annual Action Plan was completed for
the first round of the CARES Act ESG funding in May of 2020 (ESG-CV1). This second
substantial amendment is to allocate $19,212,248 provided to the City in the second
round of ESG funding (ESG-CV2) authorized by the CARES Act to support the City's
effort to prevent, prepare for, and respond to the COVID-19 pandemic.

The following summarizes the second ESG-CV2 allocation and the proposed activities
that will be funded to address the growing effects of the public health crisis:

ESG-CV2: $19,212,248
$19,212,248 will be used to prevent, prepare for, and respond to the COVID-19
pandemic, focusing on individuals and families who are experiencing homelessness or
receiving homeless assistance, and to support homelessness prevention activities to
mitigate the impacts of COVID-19. The following eligible activities will be funded with
this allocation:



Page 79

· Street Outreach: $1,922,285 will be used to fund essential services necessary to
reach out to unsheltered homeless individuals and families and connect them with
emergency shelter, housing or other critical services.

· Emergency Shelter: $4,253,669 will be used to extend temporary shelter to
vulnerable individuals who are receiving homeless assistance.

· Homelessness/Eviction Prevention: $3,192,259 will be used to support additional
homelessness prevention activities.

· Rapid Re-Housing: $7,922,810 will be used to support additional homelessness
assistance activities.

· Administration, Planning and Coordination: $1,921,225 will be used for the
purposes of program administration, planning and coordination.

Further City Council action will be required to enter into any new contracts, or to
modify any existing contracts, with service providers for services funded under these
eligible activities. If any additional federal funds are provided, a subsequent substantial
amendment will be brought to council for approval.

Procurement Information
Services may be procured, as needed, by utilizing procurement practices in
accordance with Administrative Regulation 3.10 to implement and administer U.S.
Department of Housing and Urban Development (HUD) funded programs intended to
prevent, prepare for, and respond to the COVID-19 pandemic.

Financial Impact
These activities are funded by the U.S. Department of Housing and Urban
Development through the Coronavirus Aid, and Economic Security Act (CARES) Act.
There is no impact to the General Fund.

Concurrence/Previous Council Action
On May 6, 2020, City Council authorized a Substantial Amendment to the 2015-2020
Consolidated Plan's 2019-2020 Annual Action Plan to include the first release of
allocations and waivers authorized by the CARES Act.

On Jan. 21, 2021, the Land Use and Livability Subcommittee recommended City
Council approval of this item.



Page 80


Public Outreach
As part of the CARES Act, HUD approved an expedited public outreach process that
allows the flexibility to institute more streamlined requirements to address immediate
needs regarding to the Coronavirus. The HUD process includes the following:

· The reduction of the 30-day public comment period and the implementation of a
public comment period of no less than five days in an effort to expedite the
Consolidated Plan Substantial Amendment process and allow the City to respond
as quickly as possible to the immediate needs in the community.

· The elimination of in-person public hearings and the implementation of virtual public
hearings when 1) national and/or local health authorities recommend social
distancing and limiting public gatherings for public health reasons, and 2) virtual
hearing provide reasonable notification and access for citizens in accordance with
Phoenix's certifications, timely responses from local officials and to all citizen
questions and issues, and public access to all questions and responses.

The comment period for this substantial amendment was open from Jan. 18 to Jan. 22,
2021. The virtual public hearing took place on Jan. 22, 2021.

Responsible Department
This item is submitted by Deputy City Manager Inger Erickson and the Neighborhood
Services and Human Services Departments.




Page 81

To: Inger Erickson Date: February 10, 2021
Deputy City Manager

From: Spencer J. Sel �
Neighborhood es Director

Subject: WITHDRAW ITEM #26 ON THE FEBRUARY 17, 2021 FORMAL
AGENDA REGARDING THE 2015-2020 CONSOLIDATED PLAN'S
2019 ANNUAL ACTION PLAN CARES ACT AMENDMENT.


This memo requests that Item#26 regarding the 2015-2020 Consolidated Plan's
Annual Action Plan CARES Act Amendment be withdrawn from the February 17,
2021 Formal Agenda. This continued item will be replaced with a new item that
also addresses the City's second round of CARES Act Community Development
Block Grant funds.
L

Approved: L
��
Inger Erickson, Deputy City Manager




Page 82



Report

2015-2020 Consolidated Plan's 2019 Annual Action Plan CARES Act Amendment
(Ordinance S-47330)

Request City Council approval of a Substantial Amendment to the 2015-2020
Consolidated Plan's 2019-2020 Annual Action Plan to include a second Emergency
Solutions Grant (ESG-CV2) and Community Development Block Grant (CDBG-CV2)
allocations, and to amend the first round of Community Development Block Grant
(CDBG-CV1) authorized by the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act), Public Law 116-136, enacted March 27, 2020, for the specific purpose of
preventing, preparing for, and responding to the Coronavirus (COVID-19) public health
crisis. Further request authorization for the City Treasurer to accept and the City
Controller to disburse all funds related to this item.

Summary
The 2015-2020 Consolidated Plan's 2019 Annual Action Plan defines how the City's
Community Development Block Grant (CDBG), HOME Investment Partnership
(HOME), Emergency Solutions Grant (ESG), and Housing Opportunities for Persons
with AIDS (HOPWA) funds will be used to address the priorities and goals outlined in
the five-year Consolidated Plan.

A previous substantial amendment to the 2019 Annual Action Plan was completed for
the first round of the CARES Act ESG and CDBG funding in May of 2020 (ESG-CV1
and CDBG-CV1). This second substantial amendment is to allocate $19,212,248 of
ESG funds (ESG-CV2) and $14,096,369 of CDBG funds (CDBG-CV2) provided to the
City in the second round of funding authorized by the CARES Act, and to amend the
first allocation of CDBG-CV1 to support the City's effort to prevent, prepare for, and
respond to the COVID-19 pandemic.

The following summarizes the ESG-CV2 and CDBG-CV2 allocations and the proposed
activities that will be funded to address the growing effects of the public health crisis:

ESG-CV2: $19,212,248
$19,212,248 will be used to prevent, prepare for, and respond to the COVID-19
pandemic, focusing on individuals and families who are experiencing homelessness or
receiving homeless assistance, and to support homelessness prevention activities to


Page 83

mitigate the impacts of COVID-19.

The following eligible activities will be funded with this allocation:
· $2,973,199 will be used to expand the beds at Project Haven shelter.
· $2,303,165 will be used to expand Rapid Rehousing for women and families.
· $1,800,000 will be used to expand Rapid Rehousing for men.
· $600,000 will be used for operational costs at the new US Vets shelter.

Additionally, $11,535,884 will be used to fund homeless support in an effort to prevent,
prepare for, and respond to the Coronavirus pandemic amongst individuals and
families who are homeless or receiving homeless assistance; and to support additional
homeless assistance and homeless prevention activities to mitigate the impacts of
COVID-19 as directed by City Council.

CDBG-CV2: $14,096,369
$11,277,095 will be used to fund homeless support in an effort to prevent, prepare for,
and respond to the Coronavirus pandemic amongst individuals and families who are
homeless, receiving homeless assistance; and to support additional homeless
assistance and homeless prevention activities to mitigate the impacts of COVID-19.
Homeless support activities may include public services, public facility improvements,
or strategic acquisition of properties in an effort to address community needs related to
homelessness in response to the national pandemic.

$2,819,274 will be used for the purpose of program administration, planning and
coordination as it relates to the CDBG-CV allocations.

Additionally, $298,445 of uncommitted funds from the first round of CDBG funding will
be added to the $4 million of CDBG-CV1 funds allocated by City Council to fund
homeless support activities.

The aforementioned allocations, as summarized in Attachment A, would allow for
$27,111,423 of ESG-CV2, CDBG-CV1 and CDBG-CV2 funds to be available to fund
homeless support activities to prevent, prepare for, and respond to the Coronavirus
pandemic in one of the City's most vulnerable populations through the following:
· $3 million for Human Services Campus operations and/or facility improvements
support.
· $15 million for RFP(s) to fund facility acquisition and/or improvement of up to four
shelters.
· $9.1 million for RFP(s) to support homeless services providers.



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Further City Council action will be required to enter into any new contracts, or to
modify any existing contracts, with service providers for services funded under these
eligible activities. If any additional federal funds are provided, a subsequent substantial
amendment will be brought to Council for approval.

Procurement Information
Services may be procured, as needed, by utilizing procurement practices in
accordance with Administrative Regulation 3.10 to implement and administer U.S.
Department of Housing and Urban Development (HUD) funded programs intended to
prevent, prepare for, and respond to the COVID-19 pandemic.

Financial Impact
These activities are funded by the HUD through the CARES Act. There is no impact to
the General Fund.

Concurrence/Previous Council Action
On May 6, 2020, City Council authorized a Substantial Amendment to the 2015-2020
Consolidated Plan's 2019-2020 Annual Action Plan to include the first release of
allocations and waivers authorized by the CARES Act.

On Jan. 21, 2021, the Land Use and Livability Subcommittee recommended City
Council approval of broad allocations of ESG-CV2 allocations to prevent, prepare for,
and respond to the COVID-19 pandemic, focusing on individuals and families who are
experiencing homelessness or receiving homeless assistance, and to support
homelessness prevention activities to mitigate the impacts of COVID-19.

Public Outreach
As part of the CARES Act, HUD approved an expedited public outreach process that
allows the flexibility to institute more streamlined requirements to address immediate
needs regarding the Coronavirus. The HUD process includes the following:

· The reduction of the 30-day public comment period and the implementation of a
public comment period of no less than five days in an effort to expedite the
Consolidated Plan Substantial Amendment process and allow the City to respond
as quickly as possible to the immediate needs in the community.

· The elimination of in-person public hearings and the implementation of virtual public
hearings when 1) national and/or local health authorities recommend social
distancing and limiting public gatherings for public health reasons, and 2) virtual


Page 85

hearings provide reasonable notification and access for citizens in accordance with
Phoenix's certifications, timely responses from local officials and to all citizen
questions and issues, and public access to all questions and responses.

The comment period for this substantial amendment will be advertised for two weeks
and open for five days. Additionally, a virtual public hearing will be hosted to receive
comment from the public prior to finalization and submission to HUD.

Responsible Department
This item is submitted by Deputy City Manager Inger Erickson and the Neighborhood
Services and Human Services departments.




Page 86
ATTACHMENT A:
CARES Act CDBG and ESG $27,111,423 Summary


Total ESG-CV and CDBG-CV Funding (both rounds) $48,105,259

Total Otherwise Committed/Expended $20,993,836

Total Remaining One-Time Funds Available $27,111,423


Summary:
A total of two rounds of CDBG and ESG allocations were provided to the City of
Phoenix in CARES Act funding. On May 6, 2020, City Council gave direction to staff for
the first-round allocations.

Item 27 from February 3 formal meeting requested to allocate the second round of ESG
funds for general categories and then staff would come back with specifics at a later
date. This item was continued to the February 17 meeting, has been requested to be
withdrawn, and has been replaced with this new item.

This new item for February 17 formal incudes the complete package of round two ESG
($19,212,248) and CDBG ($14,096,369) for a substantial amendment to the annual
action plan, as required by HUD, and reallocate a portion of unspent CDBG round one
funds ($4,298,445). After previous allocations and other commitments mentioned in the
Council Report, $27,111,423 is proposed to be used in the manner outlined below.


Proposed Allocation of $27,111,423 Identified in the Council Item:
 $3M - Human Services Campus operations and/or facility improvement support

 $15M - RFP(s) to fund facility acquisition and/or improvement of up to four
shelters

 $9.1M – RFP to support for homeless services providers




Page 87



Report

Public Hearing and Authorizing Amendment to Chapter 14 of the Phoenix City
Code Relating to Taxes (Ordinance G-6808)

Request to hold a public hearing on the request for the following item to authorize an
amendment to Chapter 14 of the Phoenix City Code. An ordinance authorizing the City
Manager, or his designee, to amend Chapter 14 of the Phoenix City Code, where the
model city tax code is maintained, with corresponding statutory model city tax code
amendments approved in 2018 and 2019 by the Municipal Tax Code Commission
(MTCC), which was established by the State Legislature to review and approve all
changes to the local model city tax code. The 2018 and 2019 conforming amendments
align the model city tax code with state statutes. Arizona Revised Statute § 42-6052
(H) requires that the governing bodies of all cities and towns adopt the changes to the
model city tax code adopted by the commission and therefore, the City of Phoenix
must adopt these changes to bring Chapter 14 of the Phoenix City Code into
conformance with State statutes accordingly.

Summary
The Model City Tax Code, adopted in 1987, was a coordinated effort on the part of
Arizona cities to achieve uniformity in tax administration. Consequently, statutory
changes made by the Arizona Legislature during its regular sessions between years
2014 and 2018 required that equivalent changes be incorporated in the local model
city tax code (Attachments A and B). These changes were prepared by the League
of Arizona Cities and Towns in consultation with representatives from Arizona cities,
approved by the business community, and presented before the MTCC. The MTCC
held public hearings and approved adoption of the proposed amendments on Dec. 14,
2018; Feb. 22, 2019; and May 31, 2019. The delay in obtaining MTCC adoption was
due to the need to await final determination of evolving State Transaction Privilege Tax
(TPT) Simplification administrative issues that were clarified through subsequent State
legislature session actions, collaborative deliberation and concurrence with the
business community on complex construction contracting tax issues that required
multiple State legislature session actions to clarify legislative intent, and challenges in
securing the required quorum of 10 non-compensated appointive members, each
restricted to a 3-year term limit, to serve on the commission.




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Financial Impact
Arizona cities and towns must comply with statutory changes recommended for
incorporation into the model city tax code when approved for adoption by the MTCC
and because the City of Phoenix has been in compliance since then, no fiscal impacts
from City Transaction Privilege Tax revenues - neither increases nor decreases - are
expected to arise from these recommended changes.

Concurrence/Previous Council Action
Due to the need to maintain uniformity with State statutes and the approval of the
business community, City staff recommends that the City Council adopt the proposed
2018 and 2019 amendments already approved by the Municipal Tax Code
Commission.

Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance Department.




Page 89
ATTACHMENT A

This document details the various changes incorporated into the local version of the
Model City Tax Code approved by the Municipal Tax Code Commission in public
hearings held in the years 2018 and 2019. These changes are summarized below by
Ordinance Section number, identifying the bills that initiated them, and the statutory
effective dates per item.

The amendments titled “2014-2018 Legislative Actions Amendment” incorporates
several changes to the local version of the Model City Tax Code that relate to statutory
changes made by the legislature during its regular sessions between years 2014 and
2018. These amendments were approved by the Municipal Tax Code Commission in a
public hearing held on Friday, December 14th, 2018.

2014-2018 Legislative Actions Amendments
Section I: Amends Sec. 14-110, Definitions: Income-producing capital equipment.

Legislation (Year: Bill Numbers) – 2015: SB1446; 2016: HB2133, HB2533; 2017:
SB1416

The definition of “income producing capital equipment” is expanded by these four bills.
First, two clauses are amended to ensure that contractors performing maintenance,
repair, replacement, and alteration (MRRA) jobs can purchase otherwise exempt
machinery and equipment for projects involving telecommunications, effective January
1, 2015 (SB1446). Second, add agricultural aircraft such as crop dusters to the list of
exempt farm machinery and equipment, effective retroactively from April 17, 1985
(HB2133). Third, the subsection related to aircraft, navigational and communication
instruments and accessories is expanded to include charter planes, helicopters, and
other air tour operators who are exempt from holding a Federal certificate of public
convenience, effective retroactively from June 1, 1998 (HB2533). Finally, aircraft
exemptions for common carriers are amended to include fractional ownership
scenarios, effective January 1, 2018 (SB1416).


Legislative Bills 2014 - 2018

Effective A.R.S. Section PCC Section
Year Chapter Bill # Date 42-XXXX 14-XXXX Description
Building permit
requirements; create liability
for Retail equivalent on
MRRA used in Prime; clarify
Retail exemptions for
9-467 6004/ Contractors/MRRA; revises
5005/5008.1/5009/ 110/415/415.1/ MRRA to limit "alteration",
2015 4 SB1446 1/1/2015 5010/5061/5075/5159 465/660 etc.
Adds agricultural aircraft
(crop dusters) to exempt
2016 181 HB2133 4/17/1985 5061/5159 110 farm equipment




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Expands airline exemptions
for charter
aircraft/helicopters by adding
carriers exempt from having
a certificate of public
2016 367 HB2533 6/1/1998 5009/5061/5159 110 convenience
Adds fractional jet ownership
to common carrier
2017 340 SB1416 1/1/2018 5061/5159 110 exemptions


Section II: Amends Sec. 14-410, Amusements, exhibitions, and similar activities.

Legislation (Year: Bill Numbers) – 2016: HB2674; 2018: SB1120

The Amusements classification is amended to add an exemption for a charity run, walk,
swim, bike ride or similar event operated by a 501(c)(3) non-profit organization, effective
August 6, 2016 (HB2674). Also, this section adds the exemption for events operated by
groups associated with Major League Baseball or a professional golf tour and edits the
language to limit application of the exemption for groups owned or controlled by a Major
League team, MLB, or a pro golf tour unless they operated such events before 2018,
effective from and after January 1, 2018 (SB1120). Additionally, a long-standing policy
by those cities and towns that have adopted Local Option #H exempting one-on-one
instruction or training as a personal service is added to the code for improved clarity.
Under Local Option #H, instruction charges for health-related activities are included in
the gross receipts subject to tax. Cities have long held that this applies to group
instruction, but does not apply to individual instruction, such as personal training and
other situations wherein the customer hires the provider for singular attention for a
period of time. This addition codifies this policy and practice, effective January 1, 2019.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Exempts entry fees from non-profit
2016 373 HB2674 8/6/2016 5073 410 charity races

6004/5061/5069/ 410/445/455/ Edits the exemption for MLB & pro
2018 249 SB1120 1/1/2018 5073/5074/5159 465/660 golf events


Section III: Amends Sec. 14-415, Construction contracting: construction
contractors.

Legislation (Year: Bill Numbers) – 2014: HB2389, HB2415; 2015: SB1446; 2018:
SB1409

As an element of the TPT Simplification bill in 2013 (HB2111), the Construction
Contracting classification was modified to remove most maintenance and repair
contractors from the classification, allowing them to pay tax to the vendor on the
materials used in their jobs, and eliminating all other tax liability for their construction
activity. Subsequent sessions included three attempts to refine the concept and rules



Page 91
surrounding the taxation of materials only for “Maintenance, Repair, Replacement, and
Alteration” (MRRA) projects. The changes in this section are an amalgamation of the
original language in HB2111 and the three subsequent bills (HB2389, SB1446, and
SB1409), arriving at conformity with the current version of Contracting at the State level
in A.R.S. 42-5075. The changes related to HB2389 and SB 1446 are effective January
1, 2015. The most recent amendment (SB1409) which added an exclusion for
contractors who qualify for the “handyman” exemption from R.O.C. licensing, and also
simplified the definition of “Alteration” on commercial projects is effective as of January
1, 2019 (the prior definition of “Alteration” applies to jobs where the contract was
entered into before January 1, 2019). In addition, a new exemption for construction of a
mixed waste processing facility was also added and is effective retroactively from
January 1, 2013 (HB2415).


Legislative Bills 2014 - 2018

Effectiv ARS Section PCC Section
Year Chapter Bill # e date 42-XXXX 14-XXXX Description
TPT Simplification clean-up -
municipal licenses/penalties;
MRRA exemption certificate;
electronic filing; exempt SNAP
under R&B; create MRRA; SNAP
under Food; transition
IGA/electronic reporting; city
6001/6002/ Admin (Art. V) under state rules;
6004/6009/6056/ initial MRRA preemption; MTHO
1125/2003/2075/ end date; Session Law: refunds,
5005/5009/5014/ Article III/ appeals, license renewal; has
HB238 1/1/201 5015/5074/ 415/455/462/ multiple effective dates, only
2014 263 9 5 5075/5102 530 1/1/2015 matters
1/1/201
5 MRRA edits; 1/1/2015
HB241 1/1/201 Exempt mixed waste processing
2014 228 5 3 5075 415 facility 1/1/2013
Building permit requirements;
create liability for Retail equivalent
9-467 6004/ on MRRA used in Prime; clarify
5005/5008.1/5009/ 110/415/415. Retail exemptions for
SB144 1/1/201 5010/5061/5075/51 1/ Contractors/MRRA; revises MRRA
2015 4 6 5 59 465/660 to limit "alteration", etc.
SB140 1/1/201 Adds ROC Handyman exclusion
2018 341 9 9 6004/5075 415 to 415; simplifies "alteration"


Section IV: Adds Sec. 14-415.1, Liability for MRRA amounts equal to Retail
transaction privilege tax due.

Legislation (Year: Bill Numbers) – 2015: SB1446

A component of the primary amendment addressing the taxation of materials only for
“Maintenance, Repair, Replacement, and Alteration” (MRRA) projects was creating a
mechanism for hybrid contractors (those who perform both regular Contracting jobs and
also perform MRRA jobs) to efficiently purchase materials that could be used in either




Page 92
job type without having to maintain two separate inventories. The solution was to allow
these hybrid contractors to purchase all materials tax exempt, as if they would be used
in traditional prime contracting jobs but allow them to pay tax on the “materials only” if
they were used in a MRRA job. At the State level, A.R.S. 42-5008.1 was created. This
required anyone who used materials purchased without tax to pay the equivalent of the
Retail tax rate based on the job site for any such materials used in a MRAA job. New
Section 415.1 mirrors this section of State law to apply the same principle relative to the
local tax. The section is added effective January 1, 2015 to coincide with the effective
date of A.R.S. 42-5008.1 (SB1446).


Legislative Bills 2014 - 2018

Effective ARS Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Building permit
requirements; create liability
for Retail equivalent on
MRRA used in Prime; clarify
Retail exemptions for
9-467 6004/ Contractors/MRRA; revises
5005/5008.1/5009/ 110/415/415.1/ MRRA to limit "alteration",
2015 4 SB1446 1/1/2015 5010/5061/5075/5159 465/660 etc.


Section V: Amends Sec. 14-422, Jet fuel sales.

Legislation (Year: Bill Numbers) – 2017: HB2064

This section adds the new exemption for Jet Fuel sales, limiting the tax imposition to
only the first 10 million gallons sold to any individual purchaser during a calendar year.
The same limitation also applies to purchases subject to Jet Fuel Use Tax and appears
in Section XV, amending Section 660 of the code. Additionally, new language is added
restricting the use of funds collected from this classification to being dedicated to
support the local airport or airport system in accordance with FAA rules. Both changes
are effective as of December 1, 2017.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Exempts Jet Fuel over 10 million
gallons;
requires tax collected to be spent on
2017 50 HB2064 12/1/2017 6014 422/660 airport operations




Page 93
Section VI: Amends Sec. 14-445, Rental, leasing, and licensing for use of real
property.

Legislation (Year: Bill Numbers) – 2015: 2147; 2018: SB1120

This section adds cable operators to utility and telecommunication companies who can
exempt charges for joint pole usage to others in the same line of business, mirroring a
similar new exemption for all three industries in State statute, effective August 1, 2015.
This section also adds the exemption for events operated by groups associated with
Major League Baseball or a professional golf tour, including the new edits to limit the
application of the exemption for groups owned or controlled by a Major League team,
MLB, or a pro golf tour unless they operated such events before 2018, effective from
and after January 1, 2018.


Legislative Bills 2014 - 2018
PCC
Effectiv ARS Section Section 14-
Year Chapter Bill # e date 42-XXXX XXXX Description
6004/5061/5069 410/450/445
SB112 1/1/201 / / Edits the exemption for MLB & pro golf
2018 249 0 8 5073/5074/5159 455/465/660 events


Section VII: Amends Sec. 14-450, Rental, leasing, and licensing for use of tangible
personal property.

Legislation (Year: Bill Numbers) – 2015: HB2147

This section adds cable operators to utility and telecommunication companies who can
exempt charges for joint pole usage to others in the same line of business, mirroring a
similar new exemption for all three industries in State statute, effective August 1, 2015.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Adds cable operators to exemption for
joint pole usage; 8/1/2015, edits
8/1/2015 6004/5063/5064/ definition of "replacement" under
2015 72 HB2147 1/1/2015 5069/5071/5075 450 Contracting - 1/1/2015



Section VIII: Amends Sec. 14-455, Restaurants and Bars.

Legislation (Year: Bill Numbers) – 2014: HB2389; 2018: HB2484, SB1120

First, this section adds the exemption for prepared food and beverages sold to eligible
seniors, homeless, or disabled persons using SNAP benefits, effective January 1, 2015
(HB2389). Second, this section adds the exemption for restaurant sales at events




Page 94
operated by groups associated with Major League Baseball or a professional golf tour,
including the new edits to limit the application of the exemption for groups owned or
controlled by a Major League team, MLB, or a pro golf tour unless they operated such
events before 2018, effective from and after January 1, 2018 (SB1120). Third, this
section adds a restriction prohibiting cities and towns from imposing a discriminatory tax
on any particular food or beverage item (i.e., no “soda” tax), effective August 3, 2018
(HB2484).


Legislative Bills 2014 - 2018

Effective ARS Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
TPT Simplification clean-
up - municipal
licenses/penalties; MRRA
exemption certificate;
electronic filing; exempt
SNAP under R&B; create
MRRA; SNAP under
Food; transition
IGA/electronic reporting;
city Admin (Art. V) under
state rules; initial MRRA
preemption; MTHO end
6001/6002/ date; Session Law:
6004/6009/6056/ refunds, appeals, license
1125/2003/2075/5005/ renewal; has multiple
5009/5014/5015/5074/ Article III/ effective dates, only
2014 263 HB2389 1/1/2015 5075/5102 415/455/462/530 1/1/2015 matters
Moves existing food
preemptions into new
section; prohibits any
differential tax on a
455/462/ specific food (no soda tax
2018 17 HB2484 8/3/2018 6004/6015 465/660 allowed)
6004/5061/5069/ 410/445/ Edits the exemption for
2018 249 SB1120 1/1/2018 5073/5074/5159 455/465/660 MLB & pro golf events


Section IX: Amends Sec. 14-462, Retail sales: food for home consumption.

Legislation (Year: Bill Numbers) – 2014: HB2389; 2018: HB2484

This section adds the exemption for prepared food and beverages sold to eligible
seniors, homeless, or disabled persons using SNAP benefits, effective January 1, 2015
(HB2389). Additionally, this section adds a restriction prohibiting cities and towns from
imposing a discriminatory tax on any particular food or beverage item (i.e., no “soda”
tax), effective August 3, 2018 (HB2484).




Page 95
Legislative Bills 2014 - 2018

Effective ARS Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
TPT Simplification clean-
up - municipal
licenses/penalties; MRRA
exemption certificate;
electronic filing; exempt
SNAP under R&B; create
MRRA; SNAP under
Food; transition
IGA/electronic reporting;
city Admin (Art. V) under
state rules; initial MRRA
preemption; MTHO end
date; Session Law:
6001/6002/ refunds, appeals, license
6004/6009/6056/ renewal;
1125/2003/2075/5005/ has multiple effective
5009/5014/5015/5074/ Article III/ dates, only 1/1/2015
2014 263 HB2389 1/1/2015 5075/5102 415/455/462/530 matters
Moves existing food
preemptions into new
section; prohibits any
differential tax on a
455/462/ specific food (no soda tax
2018 17 HB2484 8/3/2018 6004/6015 465/660 allowed)


Section X: Amends Sec. 14-465, Retail sales: exemptions.

Legislation (Year: Bill Numbers) – 2014: HB2285; 2015: SB1446; 2016: HB2326,
HB2536, HB2584; 2018: HB2484, SB1120

There were multiple changes to the exemptions from the Retail classification added or
amended by the legislature, listed here in order of year enacted and bill number,
followed by effective date and the subsection impacted.
1) 2014, HB2285: Added an exemption for the transfer of coal back and forth between
a power plant and a coal refinery under certain circumstances, effective January 1,
2015; Subsection (ss).
2) 2015, SB1446: Added persons possessing a “MRRA” exemption certificate to the
current exemption for sales of construction materials to a contractor, effective
January 1, 2015; Subsection (k).
3) 2016, HB2326: Added farmers who produce animal feed to the statutory definition of
“Food Producer” thus making their sales exempt from tax when selling directly to
other farmers to feed their livestock, to other animal owners, or to livestock boarding
facilities, effective August 6, 2016; Subsection (v).
4) 2016, HB2536: Created new Local Option #QQ, allowing the exemption of fine art
sold by an auction house to a non-resident if shipped out-of-state, available for
selection with an effective date any time from and after September 1, 2016 to match
the effective date of the similar State exemption; Subsection (tt).




Page 96
5) 2016, HB2584: Edited the requirements to qualify for the exemption of data center
equipment that qualifies for tax relief offered by the Arizona Commerce Authority,
effective retroactively from September 12, 2013; Subsection (uu).
6) 2018, HB2484: Added exemptions for the sale, manufacture or distribution among
wholesalers of food for human consumption, as well any container or packaging
used exclusively for transporting, protecting or consuming food items intended for
human consumption (as part of the preemption against a “soda” tax), effective
August 3, 2018; Subsections (vv) and (ww).
7) 2018, SB1120: Added the exemption for retail sales at events operated by groups
associated with Major League Baseball or a professional golf tour, including the new
edits to limit the application of the exemption for groups owned or controlled by a
Major League team, MLB, or a pro golf tour unless they operated such events before
2018, effective from and after January 1, 2018; Subsection (y).
Note that a conditional exemption for all sales of coal has not been included at this time,
as the required conditions for enactment have not been met (2018, HB2003).


Legislative Bills 2014 - 2018

Effective ARS Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Exempt coal transfers
6004/5061/5072/ between the mine and
2014 54 HB2285 1/1/2015 5151/5159 465/660 refiner
Building permit
requirements; create liability
for Retail equivalent on
MRRA used in Prime; clarify
Retail exemptions for
9-467 6004/ Contractors/MRRA; revises
5005/5008.1/5009/ 110/415/415.1/ MRRA to limit "alteration",
2015 4 SB1446 1/1/2015 5010/5061/5075/5159 465/660 etc.
Adds farmers who sell
livestock feed to the
3-561/3-563 definition of "food
2016 361 HB2326 8/6/2016 5009/5022/5061/5159 465/660 producers"
Adds new Option #QQ for
fine art sold by auction to
2016 368 HB2536 9/1/2016 5061 465 non-resident
Edits exemption for data
2016 369 HB2584 9/12/2013 6004/5061/5159 465/660 center equipment
Preemption of tax on sales
of coal - NOT EFFECTIVE
UNLESS the Navajo Nation
sells its generating station
2018 263 HB2003 1/1/2023 6004/2061/5072 465 before 12/31/2022
Moves existing food
preemptions into new
section; prohibits any
455/462/ differential tax on a specific
2018 17 HB2484 8/3/2018 6004/6015 465/660 food (no soda tax allowed)
6004/5061/5069/ 410/445/ Edits the exemption for MLB
2018 249 SB1120 1/1/2018 5073/5074/5159 455/465/660 & pro golf events




Page 97
Section XI: Amends Sec. 14-470, Telecommunication services.

Legislation (Year: Bill Numbers) – 2014: HB2546

This section adds an exemption for alarm monitoring when performed by an in-state
company. Previously, the Arizona Supreme Court ruled that out of state alarm
monitoring was considered exempt interstate telecommunications. This bill placed in-
state monitoring companies on a level playing field with out of state ones. Per this bill,
the change related to in-state monitoring companies is effective from and after January
1, 2015. Based on the court decision, out of state monitoring companies are deemed
exempt at any time.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Exempts alarm monitoring from
2014 174 HB2546 1/1/2015 6004 470 Telecommunications



Section XII: Amends Sec. 14-475, Transporting for hire.

Legislation (Year: Bill Numbers) – 2016: SB1492

This section adds exemptions for “vehicles for hire” services (taxis, livery vehicles, and
limousines), as well as “Transportation Network Company” drivers, as those terms are
defined in A.R.S. Sections 28-9501 and 28-9551. This bill clarifies prior legislation
related to companies such as Uber and Lyft, and attempts to create equal tax treatment
for traditional taxi and limo services. The new exemptions are effective beginning
September 1, 2016.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Exempts "vehicles for hire" (taxis,
livery, and limos) and Transportation
2016 171 SB1492 9/1/2016 6004/5062 475 Network Company drivers (Uber)



Section XIII: Amends Sec. 14-480, Utility services.

Legislation (Year: Bill Numbers) – 2015: HB2670; 2016: HB2025, HB2676, SB1505

Changes to this section are all related to the 2014 State level adoption of an exemption
for electricity or natural gas used in manufacturing or smelting operations (SB1413).
While the cities and towns were not required to adopt this exemption, A.R.S. 42-6012




Page 98
does require each city and town to either tax this area in full or exempt it in the exact
same manner as the State. Therefore, at the municipal level an option to adopt this
exemption was added to the Model City Tax Code as Local Option #PP in 2014,
however, no city or town has ever chosen to adopt it. Changes in this section reflect
subsequent modifications made by the legislature to the State exemption, intended to
maintain the Local Option in conformity with the State version. In 2015, HB2670 added
“international operations centers” (a type of data center) to the eligible types of facilities
that could qualify for the exemption, effective August 1, 2015. In 2016 three bills made
additional changes to the State exemption. First, HB2025 added “liquefied petroleum
gas” to the list of eligible utilities that could be exempted. Second, SB1505 removed a
clause from the original language that specifically stated gas transportation charges
were excluded from the exemption, thus making them included. These two changes are
added with effective dates matching the State effective date of September 1, 2016.
Finally in 2016, HB2676 significantly altered the energy usage and other requirements
necessary for a company to qualify for the exemption, as well as removing authority to
verify the qualification from the DOR. This change is added as of the same date it
applies at the State level: January 1, 2017.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Electricity, natural gas to a
manufacturer exempt; Local
Option #PP
2014 7 SB1413 8/1/2015 6012/5063/5159 480/660 ALREADY ADOPTED
Adds "international operations
center" to Option #PP for
Utilities exemption for
2015 6 HB2670 8/1/2015 6012/5063/5159 480/660 manufacturers
Adds 'liquefied petroleum gas"
2016 359 HB2025 9/1/2016 6012/5063/5159 480/660 to Option #PP
Alters the qualifications, etc. for
2016 374 HB2676 1/1/2017 6012/5009/5063/5159 480/660 Option #PP
Adds gas transportation
2016 357 SB1505 9/1/2016 6012/5063/5159 480/660 charges to Option #PP


Section XIV: Amends Sec. 14-530, When tax due; when delinquent; verification of
return; extensions.

Legislation (Year: Bill Numbers) – 2014: HB2283, HB2288, HB2389

Note that in 2014, HB2389 amended A.R.S. 42-6002(A) to state that, unless the context
otherwise requires, Chapter 1 and Chapter 5, Article 1 of Title 42 governs the
administration of the municipal privilege taxes levied by a city or town, effective from
and after January 1, 2015. The impact of this amendment on the Model City Tax Code
will ultimately lead to the elimination of most of Article V – Administration, along with the
elimination of Appendix I – Modifications to Model City Code for Cities and Towns in the
State Collection System. However, this effective date anticipated the DOR would begin




Page 99
complete TPT administration for all cities and towns not later than January 1, 2015. In
reality, this did not occur with regard to the 15 former self-collecting cities until January
1, 2017. As such, Article V and Appendix I remained in place to govern the ongoing
activities of cities and towns prior to completion of the TPT Simplification project. With
the successful transition to Department administration, the changes necessitated by
HB2389 will be taken up in future modifications to the MCTC. For the moment, the first
two bills noted above have created significant return filing changes that we wish to
reflect in the Model until such time as the complete implementation of HB2389 can be
adopted into the body of the MCTC.

HB2283 changes the filing delinquency date for the Department and for cities by
eliminating the State reliance on postmark dates and changing the city rule of accepting
returns on the last business day. The new rules for both cities and the State deem a tax
return delinquent if it is not received by the State electronically by the last business day
of the month or received by the State by the day before the last business day if filed by
paper. HB2288 increased the minimum filing frequency thresholds to determine when a
taxpayer may file and pay on a less than monthly basis, and HB2389 further amended
this section to require that the combined total tax due from all jurisdictions including
counties and cities/towns must be considered, rather than just the State liability as had
been the previous determinant. The new thresholds call for all taxpayers to file on a
monthly basis unless their total annual tax liability to all jurisdictions is between $8,000
and $2,000, in which case they may choose to file and pay quarterly, or if their annual
tax liability is less than $2,000 they may choose to file and pay annually.


Legislative Bills 2014 - 2018
PCC
Effective ARS Section Section 14-
Year Chapter Bill # date 42-XXXX XXXX Description
Filing is delinquent if not
received by last day
electronically or day before
2014 139 HB2283 1/1/2015 5014 530 last filed by paper
Changes M/Q/A filing
2014 141 HB2288 1/1/2015 5014 530 thresholds
TPT Simplification clean-up -
municipal licenses/penalties;
MRRA exemption certificate;
electronic filing; exempt SNAP
under R&B; create MRRA;
SNAP under Food; transition
IGA/electronic reporting; city
Admin (Art. V) under state
rules; initial MRRA
6001/6002/ preemption; MTHO end date;
6004/6009/6056/ Session Law: refunds,
1125/2003/2075/5005/ Article III/ appeals, license renewal; has
5009/5014/5015/5074/ 415/455/462 multiple effective dates, only
2014 263 HB2389 1/1/2015 5075/5102/ 530 1/1/2015 matters




Page 100
Section XV: Amends Sec. 14-660, Use tax: exemptions.

Legislation (Year: Bill Numbers) – 2014: HB2285; 2015: HB2670, SB1446; 2016:
HB2025, HB2326, HB2584, HB2676, SB1505; 2017: HB2064; 2018: HB2484, SB1120

There were multiple changes to Use tax exemptions, reflecting similar exemptions
added or amended to the Contracting, Jet Fuel, Restaurant & Bar, Retail, and Utilities
classifications. They are listed here in order of year enacted and bill number, and they
are each followed by the effective date and the subsection impacted.
1) 2014, HB2285: Added exemption for the transfer of coal back and forth between a
power plant and coal refinery, effective January 1, 2015; Subsection (tt).
2) 2015, HB2670: Added “international operations centers” to the eligible facilities that
can qualify for exempt purchases of Utilities used in manufacturing and smelting
(Local Option #PP), effective August 1, 2015; Subsection (ss).
3) 2015, SB1446: Added persons possessing a “MRRA” exemption certificate to the
current exemption for purchases of construction materials by a contractor, effective
January 1, 2015; Subsection (k).
4) 2016, HB2025: Added “liquefied petroleum gas” to the eligible utilities that could be
purchased exempt for use in manufacturing, smelting, and international operation
centers (Local Option #PP), effective September 1, 2016; Subsection (ss).
5) 2016, HB2326: Added farmers who produce animal feed to the statutory definition of
“Food Producer” thus making all purchases of their feed exempt from tax, effective
August 6, 2016; Subsection (v).
6) 2016, HB2584: Edited the requirements for the exemption of data center equipment
that qualifies for tax relief offered by the Arizona Commerce Authority, effective
retroactively from September 12, 2013; Subsection (uu).
7) 2016, HB2676: Amended the minimum energy usage and other requirements
necessary to qualify for purchasing exempt utilities for use in manufacturing,
smelting, and international operation centers (Local Option #PP), effective January
1, 2017; Subsection (ss).
8) 2016, SB1505: Removed a clause from the original language that stated gas
transportation charges were excluded from the exemption for utilities for use in
manufacturing, smelting, and international operation centers (Local Option #PP),
thus making them exempt, effective September 1, 2016; Subsection (ss).
9) 2017, HB2064: Added a new limitation on Jet Fuel Use tax (Local Option #LL),
limiting Use tax imposition to only the first 10 million gallons purchased during a
calendar year, effective December 1, 2018; Subsection (vv).
10) 2018, HB2484: Added exemptions for the purchase, manufacture or distribution
among wholesalers of food for human consumption, as well any container or
packaging used exclusively for transporting, protecting or consuming food items
intended for human consumption (as part of the preemption against a “soda” tax),
effective August 3, 2018; Subsections (ww) and (yy).
11) 2018, SB1120: Added the exemption for purchases of tangible personal property
sold at events operated by groups associated with Major League Baseball or a
professional golf tour, including new amendments to prohibit application of the
exemption for groups owned or controlled by a Major League team, MLB, or a pro




Page 101
golf tour unless they operated such events before 2018, effective from and after
January 1, 2018; Subsection (ee).


Legislative Bills 2014 - 2018

Effective ARS Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Exempt coal transfers
6004/5061/5072/ between the mine and
2014 54 HB2285 1/1/2015 5151/5159 465/660 refiner
Electricity, natural gas to a
manufacturer exempt; Local
Option #PP
2014 7 SB1413 8/1/2015 6012/5063/5159 480/660 ALREADY ADOPTED
Adds "international
operations center" to Option
#PP for Utilities exemption
2015 6 HB2670 8/1/2015 6012/5063/5159 480 / 660 for manufacturers
Building permit
requirements; create liability
for Retail equivalent on
MRRA used in Prime; clarify
Retail exemptions for
9-467 6004/ Contractors/MRRA; revises
5005/5008.1/5009/ 110/415/415.1/ MRRA to limit "alteration",
2015 4 SB1446 1/1/2015 5010/5061/5075/5159 465/660 etc.
Adds 'liquefied petroleum
2016 359 HB2025 9/1/2016 6012/5063/5159 480/660 gas" to Option #PP
Adds farmers who sell
livestock feed to the
3-561/3-563 definition of "food
2016 361 HB2326 8/6/2016 5009/5022/5061/5159 465/660 producers"
Edits exemption for data
2016 369 HB2584 9/12/2013 6004/5061/5159 465/660 center equipment
Alters the qualifications, etc.
2016 374 HB2676 1/1/2017 6012/5009/5063/5159 480/660 for Option #PP
Adds gas transportation
2016 357 SB1505 9/1/2016 6012/5063/5159 480/660 charges to Option #PP
Exempts Jet Fuel over 10
million gallons; requires tax
collected to be spent on
2017 50 HB2064 12/1/2017 6014 422/660 airport operations
Moves existing food
preemptions into new
section; prohibits any
455/462/ differential tax on a specific
2018 17 HB2484 8/3/2018 6004/6015 465/660 food (no soda tax allowed)
6004/5061/5069/ 410/445/ Edits the exemption for MLB
2018 249 SB1120 1/1/2018 5073/5074/5159 455/465/660 & pro golf events




Page 102
2019 Speculative Builder Amendment

This amendment addresses certain issues presented in bills at the legislature by
resolving the concerns of proponents, along with numerous clean-up edits, and the
transfer of selected Regulations to the main body of the MCTC as new Sections. These
amendments were approved by the Municipal Tax Code Commission in a public hearing
held on February 22, 2019.

Section XVI: Amends Sec. 14-416, Construction Contracting - speculative
builders.

Speculative builders are taxed at the local level only. These changes are effective on
April 1, 2019. The amendment changed the definition of "Improved Real Property" to
clarify that only the first sale after the Certificate of Occupancy or similar document is
issued is subject to tax, and any subsequent improvements, remodeling or expansion of
the original building is not considered taxable as reconstruction or the creation of a new
structure; changed the definition of "Partially Improved Residential Real Property" by
removing the word “residential” in several places and making grammatical edits,
opening up the exemption for sales between two developers for both residential and
commercial builders, including those who only do non-structural improvements to
vacant land or add water, power, and streets; eliminated Local Option #M which allowed
a deduction from the selling price for the cost of land. Local Option #N remains in place,
allowing for a deduction based on the "fair market value" of land, with 20% of total
selling price as the default safe harbor; removed the requirement that developers attach
a written statement to their tax return for any sale to another developer; added an
exemption for in-place leases allowing a reduction in total selling price for the present
value of obligated future lease receipt, which recognizes the sale of a property with
existing leases is really the sale of a building combined with the sale of the business of
residential or commercial lease; placed in code a deduction that has been applied for
decades in accordance with a practice decision and written direction provided by the
cities, allowing a seller to reduce the selling price by the amount of taxes paid by their
contractor to the state and county; added language clarifying that a tax credit is allowed
for any Spec builder tax paid by a prior owner if a subsequent sale is subjected to the
tax; and added "Qualified Trust" to the list of persons who can make a bona fide sale of
a home and thus be exempt from the tax, provided at least one resident in the home is a
beneficiary of the trust.




Page 103
2019 Speculative Builder Amendment
ARS
Effective Section PCC Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Speculative builders- taxable at the local
level only: adds clarifying language to
definitions for "improved real property" and
"partially improved residential real
property" regarding exemption for sales
between two developers; sets the agreed-
upon calculation of the tax base deduction;
eliminates the developer sales written
statement requirement; adds exemption for
in-place leases; codifies practice of
allowing sales price reduction for taxes
already paid by contractor; clarifies sales of
Qualified Trusts; and transfers
corresponding Section 416 Regulations to
the main body of the MCTC as new
2019 N/A N/A 4/1/2019 N/A 416/416.1/416.2 Sections.




Page 104
2019 Rental of Real Property and Telecommunications Amendments

The amendments titled “2019 Rental of Real Property Amendment” with a retroactive
effective date of January 1, 2012 and “2019 Telecommunications Amendment” with an
effective date of July 1, 2019 address certain issues presented in bills at the legislature
by resolving the concerns of proponents, along with various clean-up edits, and the
transfer of selected Regulations to the main body of the MCTC as new Sections. These
amendments were approved by the Municipal Tax Code Commission in a public hearing
held on May 31, 2019.

Included in Section VI: Amends Sec. 14-445, Rental, leasing, and licensing for use
of real property.
Amends Sec. 445, Rental, leasing, and licensing for use of real property with a
retroactive effective date of January 1, 2012. It removes an obsolete Local Option #T
related to affiliated corporations; adds an exemption for payments by residents pursuant
to life care contracts to a provider that holds a permit issued by the Department of
Insurance; and establishes a limit on refund claims and the process for seeking claims.

2019 Rental of Real Property Amendment
ARS PCC
Effective Section Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Removes an obsolete Local Option #T related
to affiliated corporations; adds an exemption for
payments by residents pursuant to life care
contracts to a provider that holds a permit
issued by the Department of Insurance; and
establishes a limit on refund claims and the
2019 N/A N/A 1/1/2012 N/A 445 process for seeking claims.


Included in Section XI: Amends Sec. 14-470, Telecommunication services.
Amends Sec. 470, Telecommunication services with an effective date of July 1, 2019. It
incorporates the language of former Regulation 470.1 into the Section; adds an
exemption for “over-the-top” audio and video programming and related on-demand
programming provided without an additional charge; and repeals Regulation 470.1.

2019 Telecommunications Amendment
ARS PCC
Effective Section Section
Year Chapter Bill # date 42-XXXX 14-XXXX Description
Incorporates the language of former Regulation
470.1 into the Section; adds an exemption for
“over-the-top” audio and video programming and
related on-demand programming provided
without an additional charge; and repeals
2019 N/A N/A 7/1/2019 N/A 470 Regulation 470.1.




Page 105
Attachment B
Amendments to the Phoenix City (Tax) Code
1 Section I. Phoenix City Code Section 14-110 is amended as follows, with the following

2 effective dates per subsection: (a)(3) January 1, 2015; (a)(6) June 1, 1998; (a)(6)(A)(iv)

3 January 1, 2018; (a)(14) April 17, 1985.


5 Sec.14-110. Definitions: Income-producing capital equipment.

6 (a) The following tangible personal property, other than items excluded in subsection (d)

7 below, shall be deemed "income-producing capital equipment" for the purposes of this

8 Chapter:

9 (1) machinery or equipment used directly in manufacturing, processing, fabricating,

10 job printing, refining or metallurgical operations. The terms "manufacturing",

11 "processing", "fabricating", "job printing", "refining", and "metallurgical" as used

12 in this paragraph refer to and include those operations commonly understood

13 within their ordinary meaning. "Metallurgical operations" includes leaching,

14 milling, precipitating, smelting and refining.

15 (2) mining machinery, or equipment, used directly in the process of extracting ores or

16 minerals from the earth for commercial purposes, including equipment required to

17 prepare the materials for extraction and handling, loading or transporting such

18 extracted material to the surface. "Mining" includes underground, surface and

19 open pit operations for extracting ores and minerals.

20 (3) tangible personal property, sold to persons engaged in business classified under

21 the telecommunications classification, INCLUDING A PERSON

22 REPRESENTING OR WORKING ON BEHALF OF SUCH A PERSON IN A

23 MANNER DESCRIBED IN SECTION 14-415(B)(12) AND A.R.S. SECTION



Page 106
Attachment B
Amendments to the Phoenix City (Tax) Code
1 42-5075, SUBSECTION O, consisting of central office switching equipment;

2 switchboards; private branch exchange equipment; microwave radio equipment,

3 and carrier equipment including optical fiber, coaxial cable, and other

4 transmission media which are components of carrier systems.

5 (4) machinery, equipment, or transmission lines used directly in producing or

6 transmitting electrical power, but not including distribution. Transformers and

7 control equipment used at transmission substation sites constitute equipment used

8 in producing or transmitting electrical power.

9 (5) pipes or valves four inches (4") in diameter or larger and related equipment, used

10 to transport oil, natural gas, artificial gas, water, or coal slurry. For the purpose of

11 this Section, related equipment includes: compressor units, regulators, machinery

12 and equipment, fittings, seals and any other parts that are used in operating the

13 pipes or valves.

14 (6) aircraft, navigational and communication instruments, and other accessories and

15 related equipment sold to:

16 (A) a person:

17 (i) holding, OR EXEMPTED BY FEDERAL LAW FROM

18 OBTAINING, a federal certificate of public convenience and

19 necessity FOR USE AS, IN CONJUNCTION WITH OR

20 BECOMING PART OF AN AIRCRAFT TO BE USED TO

21 TRANSPORT PERSONS FOR HIRE IN INTRASTATE,

22 INTERSTATE OR FOREIGN COMMERCE.




Page 107
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (ii) THAT IS CERTIFICATED OR LICENSED UNDER FEDERAL

2 AVIATION ADMINISTRATION REGULATIONS (14 CODE

3 OF FEDERAL REGULATIONS PART 121 OR 135) AS A

4 SCHEDULED OR UNSCHEDULED CARRIER OF PERSONS

5 FOR HIRE FOR USE AS OR IN CONJUNCTION WITH OR

6 BECOMING PART OF AN AIRCRAFT TO BE USED TO

7 TRANSPORT PERSONS FOR HIRE IN INTRASTATE,

8 INTERSTATE OR FOREIGN COMMERCE.

9 (iii) HOLDING A foreign air carrier permit for air transportation for

10 use as or in conjunction with or becoming a part of aircraft to be

11 used to transport persons, property or United States mail in

12 intrastate, interstate or foreign commerce.

13 (iv) OPERATING AN AIRCRAFT TO TRANSPORT PERSONS IN

14 ANY MANNER FOR COMPENSATION OR HIRE, OR FOR

15 USE IN A FRACTIONAL OWNERSHIP PROGRAM THAT

16 MEETS THE REQUIREMENTS OF FEDERAL AVIATION

17 ADMINISTRATION REGULATIONS (14 CODE OF FEDERAL

18 REGULATIONS PART 91, SUBPART K), INCLUDING AS AN

19 AIR CARRIER, A FOREIGN AIR CARRIER OR A

20 COMMERCIAL OPERATOR OR UNDER A RESTRICTED

21 CATEGORY, WITHIN THE MEANING OF 14 CODE OF

22 FEDERAL REGULATIONS, REGARDLESS OF WHETHER

23 THE OPERATION OR AIRCRAFT IS REGULATED OR




Page 108
Attachment B
Amendments to the Phoenix City (Tax) Code
1 CERTIFIED UNDER PART 91, 119, 121, 133, 135, 136 OR 137,

2 OR ANOTHER PART OF 14 CODE OF FEDERAL

3 REGULATIONS.

4 (v) THAT WILL LEASE OR OTHERWISE TRANSFER

5 OPERATIONAL CONTROL, WITHIN THE MEANING OF

6 FEDERAL AVIATION ADMINISTRATION OPERATIONS

7 SPECIFICATION A008, OR ITS SUCCESSOR, OF THE

8 AIRCRAFT, INSTRUMENTS OR ACCESSORIES TO ONE OR

9 MORE PERSONS DESCRIBED IN ITEM (i), (ii), (iii) OR (iv)

10 OF THIS SUBDIVISION, SUBJECT TO A.R.S. SECTION 42-

11 5009, SUBSECTION N.

12 (B) any foreign government.

13 (C) persons who are not residents of this State and who will not use such

14 property in this State other than in removing such property from this State.

15 This subdivision also applies to corporations that are not incorporated in

16 this State, regardless of maintaining a place of business in this State, if the

17 principal corporate office is located outside this State and the property will

18 not be used in this State other than in removing the property from this

19 State.

20 (7) machinery, tools, equipment and related supplies used or consumed directly in

21 repairing, remodeling or maintaining aircraft, aircraft engines or aircraft

22 component parts by or on behalf of a certificated or licensed carrier of persons or

23 property.




Page 109
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (8) railroad rolling stock, rails, ties and signal control equipment used directly to

2 transport persons or property.

3 (9) machinery or equipment used directly to drill for oil or gas or used directly in the

4 process of extracting oil or gas from the earth for commercial purposes.

5 (10) buses or other urban mass transit vehicles which are used directly to transport

6 persons or property for hire or pursuant to a governmentally adopted and

7 controlled urban mass transportation program and which are sold to bus

8 companies holding a federal certificate of convenience and necessity or operated

9 by a city, town or other governmental entity or by any person contracting with

10 such governmental entity as part of a governmentally adopted and controlled

11 program to provide urban mass transportation.

12 (11) metering, monitoring, receiving, and transmitting equipment acquired by persons

13 engaged in the business of providing utility services or telecommunications

14 services; but only to the extent that such equipment is to be used by the customers

15 of such persons and such persons separately charge or bill their customers for use

16 of such equipment.

17 (12) groundwater measuring devices required under A.R.S. SECTION 45-604.

18 (13) machinery or equipment used in research and development. In this paragraph,

19 "research and development" means basic and applied research in the sciences and

20 engineering, and designing, developing or testing prototypes, processes or new

21 products, including research and development of computer software that is

22 embedded in or an integral part of the prototype or new product or that is required

23 for machinery or equipment otherwise exempt under this Section to function




Page 110
Attachment B
Amendments to the Phoenix City (Tax) Code
1 effectively. Research and development do not include manufacturing quality

2 control, routine consumer product testing, market research, sales promotion, sales

3 service, research in social sciences or psychology, computer software research

4 that is not included in the definition of research and development, or other

5 nontechnological activities or technical services.

6 (14) (Reserved)

7 (15) Included in income producing capital equipment are liquid, solid or gaseous

8 chemicals used in manufacturing, processing, fabricating, mining, refining,

9 metallurgical operations, research and development or job printing, if using or

10 consuming the chemicals, alone or as part of an integrated system of chemicals,

11 involving direct contact with the materials from which the product is produced for

12 the purpose of causing or permitting a chemical or physical change to occur in the

13 materials as part of the production process. This subsection does not include

14 chemicals that are used or consumed in activities such as packaging, storage or

15 transportation but does not affect any deduction for such chemicals that is

16 otherwise provided by this Code. Chemicals meeting the requirements of this

17 subsection are deemed not to be expendable under subsection (d) of this Section.

18 (16) cleanrooms that are used for manufacturing, processing, fabrication or research

19 and development, as defined in paragraph (13) of this subsection, of

20 semiconductor products. For purposes of this paragraph, "cleanroom" means all

21 property that comprises or creates an environment where humidity, temperature,

22 particulate matter and contamination are precisely controlled within specified

23 parameters, without regard to whether the property is actually contained within




Page 111
Attachment B
Amendments to the Phoenix City (Tax) Code
1 that environment or whether any of the property is affixed to or incorporated into

2 real property. Cleanroom:

3 (A) includes the integrated systems, fixtures, piping, movable partitions,

4 lighting and all property that is necessary or adapted to reduce

5 contamination or to control airflow, temperature, humidity, chemical

6 purity or other environmental conditions or manufacturing tolerances, as

7 well as the production machinery and equipment operating in conjunction

8 with the cleanroom environment.

9 (B) does not include the building or other permanent, nonremovable

10 component of the building that houses the cleanroom environment.

11 (17) machinery and equipment that are purchased by or on behalf of the owners of a

12 soundstage complex and primarily used for motion picture, multimedia or

13 interactive video production in the complex. This paragraph applies only if the

14 initial construction of the soundstage complex begins after June 30, 1996 and

15 before January 1, 2002 and the machinery and equipment are purchased before

16 the expiration of five years after the start of initial construction. For purposes of

17 this paragraph:

18 (A) “motion picture, multimedia or interactive video production" includes

19 products for theatrical and television release, educational presentations,

20 electronic retailing, documentaries, music videos, industrial films, cd-rom,

21 video game production, commercial advertising and television episode

22 production and other genres that are introduced through developing

23 technology.




Page 112
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (B) “soundstage complex" means a facility of multiple stages including

2 production offices, construction shops and related areas, prop and costume

3 shops, storage areas, parking for production vehicles and areas that are

4 leased to businesses that complement the production needs and orientation

5 of the overall facility.

6 (18) tangible personal property that is used by either of the following to receive, store,

7 convert, produce, generate, decode, encode, control or transmit

8 telecommunications information:

9 (A) any direct broadcast satellite television or data transmission service that

10 operates pursuant to 47 Code of Federal Regulations parts 25 and 100.

11 (B) any satellite television or data transmission facility, if both of the

12 following conditions are met:

13 (i) over two-thirds of the transmissions, measured in megabytes,

14 transmitted by the facility during the test period were transmitted

15 to or on behalf of one or more direct broadcast satellite television

16 or data transmission services that operate pursuant to 47 Code of

17 Federal Regulations parts 25 and 100.

18 (ii) over two-thirds of the transmissions, measured in megabytes,

19 transmitted by or on behalf of those direct broadcast television or

20 data transmission services during the test period were transmitted

21 by the facility to or on behalf of those services.

22 For purposes of subdivision (B) of this paragraph, "test period" means the

23 three hundred sixty-five day period beginning on the later of the date on




Page 113
Attachment B
Amendments to the Phoenix City (Tax) Code
1 which the tangible personal property is purchased or the date on which the

2 direct broadcast satellite television or data transmission service first

3 transmits information to its customers.

4 (19) machinery and equipment that is used directly in the feeding of poultry, the

5 environmental control of housing for poultry, the movement of eggs within a

6 production and packaging facility or the sorting or cooling of eggs. This

7 exemption does not apply to vehicles used for transporting eggs.

8 (20) machinery or equipment, including related structural components, that is

9 employed in connection with manufacturing, processing, fabricating, job printing,

10 refining, mining, natural gas pipelines, metallurgical operations,

11 telecommunications, producing or transmitting electricity or research and

12 development that is used directly to meet or exceed rules or regulations adopted

13 by the Federal Energy Regulatory Commission, the United States Environmental

14 Protection Agency, the United States Nuclear Regulatory Commission, the

15 Arizona Department of Environmental Quality or a political subdivision of this

16 state to prevent, monitor, control or reduce land, water or air pollution.

17 (21) machinery or equipment that enables a television station to originate and

18 broadcast or to receive and broadcast digital television signals and that was

19 purchased to facilitate compliance with the Telecommunications Act of 1996

20 (P.L. 104-104; 110 Stat. 56; 47 United States Code Section 336) and the Federal

21 Communications Commission Order issued April 21, 1997, 47 Code of Federal

22 Regulations Part 73. This paragraph does not exempt any of the following:




Page 114
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (A) repair or replacement parts purchased for the machinery or equipment

2 described in this paragraph.

3 (B) machinery or equipment purchased to replace machinery or equipment for

4 which an exemption was previously claimed and taken under this

5 paragraph.

6 (C) any machinery or equipment purchased after the television station has

7 ceased analog broadcasting, or purchased after November 1, 2009,

8 whichever occurs first.

9 (b) The term "income-producing capital equipment" shall further include ancillary machinery

10 and equipment used for the treatment of waste products created by the business activities

11 which are allowed to purchase "income-producing capital equipment" defined in

12 subsection (a) above.

13 (c) The term "income-producing capital equipment" shall further include repair and

14 replacement parts, other than the items in subsection (d) below, where the property is

15 acquired to become an integral part of another item itemized in subsections (a) or (b)

16 above.

17 (d) The tangible personal property defined as income-producing capital equipment in this

18 Section shall not include:

19 (1) expendable materials. For purposes of this paragraph, expendable materials do not

20 include any of the categories of tangible personal property specified in

21 subsections (a), (b) or (c) of this Section regardless of the cost or useful life of

22 that property.

23 (2) janitorial equipment and hand tools.




Page 115
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (3) office equipment, furniture, and supplies.

2 (4) tangible personal property used in selling or distributing activities.

3 (5) motor vehicles required to be licensed by the State of Arizona, except buses or

4 other urban mass transit vehicles specifically exempted pursuant to subsection

5 (a)(10) above without regard to the use of such motor vehicles.

6 (6) shops, buildings, docks, depots, and all other materials of whatever kind or

7 character not specifically included as exempt.

8 (7) motors and pumps used in drip irrigation systems.

9 (8) (RESERVED)

10 (e) For the purposes of this Section:

11 (1) “aircraft” includes:

12 (A) an airplane flight simulator that is approved by the Federal Aviation

13 Administration for use as a Phase II or higher flight simulator under

14 Appendix H, 14 Code of Federal Regulations Part 121.

15 (B) tangible personal property that is permanently affixed or attached as a

16 component part of an aircraft that is owned or operated by a certificated or

17 licensed carrier of persons or property.

18 (2) “other accessories and related equipment" includes aircraft accessories and

19 equipment such as ground service equipment that physically contact aircraft at

20 some point during the overall carrier operation.





Page 116
Attachment B
Amendments to the Phoenix City (Tax) Code
1 Section II. Phoenix City Code Section 14-410 is amended as follows with the following

2 effective dates per subsection: (b)(6) January 1, 2018; (b)(7) January 1, 2010; (b)(8) August

3 6, 2016; (b)(9) January 1, 2019.


5 Sec. 14-410. Amusements, exhibitions, and similar activities.

6 (a) The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the

7 gross income from the business activity upon every person engaging or continuing in the

8 business of providing amusement that begins in the city or takes place entirely within the

9 City, which includes the following type or nature of businesses:

10 (1) operating or conducting theaters, movies, operas, shows of any type or nature,

11 exhibitions, concerts, carnivals, circuses, amusement parks, menageries, fairs,

12 races, contests, games, billiard or pool parlors, bowling alleys, skating rinks,

13 tennis courts, golf courses, video games, pinball machines, public dances, dance

14 halls, sports events, jukeboxes, batting and driving ranges, animal rides, or any

15 other business charging admission for exhibition, amusement, or entertainment.

16 (2) (Reserved)

17 (b) Deductions or exemptions. The gross proceeds of sales or gross income derived from the

18 following sources is exempt from the tax imposed by this Section:

19 (1) (Reserved)

20 (2) Amounts retained by the Arizona Exposition and State Fair Board from ride ticket

21 sales at the annual Arizona State Fair.

22 (3) Income received from a hotel business subject to tax under Section 14-444, if all

23 of the following apply:




Page 117
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (A) The hotel business receives gross income from a customer for the specific

2 business activity otherwise subject to amusement tax.

3 (B) The consideration received by the hotel business is equal to or greater than

4 the amount to be deducted under this subsection.

5 (C) The hotel business has provided an exemption certificate to the person

6 engaging in business under this Section.

7 (4) Income that is specifically included as the gross income of a business activity

8 upon which another Section of this Article imposes a tax, that is separately stated

9 to the customer and is taxable to the person engaged in that classification not to

10 exceed consideration paid to the person conducting the activity.

11 (5) Income from arranging transportation connected to amusement activity that is

12 separately stated to the customer, not to exceed consideration paid to the

13 transportation business.

14 (6) EXHIBITION EVENTS IN THIS STATE SPONSORED, CONDUCTED OR

15 OPERATED BY A NONPROFIT ORGANIZATION THAT IS EXEMPT FROM

16 TAXATION UNDER SECTION 501(C)(3), 501(C)(4) OR 501(C)(6) OF THE

17 INTERNAL REVENUE CODE IF THE ORGANIZATION IS ASSOCIATED

18 WITH A MAJOR LEAGUE BASEBALL TEAM OR A NATIONAL TOURING

19 PROFESSIONAL GOLFING ASSOCIATION AND NO PART OF THE

20 ORGANIZATION'S NET EARNINGS INURES TO THE BENEFIT OF ANY

21 PRIVATE SHAREHOLDER OR INDIVIDUAL. THIS PARAGRAPH DOES

22 NOT APPLY TO AN ORGANIZATION THAT IS OWNED, MANAGED OR

23 CONTROLLED, IN WHOLE OR IN PART, BY A MAJOR LEAGUE




Page 118
Attachment B
Amendments to the Phoenix City (Tax) Code
1 BASEBALL TEAM, OR ITS OWNERS, OFFICERS, EMPLOYEES OR

2 AGENTS, OR BY A MAJOR LEAGUE BASEBALL ASSOCIATION OR

3 PROFESSIONAL GOLFING ASSOCIATION, OR ITS OWNERS, OFFICERS,

4 EMPLOYEES OR AGENTS, UNLESS THE ORGANIZATION CONDUCTED

5 OR OPERATED EXHIBITION EVENTS IN THIS STATE BEFORE

6 JANUARY 1, 2018 THAT WERE EXEMPT FROM STATE TRANSACTION

7 PRIVILEGE TAX UNDER A.R.S. SECTION 42-5073.

8 (7) UNTIL MARCH 1, 2017, THE GROSS PROCEEDS OF SALES OR GROSS

9 INCOME DERIVED FROM ENTRY FEES PAID BY PARTICIPANTS FOR

10 EVENTS THAT CONSIST OF A RUN, WALK, SWIM OR BICYCLE RIDE

11 OR A SIMILAR EVENT, OR ANY COMBINATION OF THESE EVENTS.

12 (8) THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM

13 ENTRY FEES PAID BY PARTICIPANTS FOR EVENTS THAT ARE

14 OPERATED OR CONDUCTED BY NONPROFIT ORGANIZATIONS THAT

15 ARE EXEMPT FROM TAXATION UNDER SECTION 501(c)(3) OF THE

16 INTERNAL REVENUE CODE AND OF WHICH NO PART OF THE

17 ORGANIZATION'S NET EARNINGS INURES TO THE BENEFIT OF ANY

18 PRIVATE SHAREHOLDER OR INDIVIDUAL, IF THE EVENT CONSISTS

19 OF A RUN, WALK, SWIM OR BICYCLE RIDE OR A SIMILAR EVENT, OR

20 ANY COMBINATION OF THESE EVENTS.

21 (9) (RESERVED)

22 (c) The tax imposed by this Section shall not include arranging an amusement activity as a

23 service to a person's customers if that person is not otherwise engaged in the business of




Page 119
Attachment B
Amendments to the Phoenix City (Tax) Code
1 operating or conducting an amusement themselves or through others. This exception does

2 not apply to businesses that operate or conduct amusements pursuant to customer orders

3 and send the billings and receive the payments associated with that activity, including

4 when the amusement is performed by third party independent contractors. For the

5 purposes of this paragraph, "arranging" includes billing for or collecting amusement

6 charges from a person's customers on behalf of the persons providing the amusement.


8 Section III. Phoenix City Code Section 14-415 is amended as follows, with an effective date

9 of January 1, 2015.


11 Sec. 14-415. Construction contracting: construction contractors.

12 (a) The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the

13 gross income from the business upon every construction contractor engaging or

14 continuing in the business activity of construction contracting within the City.

15 (1) However, gross income from construction contracting shall not include charges

16 related to groundwater measuring devices required by A.R.S. Section § 45-604.

17 (2) (Reserved)

18 (3) Gross income from construction contracting shall not include gross income from

19 the sale of manufactured buildings taxable under Section 14-427.

20 (4) For taxable periods beginning from and after July 1, 2008, the portion of gross

21 proceeds of sales or gross income attributable to the actual direct costs of

22 providing architectural or engineering services that are incorporated in a contract




Page 120
Attachment B
Amendments to the Phoenix City (Tax) Code
1 is not subject to tax under this Section. For the purposes of this subsection, "direct

2 costs" means the portion of the actual costs that are directly expended in

3 providing architectural or engineering services.

4 (5) HANDYMAN EXCLUSION. THIS CLASSIFICATION DOES NOT INCLUDE

5 GROSS INCOME FROM ANY WORK OR OPERATION PERFORMED BY A

6 PERSON THAT IS NOT REQUIRED TO BE LICENSED BY THE

7 REGISTRAR OF CONTRACTORS PURSUANT TO A.R.S. SECTION 32-

8 1121.

9 (b) Deductions and exemptions.

10 (1) Gross income derived from acting as a "subcontractor" shall be exempt from the

11 tax imposed by this Section.

12 (2) All construction contracting gross income subject to the tax and not deductible

13 herein shall be allowed a deduction of thirty-five percent (35%).

14 (3) The gross proceeds of sales or gross income attributable to the purchase of

15 machinery, equipment or other tangible personal property that is exempt from or

16 deductible from privilege or use tax under:

17 (A) Section 14-465, subsections (g) and (p)

18 (B) Section 14-660, subsections (g) and (p);

19 shall be exempt or deductible, respectively, from the tax imposed by this Section.

20 (4) The gross proceeds of sales or gross income that is derived from a contract

21 entered into for the installation, assembly, repair or maintenance of income-

22 producing capital equipment, as defined in Section 14-110, that is deducted from




Page 121
Attachment B
Amendments to the Phoenix City (Tax) Code
1 the retail classification pursuant to Section 14-465(g), that does not become a

2 permanent attachment to a building, highway, road, railroad, excavation or

3 manufactured building or other structure, project, development or improvement

4 shall be exempt from the tax imposed by this Section. If the ownership of the

5 realty is separate from the ownership of the income-producing capital equipment,

6 the determination as to permanent attachment shall be made as if the ownership

7 was the same. The deduction provided in this paragraph does not include gross

8 proceeds of sales or gross income from that portion of any contracting activity

9 which consists of the development of, or modification to, real property in order to

10 facilitate the installation, assembly, repair, maintenance or removal of the income-

11 producing capital equipment. For purposes of this paragraph, "permanent

12 attachment" means at least one of the following:

13 (A) to be incorporated into real property.

14 (B) to become so affixed to real property that it becomes part of the real

15 property.

16 (C) to be so attached to real property that removal would cause substantial

17 damage to the real property from which it is removed.

18 (5) The gross proceeds of sales or gross income received from a contract for the

19 construction of an environmentally controlled facility for the raising of poultry for

20 the production of eggs and the sorting, or cooling and packaging of eggs shall be

21 exempt from the tax imposed under this Section.

22 (6) The gross proceeds of sales or gross income that is derived from the installation,

23 assembly, repair or maintenance of cleanrooms that are deducted from the tax




Page 122
Attachment B
Amendments to the Phoenix City (Tax) Code
1 base of the retail classification pursuant to Section 14-465, subsection (g) shall be

2 exempt from the tax imposed under this Section.

3 (7) The gross proceeds of sales or gross income that is derived from a contract

4 entered into with a person who is engaged in the commercial production of

5 livestock, livestock products or agricultural, horticultural, viticultural or

6 floricultural crops or products in this State for the construction, alteration, repair,

7 improvement, movement, wrecking or demolition or addition to or subtraction

8 from any building, highway, road, excavation, manufactured building or other

9 structure, project, development or improvement used directly and primarily to

10 prevent, monitor, control or reduce air, water or land pollution shall be exempt

11 from the tax imposed under this Section.

12 (8) The gross proceeds of sales or gross income received from a post construction

13 contract to perform post-construction treatment of real property for termite and

14 general pest control, including wood destroying organisms, shall be exempt from

15 tax imposed under this Section.

16 (9) Through December 31, 2009, the gross proceeds of sales or gross income received

17 from a contract for constructing any lake facility development in a commercial

18 enhancement reuse district that is designated pursuant to A.R.S. SECTION 9-

19 499.08 if the contractor maintains the following records in a form satisfactory to

20 the Arizona Department of Revenue and to the City:

21 (A) The certificate of qualification of the lake facility development issued by

22 the City pursuant to A.R.S. SECTION 9-499.08, subsection D.




Page 123
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (B) All state and local transaction privilege tax returns for the period of time

2 during which the contractor received gross proceeds of sales or gross

3 income from a contract to construct a lake facility development in a

4 designated commercial enhancement reuse district, showing the amount

5 exempted from state and local taxation.

6 (C) Any other information considered to be necessary.

7 (10) Any amount attributable to development fees that are incurred in relation to the

8 construction, development or improvement of real property and paid by the

9 taxpayer as defined in the model city tax code or by a contractor providing

10 services to the taxpayer. For the purposes of this paragraph:

11 (A) the attributable amount shall not exceed the value of the development fees

12 actually imposed.

13 (B) the attributable amount is equal to the total amount of development fees

14 paid by the taxpayer or by a contractor providing services to the taxpayer

15 and the total development fees credited in exchange for the construction

16 of, contribution to or dedication of real property for providing public

17 infrastructure, public safety or other public services necessary to the

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

19 fees.

20 (C) “development fees" means fees imposed to offset capital costs of

21 providing public infrastructure, public safety or other public services to a

22 development and authorized pursuant to A.R.S. Section 9-463.05, A.R.S.




Page 124
Attachment B
Amendments to the Phoenix City (Tax) Code
1 Section 11-1102 or A.R.S. Title 48 regardless of the jurisdiction to which

2 the fees are paid.

3 (11) For taxable periods beginning from and after July 1, 2008 and ending before

4 January 1, 2017, the gross proceeds of sales or gross income derived from a

5 contract to provide and install a solar energy device. The contractor shall register

6 with the department of revenue as a solar energy contractor. By registering, the

7 contractor acknowledges that it will make its books and records relating to sales

8 of solar energy devices available to the department of revenue and the city, as

9 applicable, for examination.

10 (12) THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM

11 A CONTRACT WITH THE OWNER OF REAL PROPERTY OR

12 IMPROVEMENTS TO REAL PROPERTY FOR THE MAINTENANCE,

13 REPAIR, REPLACEMENT OR ALTERATION OF EXISTING PROPERTY IS

14 NOT SUBJECT TO TAX UNDER THIS SECTION IF THE CONTRACT DOES

15 NOT INCLUDE MODIFICATION ACTIVITIES, EXCEPT AS SPECIFIED IN

16 THIS PARAGRAPH. THE GROSS PROCEEDS OF SALES OR GROSS

17 INCOME DERIVED FROM A DE MINIMIS AMOUNT OF MODIFICATION

18 ACTIVITY DOES NOT SUBJECT THE CONTRACT OR ANY PART OF THE

19 CONTRACT TO TAX UNDER THIS SECTION. FOR THE PURPOSES OF

20 THIS PARAGRAPH:

21 (A) ANY TERM NOT DEFINED IN THIS PARAGRAPH THAT IS

22 DEFINED IN A.R.S. SECTION 42-5075 HAS THE SAME MEANING

23 PRESCRIBED IN A.R.S. SECTION 42-5075.




Page 125
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (B) TANGIBLE PERSONAL PROPERTY THAT IS INCORPORATED OR

2 FABRICATED INTO A PROJECT DESCRIBED IN THIS

3 SUBSECTION MAY BE SUBJECT TO THE AMOUNT PRESCRIBED

4 IN SECTION 14-415.1.

5 (C) EACH CONTRACT IS INDEPENDENT OF ANY OTHER

6 CONTRACT, EXCEPT THAT ANY CHANGE ORDER THAT

7 DIRECTLY RELATES TO THE SCOPE OF WORK OF THE

8 ORIGINAL CONTRACT SHALL BE TREATED THE SAME AS THE

9 ORIGINAL CONTRACT UNDER THIS CHAPTER, REGARDLESS OF

10 THE AMOUNT OF MODIFICATION ACTIVITIES INCLUDED IN

11 THE CHANGE ORDER. IF A CHANGE ORDER DOES NOT

12 DIRECTLY RELATE TO THE SCOPE OF WORK OF THE ORIGINAL

13 CONTRACT, THE CHANGE ORDER SHALL BE TREATED AS A

14 NEW CONTRACT, WITH THE TAX TREATMENT OF ANY

15 SUBSEQUENT CHANGE ORDER TO FOLLOW THE TAX

16 TREATMENT OF THE CONTRACT TO WHICH THE SCOPE OF

17 WORK OF THE SUBSEQUENT CHANGE ORDER DIRECTLY

18 RELATES.

19 (D) THIS PARAGRAPH DOES NOT APPLY TO A CONTRACT THAT

20 PRIMARILY INVOLVES SURFACE OR SUBSURFACE

21 IMPROVEMENTS TO LAND AND THAT IS SUBJECT TO A.R.S.

22 TITLE 28, CHAPTER 19, 20 OR 22 OR A.R.S. TITLE 34, CHAPTER 2

23 OR 6 EVEN IF THE CONTRACT ALSO INCLUDES VERTICAL




Page 126
Attachment B
Amendments to the Phoenix City (Tax) Code
1 IMPROVEMENTS. IF A CITY OR TOWN IMPOSES A TAX ON

2 CONTRACTS THAT ARE SUBJECT TO PROCUREMENT

3 PROCESSES UNDER THOSE PROVISIONS, THE CITY OR TOWN

4 SHALL INCLUDE IN THE REQUEST FOR PROPOSALS A NOTICE

5 TO BIDDERS WHEN THOSE PROJECTS ARE SUBJECT TO THE

6 TAX. THIS SUBDIVISION DOES NOT APPLY TO CONTRACTS

7 WITH:

8 (i) COMMUNITY FACILITIES DISTRICTS, FIRE DISTRICTS,

9 COUNTY TELEVISION IMPROVEMENT DISTRICTS,

10 COMMUNITY PARK MAINTENANCE DISTRICTS, COTTON

11 PEST CONTROL DISTRICTS, HOSPITAL DISTRICTS, PEST

12 ABATEMENT DISTRICTS, HEALTH SERVICE DISTRICTS,

13 AGRICULTURAL IMPROVEMENT DISTRICTS, COUNTY

14 FREE LIBRARY DISTRICTS, COUNTY JAIL DISTRICTS,

15 COUNTY STADIUM DISTRICTS, SPECIAL HEALTH CARE

16 DISTRICTS, PUBLIC HEALTH SERVICES DISTRICTS,

17 THEME PARK DISTRICTS, REGIONAL ATTRACTION

18 DISTRICTS OR REVITALIZATION DISTRICTS.

19 (ii) ANY SPECIAL TAXING DISTRICT NOT SPECIFIED IN ITEM

20 (i) OF THIS SUBDIVISION IF THE DISTRICT DOES NOT

21 SUBSTANTIALLY ENGAGE IN THE MODIFICATION,

22 MAINTENANCE, REPAIR, REPLACEMENT OR




Page 127
Attachment B
Amendments to the Phoenix City (Tax) Code
1 ALTERATION OF SURFACE OR SUBSURFACE

2 IMPROVEMENTS TO LAND.

3 (13) THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM

4 A CONTRACT ENTERED INTO FOR THE CONSTRUCTION OF A MIXED

5 WASTE PROCESSING FACILITY THAT IS LOCATED ON A MUNICIPAL

6 SOLID WASTE LANDFILL AND THAT IS CONSTRUCTED FOR THE

7 PURPOSE OF RECYCLING SOLID WASTE OR PRODUCING RENEWABLE

8 ENERGY FROM LANDFILL WASTE. FOR THE PURPOSES OF THIS

9 PARAGRAPH:

10 (A) "MIXED WASTE PROCESSING FACILITY" MEANS A SOLID

11 WASTE FACILITY THAT IS OWNED, OPERATED OR USED FOR

12 THE TREATMENT, PROCESSING OR DISPOSAL OF SOLID

13 WASTE, RECYCLABLE SOLID WASTE, CONDITIONALLY

14 EXEMPT SMALL QUANTITY GENERATOR WASTE OR

15 HOUSEHOLD HAZARDOUS WASTE. FOR THE PURPOSES OF

16 THIS SUBDIVISION, "CONDITIONALLY EXEMPT SMALL

17 QUANTITY GENERATOR WASTE", "HOUSEHOLD HAZARDOUS

18 WASTE" AND "SOLID WASTE FACILITY" HAVE THE SAME

19 MEANINGS PRESCRIBED IN A.R.S. SECTION 49-701, EXCEPT

20 THAT SOLID WASTE FACILITY DOES INCLUDE A SITE THAT

21 STORES, TREATS OR PROCESSES PAPER, GLASS, WOOD,

22 CARDBOARD, HOUSEHOLD TEXTILES, SCRAP METAL, PLASTIC,




Page 128
Attachment B
Amendments to the Phoenix City (Tax) Code
1 VEGETATIVE WASTE, ALUMINUM, STEEL OR OTHER

2 RECYCLABLE MATERIAL.

3 (B) "MUNICIPAL SOLID WASTE LANDFILL" HAS THE SAME

4 MEANING PRESCRIBED IN A.R.S. SECTION 49-701.

5 (C) "RECYCLING" MEANS COLLECTING, SEPARATING, CLEANSING,

6 TREATING AND RECONSTITUTING RECYCLABLE SOLID WASTE

7 THAT WOULD OTHERWISE BECOME SOLID WASTE, BUT DOES

8 NOT INCLUDE INCINERATION OR OTHER SIMILAR PROCESSES.

9 (D) RENEWABLE ENERGY" HAS THE SAME MEANING PRESCRIBED

10 IN A.R.S. SECTION 41-1511.

11 (c) "Subcontractor" means a construction contractor performing work for either:

12 (1) a construction contractor who has provided the subcontractor with a written

13 declaration that he is liable for the tax for the project and has provided the

14 subcontractor his City Privilege License number.

15 (2) an owner-builder who has provided the subcontractor with a written declaration

16 that:

17 (A) the owner-builder is improving the property for sale; and

18 (B) the owner-builder is liable for the tax for such construction contracting

19 activity; and

20 (C) the owner-builder has provided the contractor his City Privilege License

21 number.




Page 129
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (3) a person selling new manufactured buildings who has provided the subcontractor

2 with a written declaration that he is liable for the tax for the site preparation and

3 set-up; and provided the subcontractor his City Privilege License number.

4 Subcontractor also includes a construction contractor performing work for another

5 subcontractor as defined above.


7 Section IV. Phoenix City Code Section 14-415.1 is adopted as follows, with an effective date

8 of January 1, 2015.


10 Sec. 14-415.1. LIABILITY FOR MRRA AMOUNTS, EQUAL TO RETAIL

11 TRANSACTION PRIVILEGE TAX DUE.

12 (A) PERSON THAT IS EITHER A PRIME CONTRACTOR SUBJECT TO TAX UNDER

13 SECTION 14-415 OR A SUBCONTRACTOR WORKING UNDER THE CONTROL

14 OF SUCH A PRIME CONTRACTOR, THAT PURCHASES TANGIBLE PERSONAL

15 PROPERTY, THE PURCHASE PRICE OF WHICH WAS EXCLUDED FROM THE

16 TAX BASE UNDER THE RETAIL CLASSIFICATION UNDER SECTION 14-465(K)

17 OR WAS EXCLUDED FROM THE USE TAX UNDER SECTION 14-660(K) AT THE

18 TIME OF PURCHASE, AND THAT INCORPORATES OR FABRICATES THE

19 TANGIBLE PERSONAL PROPERTY INTO A PROJECT DESCRIBED IN SECTION

20 14-415(B)(12) AND A.R.S. SECTION 42-5075, SUBSECTION O IS LIABLE FOR AN

21 AMOUNT EQUAL TO ANY TAX THAT A SELLER WOULD HAVE BEEN




Page 130
Attachment B
Amendments to the Phoenix City (Tax) Code
1 REQUIRED TO PAY UNDER SECTION 14-460 AND A.R.S. TITLE 42, CHAPTER 5

2 AS FOLLOWS:

3 (1) THE AMOUNT OF LIABILITY SHALL BE CALCULATED AND

4 REPORTED BASED ON THE LOCATION OF THE PROJECT AND THE

5 TAXES IMPOSED UNDER SECTION 14-460 AND A.R.S. TITLE 42,

6 CHAPTER 5.

7 (2) ALL DEDUCTIONS, EXEMPTIONS AND EXCLUSIONS FOR THE COST

8 OF TANGIBLE PERSONAL PROPERTY PROVIDED IN SECTION 14-415

9 APPLY TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED OR

10 FABRICATED INTO THE PROJECT.

11 (3) THIS SUBSECTION DOES NOT APPLY TO TANGIBLE PERSONAL

12 PROPERTY THAT IS INCORPORATED OR FABRICATED INTO ANY

13 PROJECT UNDER A CONTRACT THAT WOULD OTHERWISE BE

14 EXCLUDED FROM THE TAX BASE UNDER SECTION 14-415, WITHOUT

15 REGARD TO SECTION 14-415(B)(12).

16 (4) THE AMOUNT OF LIABILITY SHALL BE REPORTED WITHIN THE

17 REPORTING PERIOD THAT INCLUDES THE MONTH IN WHICH THE

18 PERSON INCORPORATES OR FABRICATES THE TANGIBLE PERSONAL

19 PROPERTY INTO THE PROJECT.

20 (5) THE PERSON IS NOT LIABLE FOR THE AMOUNT IF THE CONTRACTOR

21 WHO HIRED THE PERSON EXECUTES AND PROVIDES TO THE PERSON

22 A CERTIFICATE STATING THAT THE CONTRACTOR PROVIDING THE

23 CERTIFICATE IS LIABLE FOR ANY AMOUNT DUE UNDER THIS




Page 131
Attachment B
Amendments to the Phoenix City (Tax) Code
1 SUBSECTION. THE DEPARTMENT OF REVENUE SHALL PRESCRIBE

2 THE FORM OF THE CERTIFICATE. IF THE PERSON HAS REASON TO

3 BELIEVE THAT THE INFORMATION CONTAINED ON THE

4 CERTIFICATE IS ERRONEOUS OR INCOMPLETE, THE CITY MAY

5 DISREGARD THE CERTIFICATE. THE CONTRACTOR PROVIDING THE

6 CERTIFICATE IS LIABLE FOR THE AMOUNT THAT OTHERWISE

7 WOULD BE DUE FROM THE PERSON UNDER THIS SUBSECTION.

8 (B) PERSON THAT PURCHASED TANGIBLE PERSONAL PROPERTY, THE

9 PURCHASE PRICE OF WHICH WAS EXCLUDED FROM THE TAX BASE UNDER

10 SECTION 14-465(K) OR WAS EXCLUDED FROM THE USE TAX UNDER

11 SECTION 14-660(K) AT THE TIME OF PURCHASE, WHOSE TRANSACTION

12 PRIVILEGE TAX LICENSE HAS BEEN CANCELED AND THAT SUBSEQUENTLY

13 USES, CONSUMES, SELLS OR DISCARDS THE TANGIBLE PERSONAL

14 PROPERTY IS LIABLE FOR AN AMOUNT OF TAX DETERMINED UNDER THIS

15 SUBSECTION. FOR THE PURPOSES OF THIS SUBSECTION:

16 (1) IF THE TANGIBLE PERSONAL PROPERTY IS INCORPORATED OR

17 FABRICATED INTO A PROJECT DESCRIBED IN SECTION 14-415(B)(12)

18 AND A.R.S. SECTION 42-5075, SUBSECTION O, OR OTHERWISE USED

19 OR CONSUMED BY THE PERSON, THE AMOUNT OF LIABILITY SHALL

20 BE CALCULATED AND REPORTED BASED ON THE PERSON'S

21 PURCHASE PRICE OF THE TANGIBLE PERSONAL PROPERTY, THE

22 LOCATION OF THE PROJECT, USE OR CONSUMPTION AND THE TAXES

23 IMPOSED UNDER SECTION 14-460 AND A.R.S. TITLE 42, CHAPTER 5.




Page 132
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (2) IF THE TANGIBLE PERSONAL PROPERTY IS SOLD IN A MANNER THAT

2 IS NOT SUBJECT TO TAX UNDER THIS CHAPTER OR IS DISCARDED,

3 THE AMOUNT SHALL BE CALCULATED AND REPORTED BASED ON

4 THE PAYMENT RECEIVED BY THE PERSON, THE LOCATION OF THE

5 PERSON'S PRINCIPAL PLACE OF BUSINESS IN THIS STATE AND THE

6 TAXES IMPOSED UNDER SECTION 14-460 AND A.R.S. TITLE 42,

7 CHAPTER 5.

8 (3) THE PERSON IS NOT LIABLE UNDER THIS SUBSECTION FOR ANY

9 AMOUNT IF THE PERSON DISCARDS THE TANGIBLE PERSONAL

10 PROPERTY AND DOES NOT RECEIVE PAYMENT OF ANY KIND.

11 (4) THE AMOUNT OF LIABILITY SHALL BE REPORTED ON OR BEFORE

12 THE BUSINESS DAY PRECEDING THE LAST BUSINESS DAY OF THE

13 MONTH FOLLOWING THE MONTH IN WHICH THE PERSON USES THE

14 TANGIBLE PERSONAL PROPERTY IN A MANNER DESCRIBED IN

15 PARAGRAPH 1 OR 2 OF THIS SUBSECTION. NO AMOUNT IS DUE

16 UNDER THIS SUBSECTION AT ANY TIME THAT THE PERSON STORES

17 THE TANGIBLE PERSONAL PROPERTY WITHOUT USING IT IN A

18 MANNER DESCRIBED IN PARAGRAPH 1 OR 2 OF THIS SUBSECTION.

19 (5) ALL DEDUCTIONS, EXEMPTIONS AND EXCLUSIONS FOR THE COST

20 OF TANGIBLE PERSONAL PROPERTY PROVIDED IN SECTION 14-415

21 APPLY TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED OR

22 FABRICATED INTO A PROJECT DESCRIBED IN SECTION 14-415(B)(12)

23 AND A.R.S. SECTION 42-5075, SUBSECTION O.




Page 133
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (6) THIS SUBSECTION DOES NOT APPLY TO TANGIBLE PERSONAL

2 PROPERTY THAT IS INCORPORATED OR FABRICATED INTO ANY

3 PROJECT UNDER A CONTRACT THAT WOULD OTHERWISE BE

4 EXCLUDED FROM THE TAX BASE UNDER SECTION 14-415 AND A.R.S.

5 SECTION 42-5075, WITHOUT REGARD TO SECTION 14-415(B)(12) AND

6 A.R.S. SECTION 42-5075, SUBSECTION O.

7 (7) THE PERSON IS NOT LIABLE FOR THE AMOUNT IF THE CONTRACTOR

8 WHO HIRED THE PERSON EXECUTES AND PROVIDES TO THE PERSON

9 A CERTIFICATE STATING THAT THE CONTRACTOR PROVIDING THE

10 CERTIFICATE IS LIABLE FOR ANY AMOUNT DUE UNDER THIS

11 SUBSECTION FOR TANGIBLE PERSONAL PROPERTY INCORPORATED

12 OR FABRICATED INTO A PROJECT DESCRIBED IN A.R.S. SECTION 42-

13 5075, SUBSECTION O. THE DEPARTMENT SHALL PRESCRIBE THE

14 FORM OF THE CERTIFICATE. IF THE PERSON HAS REASON TO

15 BELIEVE THAT THE INFORMATION CONTAINED ON THE

16 CERTIFICATE IS ERRONEOUS OR INCOMPLETE, THE DEPARTMENT

17 MAY DISREGARD THE CERTIFICATE. THE CONTRACTOR PROVIDING

18 THE CERTIFICATE IS LIABLE FOR THE AMOUNT THAT OTHERWISE

19 WOULD BE DUE FROM THE PERSON UNDER THIS SUBSECTION.

20 (C) PERSON THAT FAILS TO REPORT OR PAY ANY AMOUNT DUE UNDER

21 SUBSECTION A OR B OF THIS SECTION IS LIABLE FOR INTEREST IN A

22 MANNER CONSISTENT WITH A.R.S. SECTION 42-1123 AND PENALTIES IN A

23 MANNER CONSISTENT WITH A.R.S. SECTION 42-1125.




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1 (D) IF A PERSON HAS PAID AN AMOUNT DESCRIBED IN THIS SECTION ON

2 TANGIBLE PERSONAL PROPERTY THAT THE PERSON REASONABLY

3 BELIEVED TO BE DESCRIBED UNDER SECTION 14-415(B)(12) AND A.R.S.

4 SECTION 42-5075, SUBSECTION O AND A FINAL DETERMINATION IS MADE

5 THAT SECTION 14-415(B)(12) AND A.R.S. SECTION 42-5075, SUBSECTION O

6 DOES NOT APPLY, THE PERSON IS ENTITLED TO AN OFFSET FOR THE

7 AMOUNT PAID UNDER THIS SECTION AGAINST THE AMOUNT OF TAX

8 LIABILITY ASSESSED UNDER THIS CHAPTER.


10 Section V. Phoenix City Code Section 14-422 is amended as follows, with an effective date

11 of December 1, 2017.


13 Sec. 14-422. Jet fuel sales.

14 (a) The tax rate shall be at an amount of 0.732 cents per gallon sold from the business

15 activity upon every person engaging or continuing in the business of selling jet fuel.

16 (1) Gallons sold includes all gallons sold, bartered, exchanged, included as part or

17 whole of a trade-out, or similar transactions regardless of the type or form of

18 payment.

19 (2) For purposes of this Section the following terms are substitutable in Articles III

20 and V of this chapter, and corresponding regulations:

21 (A) "gallons" for "gross income"




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Amendments to the Phoenix City (Tax) Code
1 (B) "gallon(s)" for "amount(s)".

2 (b) The burden of proving that a sale of jet fuel is not a taxable sale shall be upon the person

3 who made the sale.

4 (c) When this city and another Arizona city or town with an equivalent excise tax could

5 claim nexus for taxing a jet fuel sale, the city or town where the permanent business

6 location of the seller at which the order was received shall be deemed to have precedence,

7 and for the purposes of this chapter such city or town has sole and exclusive right to such

8 tax.

9 (d) The appropriate tax liability for any jet fuel sale where the order is received at a

10 permanent business location of the seller located in this city or in an Arizona city or town

11 that levies an equivalent excise tax shall be at the rate of the city or town of such seller's

12 location.

13 (E) THE APPLICATION OF THE TAX IS LIMITED TO AMOUNTS OF NOT MORE

14 THAN TEN MILLION GALLONS OF JET FUEL PURCHASED BY EACH

15 PURCHASER IN EACH CALENDAR YEAR. PURCHASES IN EXCESS OF TEN

16 MILLION GALLONS PER PURCHASER PER YEAR ARE EXEMPT.

17 (F) BEGINNING FROM AND AFTER NOVEMBER 30, 2017, THE REVENUES

18 GENERATED BY EACH PUBLIC AIRPORT MUST BE SEGREGATED IN

19 SEPARATE ACCOUNTS FOR THE EXCLUSIVE EXPENDITURE FOR THE

20 CAPITAL OR OPERATING COSTS OF THE AIRPORT, THE AIRPORT SYSTEM

21 OR OTHER LOCAL AIRPORT FACILITIES OWNED OR OPERATED BY THE




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 MUNICIPALITY AND DIRECTLY AND SUBSTANTIALLY RELATED TO THE

2 AIR TRANSPORTATION OF PASSENGERS OR PROPERTY.

3 (G) Exemptions. Notwithstanding Section 14-400(d), the exemptions in Section 14-465(a),

4 (b) and (d) through (z) will apply to sales of jet fuel taxed under this Section.


6 Section VI. Phoenix City Code Section 14-445 is amended as follows, with the following

7 effective dates per subsection: (d) & (k) January 1, 2018; (i) & Footnote January 1, 2012.

8 Sec. 14-445. Rental, leasing, and licensing for use of real property.

9 (a) The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the

10 gross income from the business activity upon every person engaging or continuing in the

11 business of leasing or renting real property located within the City for a consideration, to

12 the tenant in actual possession, or the licensing for use of real property to the final

13 licensee located within the City for a consideration including any improvements, rights,

14 or interest in such property; provided further that:

15 (1) Payments made by the lessee to, or on behalf of, the lessor for property taxes,

16 repairs, or improvements are considered to be part of the taxable gross income.

17 (2) Charges for such items as telecommunications, utilities, pet fees, or maintenance

18 are considered to be part of the taxable gross income.

19 (3) However, if the lessor engages in telecommunication activity, as evidenced by

20 installing individual metering equipment and by billing each tenant based upon

21 actual usage, such activity is taxable under Section 14-470.




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Amendments to the Phoenix City (Tax) Code
1 (b) If individual utility meters have been installed for each tenant and the lessor separately

2 charges each single tenant for the exact billing from the utility company, such charges are

3 exempt.

4 (c) Charges by a qualifying hospital, qualifying community health center or a qualifying

5 health care organization to patients of such facilities for use of rooms or other real

6 property during the course of their treatment by such facilities are exempt.

7 (d) Charges for joint pole usage by a person engaged in the business of providing or

8 furnishing utility or telecommunication services OR THAT IS A CABLE OPERATOR,

9 OR CHARGES FOR JOINT POLE USAGE to A person engaged in the business of

10 providing or furnishing utility or telecommunication services OR THAT IS A CABLE

11 OPERATOR are exempt from the tax imposed by this Section. “CABLE OPERATOR”

12 HAS THE SAME MEANING AS PRESCRIBED BY A.R.S. SECTION 9-505.

13 (e) Exempt from the tax imposed by this Section is gross income derived from the rental,

14 leasing, or licensing for use of real property to a qualifying hospital, qualifying

15 community health center or a qualifying health care organization, except when the

16 property so rented, leased, or licensed is for use in activities resulting in gross income

17 from unrelated business income as that term is defined in 26 U.S.C. Section 512.

18 (f) A person who has less than three (3) apartments, houses, trailer spaces, or other lodging

19 spaces rented, leased or licensed or available for rent, lease, or license within the State

20 and no units of commercial property for rent, lease, or license within the State, is not

21 deemed to be in the rental business, and is therefore exempt from the tax imposed by this

22 Section on such income. However, a person who has one (1) or more units of commercial




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 property is subject to the tax imposed by this Section on rental, lease and license income

2 from all such lodging spaces and commercial units of real estate even though said person

3 may have fewer than three (3) lodging spaces.

4 (g) (Reserved)

5 (h) (Reserved)

6 (i) EXEMPT FROM THE TAX IMPOSED BY THIS SECTION IS THE GROSS INCOME

7 DERIVED FROM PAYMENTS MADE PURSUANT TO A LIFE CARE CONTRACT

8 BY A RESIDENT TO A PROVIDER THAT HOLDS A PERMIT TO ENTER INTO

9 LIFE CARE CONTRACTS ISSUED BY THE ARIZONA DEPARTMENT OF

10 INSURANCE. FOR THE PURPOSES OF THIS PARAGRAPH, "LIFE CARE

11 CONTRACT", "PROVIDER" AND "RESIDENT" HAVE THE SAME MEANINGS

12 PRESCRIBED IN A.R.S. SECTION 20-1801.

13 (j) Exempt from the tax imposed by this Section is gross income derived from the activities

14 taxable under Section 14-444 of this code.

15 (k) LEASING OR RENTING REAL PROPERTY OR THE RIGHT TO USE REAL

16 PROPERTY AT EXHIBITION EVENTS IN THIS STATE SPONSORED, OPERATED

17 OR CONDUCTED BY A NONPROFIT ORGANIZATION THAT IS EXEMPT FROM

18 TAXATION UNDER SECTION 501(C)(3), 501(C)(4) OR 501(C)(6) OF THE

19 INTERNAL REVENUE CODE IF THE ORGANIZATION IS ASSOCIATED WITH

20 MAJOR LEAGUE BASEBALL TEAMS OR A NATIONAL TOURING

21 PROFESSIONAL GOLFING ASSOCIATION AND NO PART OF THE

22 ORGANIZATION'S NET EARNINGS INURES TO THE BENEFIT OF ANY




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Amendments to the Phoenix City (Tax) Code
1 PRIVATE SHAREHOLDER OR INDIVIDUAL. THIS PARAGRAPH DOES NOT

2 APPLY TO AN ORGANIZATION THAT IS OWNED, MANAGED OR

3 CONTROLLED, IN WHOLE OR IN PART, BY A MAJOR LEAGUE BASEBALL

4 TEAM, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS, OR BY A

5 MAJOR LEAGUE BASEBALL ASSOCIATION OR PROFESSIONAL GOLFING

6 ASSOCIATION, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS,

7 UNLESS THE ORGANIZATION CONDUCTED OR OPERATED EXHIBITION

8 EVENTS IN THIS STATE BEFORE JANUARY 1, 2018 THAT WERE EXEMPT

9 FROM TAXATION UNDER A.R.S. SECTION 42-5073.

10 (l) (Reserved)

11 (m) (Reserved)

12 (n) Notwithstanding the provisions of Section 14-200(b), the fair market value of one (1)

13 apartment, in an apartment complex provided rent free to an employee of the apartment

14 complex is not subject to the tax imposed by this Section. For an apartment complex with

15 more than fifty (50) units, an additional apartment provided rent free to an employee for

16 every additional fifty (50) units is not subject to the tax imposed by this Section.

17 (o) Income derived from incarcerating or detaining prisoners who are under the jurisdiction

18 of the United States, this State or any other state or a political subdivision of this State or

19 of any other state in a privately-operated prison, jail or detention facility is exempt from

20 the tax imposed by this Section.




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Amendments to the Phoenix City (Tax) Code
1 (p) Charges by any hospital, any licensed nursing care institution, or any kidney dialysis

2 facility to patients of such facilities for the use of rooms or other real property during the

3 course of their treatment by such facilities are exempt.

4 (q) Charges to patients receiving "personal care" or "directed care", by any licensed assisted

5 living facility, licensed assisted living center or licensed assisted living home as defined

6 and licensed pursuant to Chapter 4 Title 36 Arizona Revised Statutes and Title 9 of the

7 Arizona Administrative Code are exempt.

8 (r) Income received from the rental of any "low-income unit" as established under Section

9 42 of the Internal Revenue Code, including the low-income housing credit provided by

10 IRC Section 42, to the extent that the collection of tax on rental income causes the "gross

11 rent" defined by IRC Section 42 to exceed the income limitation for the low-income unit

12 is exempt. This exemption also applies to income received from the rental of individual

13 rental units subject to statutory or regulatory "low-income unit" rent restrictions similar to

14 IRC Section 42 to the extent that the collection of tax from the tenant causes the rental

15 receipts to exceed a rent restriction for the low-income unit. This subsection also applies

16 to rent received by a person other than the owner or lessor of the low-income unit,

17 including a broker. This subsection does not apply unless a taxpayer maintains the

18 documentation to support the qualification of a unit as a low-income unit, the "gross rent"

19 limitation for the unit and the rent received from that unit.

20 (s) The gross proceeds of a commercial lease of real property between affiliated companies,

21 businesses, persons or reciprocal insurers are exempt. For the purposes of this paragraph:




Page 141
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (1) "affiliated companies, businesses, persons or reciprocal insurers" means the lessor

2 holds a controlling interest in the lessee, the lessee holds a controlling interest in

3 the lessor, an affiliated entity holds a controlling interest in both the lessor and the

4 lessee or an unrelated person holds a controlling interest in both the lessor and

5 lessee.

6 (2) "controlling interest" means direct or indirect ownership of at least eighty (80) per

7 cent of the voting shares of a corporation or of the interests in a company,

8 business or person other than a corporation.

9 (3) "reciprocal insurer" has the same meaning as prescribed in A.R.S. Section 20-762

10 Arizona Revised Statutes.


12 FOOTNOTE TO SECTION 14-445. Retroactivity; refunds; nonseverability pertaining to

13 Section 445.

14 A. The transaction privilege tax exemption for gross income derived from payments made

15 pursuant to a life care contract by a resident to a provider as provided in Model City Tax

16 Code Section 445(i) applies retroactively to taxable periods beginning from and after

17 January 1, 2012.

18 B. Any claim for refund of transaction privilege tax based on the retroactive application of

19 Model City Tax Code Section 445(i) shall be submitted to the Department of Revenue on

20 or before December 31, 2019, pursuant to section 42-1118, Arizona Revised Statutes. A

21 failure to file a claim on or before December 31, 2019 constitutes a waiver of the claim

22 for refund under this section.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 C. The burden is on the taxpayer to establish by competent evidence the amount of tax paid

2 for all taxable periods and the amount, if any, attributable to gross income derived from

3 payments made pursuant to a life care contract by a resident to a provider that qualify for

4 exemption under the amendment to Model City Tax Code Section 445, as provided by

5 this act. The Department of Revenue shall:

6 1. Review all timely filed claims.

7 2. Determine, on audit if necessary, the correct amount of each claim.

8 3. Notify the taxpayer of its determination. The notice is final unless a taxpayer

9 appeals in the manner provided in section 42-1251, Arizona Revised Statutes.

10 D. Notwithstanding section 42-1119, Arizona Revised Statutes, the Department of Revenue

11 may not make a refund until after determination of the amount of all refund claims filed

12 pursuant to this section. If a taxpayer appeals the Department's determination, the

13 Department, pursuant to the rules protecting confidentiality under Title 42, Chapter 2,

14 Article 1, Arizona Revised Statutes, may notify other taxpayers who have filed claims as

15 to the nature of any delay and, if possible, estimate the possible extent of the delay.

16 E. The aggregate amount of refunds under this section may not exceed ten thousand dollars

17 ($10,000). If the aggregate amount of claims under this section that are ultimately

18 determined to be correct exceeds ten thousand dollars, the Department of Revenue shall

19 reduce each claim proportionately so that the total refund amount equals ten thousand

20 dollars.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 F. Interest may not be allowed or compounded on any refundable amount if paid before July

2 1, 2020, but if the amount cannot be determined or paid until after June 30, 2020, interest

3 accrues from and after July 1, 2020 under section 42-1123, Arizona Revised Statutes.

4 G. If any part of this section is finally adjudicated to be invalid, this entire section is void.

5 The provisions of this section are intended to be nonseverable.


7 Section VII. Phoenix City Code Section 14-450 is amended as follows, with an effective

8 date of August 1, 2015.


10 Sec. 14-450. Rental, leasing, and licensing for use of tangible personal property.


12 (a) The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the

13 gross income from the business activity upon every person engaging or continuing in the

14 business of leasing, licensing for use, or renting tangible personal property for a

15 consideration, including that which is semi-permanently or permanently installed within

16 the City as provided by Regulation.

17 (b) Special provisions relating to long-term motor vehicle leases. A lease transaction

18 involving a motor vehicle for a minimum period of twenty-four (24) months shall be

19 considered to have occurred at the location of the motor vehicle dealership, rather than

20 the location of the place of business of the lessor, even if the lessor's interest in the lease

21 and its proceeds are sold, transferred, or otherwise assigned to a lease financing




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 institution; provided further that the city or town where such motor vehicle dealership is

2 located levies a Privilege Tax or an equivalent excise tax upon the transaction.

3 (c) Gross income derived from the following transactions shall be exempt from Privilege

4 Taxes imposed by this Section:

5 (1) rental, leasing, or licensing for use of tangible personal property to persons

6 engaged or continuing in the business of leasing, licensing for use, or rental of

7 such property.

8 (2) rental, leasing, or licensing for use of tangible personal property that is semi-

9 permanently or permanently installed within another city or town that levies an

10 equivalent excise tax on the transaction.

11 (3) rental, leasing, or licensing for use of film, tape, or slides to a theater or other

12 person taxed under Section 14-410, or to a radio station, television station, or

13 subscription television system.

14 (4) rental, leasing, or licensing for use of the following:

15 (A) prosthetics.

16 (B) income-producing capital equipment.

17 (C) mining and metallurgical supplies.

18 These exemptions include the rental, leasing, or licensing for use of tangible

19 personal property which, if it had been purchased instead of leased, rented, or

20 licensed by the lessee or licensee, would qualify as income-producing capital

21 equipment or mining and metallurgical supplies.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (5) rental, leasing, or licensing for use of tangible personal property to a qualifying

2 hospital, qualifying community health center or a qualifying health care

3 organization, except when the property so rented, leased, or licensed is for use in

4 activities resulting in gross income from unrelated business income as that term is

5 defined in 26 U.S.C. Section 512 or rental, leasing, or licensing for use of tangible

6 personal property in this State by a nonprofit charitable organization that has

7 qualified under Section 501(c)(3) of the United States Internal Revenue Code and

8 that engages in and uses such property exclusively for training, job placement or

9 rehabilitation programs or testing for mentally or physically handicapped persons.

10 (6) separately billed charges for delivery, installation, repair, and/or maintenance as

11 provided by Regulation.

12 (7) charges for joint pole usage by a person engaged in the business of providing or

13 furnishing utility or telecommunication services OR THAT IS A CABLE

14 OPERATOR, OR CHARGES FOR JOINT POLE USAGE to A person engaged

15 in the business of providing or furnishing utility or telecommunication services

16 OR THAT IS A CABLE OPERATOR. “CABLE OPERATOR” HAS THE

17 SAME MEANING AS PRESCRIBED BY A.R.S. SECTION 9-505.

18 (8) the gross income from coin-operated washing, drying, and dry cleaning machines,

19 or from coin-operated car washing machines. This exemption shall not apply to

20 suppliers or distributors renting, leasing, or licensing for use of such equipment to

21 persons engaged in the operation of coin-operated washing, drying, dry cleaning,

22 or car washing establishments.




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Amendments to the Phoenix City (Tax) Code
1 (9) rental, leasing, or licensing of aircraft that would qualify as aircraft acquired for

2 use outside the State, as prescribed by Regulation, if such rental, leasing, or

3 licensing had been a sale.

4 (10) rental, leasing and licensing for use of an alternative fuel vehicle if such vehicle

5 was manufactured as a diesel fuel vehicle and converted to operate on alternative

6 fuel and equipment that is installed in a conventional diesel fuel motor vehicle to

7 convert the vehicle to operate on an alternative fuel, as defined in A.R.S. Section

8 1-215.

9 (11) rental, leasing, and licensing for use of solar energy devices, for taxable periods

10 beginning from and after July 1, 2008. The lessor shall register with the

11 Department of Revenue as a solar energy retailer. By registering, the lessor

12 acknowledges that it will make its books and records relating to leases of solar

13 energy devices available to the Department of Revenue and City, as applicable,

14 for examination.

15 (12) leasing or renting certified ignition interlock devices installed pursuant to the

16 requirements prescribed by A.R.S. Section 28-1461. For the purposes of this

17 paragraph, "certified ignition interlock device" has the same meaning prescribed

18 in A.R.S. Section 28-1301.


20 Section VIII. Phoenix City Code Section 14-455 is amended as follows with the following

21 effective dates per subsection: (f) January 1, 2015; (g) January 1, 2018; (h) August 3, 2018.





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Attachment B
Amendments to the Phoenix City (Tax) Code
1 Sec. 14-455. Restaurants and Bars.


3 (a) The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the

4 gross income from the business activity upon every person engaging or continuing in the

5 business of preparing or serving food or beverage in a bar, cocktail lounge, restaurant, or

6 similar establishment where articles of food or drink are prepared or served for

7 consumption on or off the premises, including also the activity of catering. Cover charges

8 and minimum charges must be included in the gross income of this business activity.

9 (b) Caterers and other taxpayers subject to the tax who deliver food and/or serve such food

10 off premises, shall also be allowed to exclude separately charged delivery, set-up, and

11 clean-up charges, provided that the charges are also maintained separately in the books

12 and records. When a taxpayer delivers food and/or serves such food off premises, his

13 regular business location shall still be deemed the location of the transaction for the

14 purposes of the tax imposed by this Section.

15 (c) The tax imposed by this Section shall not apply to sales to a qualifying hospital,

16 qualifying community health center or a qualifying health care organization, except when

17 sold for use in activities resulting in gross income from unrelated business income as that

18 term is defined in 26 U.S.C. Section 512.

19 (d) The tax imposed by this Section shall not apply to sales of food, beverages, condiments

20 and accessories used for serving food and beverages to a commercial airline, as defined

21 in A.R.S. SECTION 42-5061, that serves the food and beverages to its passengers,

22 without additional charge, for consumption in flight.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (e) The tax imposed by this Section shall not apply to sales of prepared food, beverages,

2 condiments or accessories to a public educational entity, pursuant to any of the provisions

3 of Title 15, Arizona Revised Statutes, to the extent such items are to be prepared or

4 served to individuals for consumption on the premises of a public educational entity

5 during school hours.

6 (F) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO SALES OF LOW

7 OR REDUCED COST ARTICLES OF FOOD OR DRINK TO ELIGIBLE ELDERLY

8 OR HOMELESS PERSONS OR PERSONS WITH A DISABILITY BY A BUSINESS

9 SUBJECT TO TAX UNDER A.R.S. SECTION 42-5074 THAT CONTRACTS WITH

10 THE DEPARTMENT OF ECONOMIC SECURITY AND THAT IS APPROVED BY

11 THE FOOD AND NUTRITION SERVICE OF THE UNITED STATES

12 DEPARTMENT OF AGRICULTURE PURSUANT TO THE SUPPLEMENTAL

13 NUTRITION ASSISTANCE PROGRAM ESTABLISHED BY THE FOOD AND

14 NUTRITION ACT OF 2008 (P.L. 110-246; 122 STAT. 1651; 7 UNITED STATES

15 CODE SECTIONS 2011 THROUGH 2036a), IF THE PURCHASES ARE MADE

16 WITH THE BENEFITS ISSUED PURSUANT TO THE SUPPLEMENTAL

17 NUTRITION ASSISTANCE PROGRAM.

18 (G) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO SALES BY A

19 NONPROFIT ORGANIZATION THAT IS EXEMPT FROM TAXATION UNDER

20 SECTION 501(C)(3), 501(C)(4) OR 501(C)(6) OF THE INTERNAL REVENUE CODE

21 IF THE ORGANIZATION IS ASSOCIATED WITH A MAJOR LEAGUE BASEBALL

22 TEAM OR A NATIONAL TOURING PROFESSIONAL GOLFING ASSOCIATION

23 AND NO PART OF THE ORGANIZATION'S NET EARNINGS INURES TO THE




Page 149
Attachment B
Amendments to the Phoenix City (Tax) Code
1 BENEFIT OF ANY PRIVATE SHAREHOLDER OR INDIVIDUAL. THIS

2 PARAGRAPH DOES NOT APPLY TO AN ORGANIZATION THAT IS OWNED,

3 MANAGED OR CONTROLLED, IN WHOLE OR IN PART, BY A MAJOR LEAGUE

4 BASEBALL TEAM, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS, OR

5 BY A MAJOR LEAGUE BASEBALL ASSOCIATION OR PROFESSIONAL

6 GOLFING ASSOCIATION, OR ITS OWNERS, OFFICERS, EMPLOYEES OR

7 AGENTS, UNLESS THE ORGANIZATION CONDUCTED OR OPERATED

8 EXHIBITION EVENTS IN THIS STATE BEFORE JANUARY 1, 2018 THAT WERE

9 EXEMPT FROM TAXATION UNDER A.R.S. SECTION 42-5073.

10 (H) IF A CITY, TOWN OR OTHER TAXING JURISDICTION IMPOSES A

11 TRANSACTION PRIVILEGE, SALES, USE, FRANCHISE OR OTHER SIMILAR

12 TAX OR FEE, HOWEVER DENOMINATED, ON THE SALE OF FOOD ITEMS

13 INTENDED FOR HUMAN CONSUMPTION AS DEFINED BY RULE ADOPTED

14 PURSUANT TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY A.R.S.

15 SECTION 42-5106, SUBSECTION D FOR CONSUMPTION ON THE PREMISES,

16 THE TAX MUST BE APPLIED UNIFORMLY WITH RESPECT TO ALL FOOD

17 ITEMS, AND AN ADDITIONAL TAX OR FEE DIFFERENTIAL MAY NOT BE

18 ASSESSED OR APPLIED WITH RESPECT TO ANY SPECIFIC FOOD ITEM.

19 (I) For the purposes of this Section, "accessories" means paper plates, plastic eating utensils,

20 napkins, paper cups, drinking straws, paper sacks or other disposable containers, or other

21 items which facilitate the consumption of the food.





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Attachment B
Amendments to the Phoenix City (Tax) Code
1 Section IX. Phoenix City Code Section 14-462 is amended as follows, with an effective date

2 of January 1, 2015, except new subsection (f) which has an effective date of August 3, 2018.


4 Sec. 14-462. Retail sales: food for home consumption.


6 (a) The tax rate shall be at an amount equal to zero percent (0%) of the gross income from

7 the business activity upon every person engaging or continuing in the business of selling

8 food for home consumption at retail.

9 (b) For the purposes of this Section only, the following definitions shall be applicable:

10 (1) "Eligible grocery business" means an establishment THAT IS DEEMED

11 ELIGIBLE TO PARTICIPATE IN THE SUPPLEMENTAL NUTRITION

12 ASSISTANCE PROGRAM ESTABLISHED BY THE FOOD AND

13 NUTRITION ACT OF 2008 (P.L. 110-246; 122 STAT. 1651; 7 UNITED

14 STATES CODE SECTIONS 2011 THROUGH 2036A) BY THE UNITED

15 STATES DEPARTMENT OF AGRICULTURE FOOD AND NUTRITION

16 SERVICE OR AN ESTABLISHMENT THAT PROVES TO THE

17 SATISFACTION OF THE DEPARTMENT OF REVENUE THAT, BASED ON

18 THE NATURE OF THE ESTABLISHMENT'S FOOD SALES, COULD BE

19 ELIGIBLE TO PARTICIPATE IN THE SUPPLEMENTAL NUTRITION

20 ASSISTANCE PROGRAM ESTABLISHED BY THE FOOD AND

21 NUTRITION ACT OF 2008 whose sales of food are such that it is eligible to

22 participate in the Food Stamp Program established by the Food Stamp Act of




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 1977 (P.L. 95-113; 91 Stat. 958.7 U.S.C. Section 2011 et seq.), according to

2 regulations in effect on January 1, 1979. An establishment is deemed eligible to

3 participate in the Food Stamp Program if it is authorized to participate in the

4 program by the United States Department of Agriculture Food and Nutrition

5 Service Field Office on the effective date of the ordinance codified in this section,

6 or if, prior to a reporting period for which the return is filed, such retailer proves

7 to the satisfaction of the tax collector that the establishment, based on the nature

8 of the retailer’s food sales, could be eligible to participate in the Food Stamp

9 Program established by the Food Stamp Act of 1977 according to regulations in

10 effect on January 1, 1979.

11 (2) "Facilities for the consumption of food" means tables, chairs, benches, booths,

12 stools, counters, and similar conveniences, trays, glasses, dishes, or other

13 tableware and parking areas for the convenience of in-car consumption of food in

14 or on the premises on which the retailer conducts business.

15 (3) "Food for consumption on the premises” means any of the following:

16 (A) "Hot prepared food" as defined below.

17 (B) Hot or cold sandwiches.

18 (C) Food served by an attendant to be eaten at tables, chairs, benches, booths,

19 stools, counters, and similar conveniences and within parking areas for the

20 convenience of in-car consumption of food.

21 (D) Food served with trays, glasses, dishes, or other tableware.




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1 (E) Beverages sold in cups, glasses, or open containers.

2 (F) Food sold by caterers.

3 (G) Food sold within the premises of theatres, movies, operas, shows of any

4 type or nature, exhibitions, concerts, carnivals, circuses, amusement parks,

5 fairs, races, contests, games, athletic events, rodeos, billiard and pool

6 parlors, bowling alleys, public dances, dance halls, boxing, wrestling and

7 other matches, and any business which charges admission, entrance, or

8 cover fees for exhibition, amusement, entertainment, or instruction.

9 (H) Any items contained in subsections (a)(3)(A) through (G) above even

10 though they are sold on a "take-out" or "to go" basis, and whether or not

11 the item is packaged, wrapped, or is actually taken from the premises.

12 (4) "Hot prepared food" means those products, items, or ingredients of food which

13 are prepared and intended for consumption in a heated condition. "Hot prepared

14 food" includes a combination of hot and cold food items or ingredients if a single

15 price has been established.

16 (5) "Premises" means the total space and facilities in or on which a vendor conducts

17 business and which are owned or controlled, in whole or in part, by a vendor or

18 which are made available for the use of customers of the vendor or group of

19 vendors, including any building or part of a building, parking lot, or grounds.

20 (6) "Food for home consumption" means all food, except food for consumption on

21 the premises, if sold by any of the following:




Page 153
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (A) An eligible grocery business.

2 (B) A person who conducts a business whose primary business is not the sale

3 of food but who sells food which is displayed, packaged, and sold in a

4 similar manner as an eligible grocery business.

5 (C) A person who sells food and does not provide or make available any

6 facilities for the consumption of food on the premises.

7 (D) A person who conducts a delicatessen business either from a counter

8 which is separate from the place and cash register where taxable sales are

9 made or from a counter which has two cash registers and which are used

10 to record taxable and tax exempt sales, or a retailer who conducts a

11 delicatessen business who uses a cash register which has at least two tax

12 computing keys which are used to record taxable and tax exempt sales.

13 (E) Vending machines and other types of automatic retailers.

14 (F) A person’s sales of food, drink and condiment for consumption within the

15 premises of any prison, jail or other institution under the jurisdiction of the

16 state department of corrections, the department of public safety, the

17 department of juvenile corrections or a county sheriff.

18 (c) Income derived from the following sources is exempt from the tax imposed by this

19 Section:

20 (1) Sales of food for home consumption to a person regularly engaged in the business

21 of selling such property.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (2) Out-of-city sales or out-of-state sales.

2 (3) Charges for delivery or other “direct customer services” as prescribed by

3 regulation.

4 (4) Food purchased UNDER THE SUPPLEMENTAL NUTRITION ASSISTANCE

5 PROGRAM (SNAP) ESTABLISHED BY THE FOOD AND NUTRITION ACT

6 OF 2008 (P.L. 110-246; 122 STAT. 1651; 7 UNITED STATES CODE

7 SECTIONS 2011 THROUGH 2036A) BY THE UNITED STATES

8 DEPARTMENT OF AGRICULTURE FOOD AND NUTRITION SERVICE but

9 only to the extent that SNAP BENEFITS USING AN ELECTRONIC BENEFITS

10 TRANSFER (EBT) CARD OR OTHER METHOD OF CONVEYING SNAP

11 BENEFITS WAS actually used to purchase such food.

12 (5) Sales of food products by producers as provided for by A.R.S. Sections 3-561, 3-

13 562 and 3-563.

14 (6) Sales of food, beverages, condiments and accessories to a public educational

15 entity, pursuant to any of the provisions of Title 15, Arizona Revised Statutes,

16 including a regularly organized private or parochial school that offers an

17 educational program for grade twelve or under which may be attended in

18 substitution for a public school pursuant to A.R.S. Section 15-802 ; to the extent

19 such items are to be prepared or served to individuals for consumption on the

20 premises of a public educational entity during school hours. for the purposes of

21 this subsection, "accessories" means paper plates, plastic eating utensils, napkins,




Page 155
Attachment B
Amendments to the Phoenix City (Tax) Code
1 paper cups, drinking straws, paper sacks or other disposable containers, or other

2 items which facilitate the consumption of the food.

3 (7) Sales of food, beverages, condiments and accessories to a nonprofit charitable

4 organization that has qualified as an exempt organization under 26 U.S.C. Section

5 501(c)(3) and regularly serves meals to the needy and indigent on a continuing

6 basis at no cost. for the purposes of this subsection, "accessories" means paper

7 plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or

8 other disposable containers, or other items which facilitate the consumption of the

9 food.

10 (d) Reporting. such persons who sell food for home consumption shall, in conjunction with

11 the return required pursuant to Section 14-520, report to the tax collector in a manner

12 prescribed by the tax collector all sales of food for home consumption exempted from

13 taxes imposed by this Chapter.

14 (e) Recordkeeping.

15 (1) Retailers shall maintain accurate, verifiable, and complete records of all purchases

16 and sales of tangible personal property in order to verify exemptions from taxes

17 imposed by this chapter. A retailer may use any method of reporting that properly

18 reflects all purchases and sales of food for home consumption, as well as all

19 purchases and sales of items subject to taxes imposed by this Chapter, provided

20 that such records are maintained in accordance with Article III, and regulations of

21 the tax collector.




Page 156
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (2) Any person who fails to maintain records as provided herein shall be deemed to

2 have had no sales of food for home consumption, and if upon request by the tax

3 collector, a person cannot demonstrate to the tax collector that such records and

4 reports do properly reflect all sales of food for home consumption, the tax

5 collector may recompute the amount of tax to be paid as provided in Sections 14-

6 370 and 14-545(b).

7 (F) IF A CITY, TOWN OR OTHER TAXING JURISDICTION IMPOSES A

8 TRANSACTION PRIVILEGE, SALES, USE, FRANCHISE OR OTHER SIMILAR

9 TAX OR FEE, HOWEVER DENOMINATED, ON THE SALE OF FOOD ITEMS

10 INTENDED FOR HUMAN CONSUMPTION AS DEFINED BY RULE ADOPTED

11 PURSUANT TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY A.R.S.

12 SECTION 42-5106, SUBSECTION D FOR HOME CONSUMPTION, THE TAX

13 MUST BE APPLIED UNIFORMLY WITH RESPECT TO ALL FOOD, AND AN

14 ADDITIONAL TAX OR FEE DIFFERENTIAL MAY NOT BE ASSESSED OR

15 APPLIED WITH RESPECT TO ANY SPECIFIC FOOD ITEM.


17 Section X. Phoenix City Code Section 14-465 is amended as follows, with the following

18 effective dates per subsection: (k) January 1, 2015; (v) August 6, 2016; (y) January 1, 2018;

19 (ss) July 24, 2014; (tt) September 1, 2016; (uu) September 12, 2013; (vv) August 3, 2018;

20 (ww) August 3, 2018.


22 Sec. 14-465. Retail sales: exemptions.




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Attachment B
Amendments to the Phoenix City (Tax) Code

2 Income derived from the following sources is exempt from the tax imposed by Section 14-460:

3 (a) sales of tangible personal property to a person regularly engaged in the business of selling

4 such property.

5 (b) out-of-City sales or out-of-State sales.

6 (c) charges for delivery, installation, or other direct customer services as prescribed by

7 Regulation.

8 (d) charges for repair services as prescribed by Regulation, when separately charged and

9 separately maintained in the books and records of the taxpayer.

10 (e) sales of warranty, maintenance, and service contracts, when separately charged and

11 separately maintained in the books and records of the taxpayer.

12 (f) sales of prosthetics.

13 (g) sales of income-producing capital equipment.

14 (h) sales of rental equipment and rental supplies.

15 (i) sales of mining and metallurgical supplies.

16 (j) sales of motor vehicle fuel and use fuel which are subject to a tax imposed under the

17 provisions of Article I or II, Chapter 16, Title 28, Arizona Revised Statutes; or sales of

18 use fuel to a holder of a valid single trip use fuel tax permit issued under A.R.S. Section

19 28-5739, or sales of natural gas or liquefied petroleum gas used to propel a motor vehicle.

20 (k) sales of tangible personal property to:




Page 158
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (1) a construction contractor who holds a valid Privilege Tax License for engaging or

2 continuing in the business of construction contracting where the tangible personal

3 property sold is incorporated into any structure or improvement to real property as

4 part of construction contracting activity.

5 (2) A PERSON THAT IS NOT SUBJECT TO TAX UNDER SECTION 415(B)(12)

6 AND THAT HAS BEEN PROVIDED A COPY OF A CERTIFICATE UNDER

7 A.R.S. SECTION 42-5009, SUBSECTION L, IF THE PROPERTY SO SOLD IS

8 INCORPORATED OR FABRICATED BY THE PERSON INTO THE REAL

9 PROPERTY, STRUCTURE, PROJECT, DEVELOPMENT OR

10 IMPROVEMENT DESCRIBED IN THE CERTIFICATE.

11 (l) sales of motor vehicles to nonresidents of this State for use outside this State if the vendor

12 ships or delivers the motor vehicle to a destination outside this State.

13 (m) sales of tangible personal property which directly enters into and becomes an ingredient

14 or component part of a product sold in the regular course of the business of job printing,

15 manufacturing, or publication of newspapers, magazines, or other periodicals. Tangible

16 personal property which is consumed or used up in a manufacturing, job printing,

17 publishing, or production process is not an ingredient nor component part of a product.

18 (n) sales made directly to the Federal government to the extent of:

19 (1) one hundred percent (100%) of the gross income derived from retail sales made

20 by a manufacturer, modifier, assembler, or repairer.

21 (2) fifty percent (50%) of the gross income derived from retail sales made by any

22 other person.




Page 159
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (o) sales to hotels, bars, restaurants, dining cars, lunchrooms, boarding houses, or similar

2 establishments of articles consumed as food, drink, or condiment, whether simple, mixed,

3 or compounded, where such articles are customarily prepared or served to patrons for

4 consumption on or off the premises, where the purchaser is properly licensed and paying

5 a tax under Section 14-455 or the equivalent excise tax upon such income.

6 (p) sales of tangible personal property to a qualifying hospital, qualifying community health

7 center or a qualifying health care organization, except when the property sold is for use in

8 activities resulting in gross income from unrelated business income as that term is

9 defined in 26 U.S.C. Section 512 or sales of tangible personal property purchased in this

10 State by a nonprofit charitable organization that has qualified under Section 501(c)(3) of

11 the United States Internal Revenue Code and that engages in and uses such property

12 exclusively for training, job placement or rehabilitation programs or testing for mentally

13 or physically handicapped persons.

14 (q) (Reserved) (see Mesa city page).

15 (r) sales of the following to persons engaging or continuing in the business of farming,

16 ranching, or feeding livestock, poultry or ratites:

17 (1) seed, fertilizer, fungicides, seed treating chemicals, and other similar chemicals.

18 (2) feed for livestock, poultry or ratites, including salt, vitamins, and other additives

19 to such feed.

20 (3) livestock, poultry or ratites purchased or raised for slaughter, but not including

21 livestock purchased or raised for production or use, such as milch cows, breeding

22 bulls, laying hens, riding or work horses.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (4) (Reserved)

2 This exemption shall not be construed to include machinery, equipment, fuels, lubricants,

3 pharmaceuticals, repair and replacement parts, or other items used or consumed in the

4 running, maintenance, or repair of machinery, equipment, buildings, or structures used or

5 consumed in the business of farming, ranching, or feeding of livestock, poultry or ratites.

6 (s) sales of groundwater measuring devices required by A.R.S. Section 45-604.

7 (t) (Reserved)

8 (u) sales of aircraft acquired for use outside the State, as prescribed by Regulation.

9 (v) sales of food products by producers as provided for by A.R.S. Sections 3-561, 3-562 and

10 3-563. THIS INCLUDES SALES MADE DIRECTLY BY OWNERS, PROPRIETORS

11 OR TENANTS OF AGRICULTURAL LANDS OR FARMS WHO SELL LIVESTOCK

12 OR POULTRY FEED THAT IS GROWN OR RAISED ON THEIR LANDS TO ANY

13 OF THE FOLLOWING:

14 (1) PERSONS WHO FEED THEIR OWN LIVESTOCK OR POULTRY.

15 (2) PERSONS WHO ARE ENGAGED IN THE BUSINESS OF PRODUCING

16 LIVESTOCK OR POULTRY COMMERCIALLY.

17 (3) PERSONS WHO ARE ENGAGED IN THE BUSINESS OF FEEDING

18 LIVESTOCK OR POULTRY COMMERCIALLY OR WHO BOARD

19 LIVESTOCK NONCOMMERCIALLY.

20 (w) (Reserved)




Page 161
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (x) sales of food and drink to a person who is engaged in business that is classified under the

2 restaurant classification and that provides such food and drink without monetary charge

3 to its employees for their own consumption on the premises during such employees'

4 hours of employment.

5 (y) SALES OF TANGIBLE PERSONAL PROPERTY BY A NONPROFIT

6 ORGANIZATION THAT IS EXEMPT FROM TAXATION UNDER SECTION

7 501(C)(3), 501(C)(4) OR 42 501(C)(6) OF THE INTERNAL REVENUE CODE IF THE

8 ORGANIZATION IS ASSOCIATED WITH A MAJOR LEAGUE BASEBALL TEAM

9 OR A NATIONAL TOURING PROFESSIONAL GOLFING ASSOCIATION AND NO

10 PART OF THE ORGANIZATION'S NET EARNINGS INURES TO THE BENEFIT OF

11 ANY PRIVATE SHAREHOLDER OR INDIVIDUAL. THIS PARAGRAPH DOES

12 NOT APPLY TO AN ORGANIZATION THAT IS OWNED, MANAGED OR

13 CONTROLLED, IN WHOLE OR IN PART, BY A MAJOR LEAGUE BASEBALL

14 TEAM, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS, OR BY A

15 MAJOR LEAGUE BASEBALL ASSOCIATION OR PROFESSIONAL GOLFING

16 ASSOCIATION, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS,

17 UNLESS THE ORGANIZATION CONDUCTED OR OPERATED EXHIBITION

18 EVENTS IN THIS STATE BEFORE JANUARY 1, 2018 THAT WERE EXEMPT

19 FROM TAXATION UNDER A.R.S. SECTION 42-5073.

20 (z) (Reserved)

21 (aa) the sale of tangible personal property used in remediation contracting as defined in

22 Section 14-100 and Regulation 14-100.5.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (bb) sales of materials that are purchased by or for publicly funded libraries including school

2 district libraries, charter school libraries, community college libraries, state university

3 libraries or federal, state, county or municipal libraries for use by the public as follows:

4 (1) printed or photographic materials.

5 (2) electronic or digital media materials.

6 (cc) sales of food, beverages, condiments and accessories used for serving food and beverages

7 to a commercial airline, as defined in A.R.S. Section 42-5061, that serves the food and

8 beverages to its passengers, without additional charge, for consumption in flight. For the

9 purposes of this subsection, "accessories" means paper plates, plastic eating utensils,

10 napkins, paper cups, drinking straws, paper sacks or other disposable containers, or other

11 items which facilitate the consumption of the food.

12 (dd) in computing the tax base in the case of the sale or transfer of wireless

13 telecommunication equipment as an inducement to a customer to enter into or continue a

14 contract for telecommunication services that are taxable under Section 14-470, gross

15 proceeds of sales or gross income does not include any sales commissions or other

16 compensation received by the retailer as a result of the customer entering into or

17 continuing a contract for the telecommunications services.

18 (ee) for the purposes of this Section, a sale of wireless telecommunication equipment to a

19 person who holds the equipment for sale or transfer to a customer as an inducement to

20 enter into or continue a contract for telecommunication services that are taxable under

21 Section 14-470 is considered to be a sale for resale in the regular course of business.




Page 163
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (ff) sales of alternative fuel as defined in A.R.S. Section 1-215, to a used oil fuel burner who

2 has received a Department of Environmental Quality permit to burn used oil or used oil

3 fuel under A.R.S. SECTION § 49-426 or A.R.S. SECTION § 49-480.

4 (gg) sales of food, beverages, condiments and accessories to a public educational entity

5 pursuant to any of the provisions of Title 15, Arizona Revised Statutes, including a

6 regularly organized private or parochial school that offers an educational program for

7 grade twelve (12) or under which may be attended in substitution for a public school

8 pursuant to A.R.S. SECTION Section 15-802; to the extent such items are to be prepared

9 or served to individuals for consumption on the premises of a public educational entity

10 during school hours. For the purposes of this subsection, "accessories" means paper

11 plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or other

12 disposable containers, or other items which facilitate the consumption of the food.

13 (hh) sales of personal hygiene items to a person engaged in the business of and subject to tax

14 under Section 14-444 of this code if the tangible personal property is furnished without

15 additional charge to and intended to be consumed by the person during his occupancy.

16 (ii) for the purposes of this Section, the diversion of gas from a pipeline by a person engaged

17 in the business of operating a natural or artificial gas pipeline, for the sole purpose of

18 fueling compressor equipment to pressurize the pipeline, is not a sale of the gas to the

19 operator of the pipeline.

20 (jj) sales of food, beverages, condiments and accessories to a nonprofit charitable

21 organization that has qualified as an exempt organization under 26 U.S.C Section

22 501(c)(3) and regularly serves meals to the needy and indigent on a continuing basis at no




Page 164
Attachment B
Amendments to the Phoenix City (Tax) Code
1 cost. For the purposes of this subsection, "accessories" means paper plates, plastic eating

2 utensils, napkins, paper cups, drinking straws, paper sacks or other disposable containers,

3 or other items which facilitate the consumption of the food.

4 (kk) sales of motor vehicles that use alternative fuel if such vehicle was manufactured as a

5 diesel fuel vehicle and converted to operate on alternative fuel and sales of equipment

6 that is installed in a conventional diesel fuel motor vehicle to convert the vehicle to

7 operate on an alternative fuel, as defined in A.R.S. Section 1-215.

8 (ll) sales of solar energy devices, for taxable periods beginning from and after July 1, 2008.

9 The retailer shall register with the department of revenue as a solar energy retailer. By

10 registering, the retailer acknowledges that it will make its books and records relating to

11 sales of solar energy devices available to the department of revenue and city, as

12 applicable, for examination.

13 (mm) sales or other transfers of renewable energy credits or any other unit created to track

14 energy derived from renewable energy resources. For the purposes of this paragraph,

15 "renewable energy credit" means a unit created administratively by the corporation

16 commission or governing body of a public power utility to track kilowatt hours of

17 electricity derived from a renewable energy resource or the kilowatt hour equivalent of

18 conventional energy resources displaced by distributed renewable energy resources.

19 (nn) sales of magazines or other periodicals or other publications by this state to encourage

20 tourist travel.

21 (oo) sales of paper machine clothing, such as forming fabrics and dryer felts, sold to a paper

22 manufacturer and directly used or consumed in paper manufacturing.




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 (pp) sales of overhead materials or other tangible personal property that is used in performing

2 a contract between the United States government and a manufacturer, modifier,

3 assembler or repairer, including property used in performing a subcontract with a

4 government contractor who is a manufacturer, modifier, assembler or repairer, to which

5 title passes to the government under the terms of the contract or subcontract.

6 (qq) sales of coal, petroleum, coke, natural gas, virgin fuel oil and electricity sold to a

7 qualified environmental technology manufacturer, producer or processor as defined in

8 A.R.S. Section 41-1514.02 and directly used or consumed in the generation or provision

9 of on-site power or energy solely for environmental technology manufacturing,

10 producing or processing or environmental protection. This paragraph shall apply for

11 twenty full consecutive calendar or fiscal years from the date the first paper

12 manufacturing machine is placed in service. In the case of an environmental technology

13 manufacturer, producer or processor who does not manufacture paper, the time period

14 shall begin with the date the first manufacturing, processing or production equipment is

15 placed in service.

16 (rr) sales or gross income derived from sales of machinery, equipment, materials and other

17 tangible personal property used directly and predominantly to construct a qualified

18 environmental technology manufacturing, producing or processing facility as described in

19 A.R.S. Section 41-1514.02. This subsection applies for ten full consecutive calendar or

20 fiscal years after the start of initial construction.

21 (SS) THE TRANSFER OF TITLE OR POSSESSION OF COAL BACK AND FORTH

22 BETWEEN AN OWNER OR OPERATOR OF A POWER PLANT AND A PERSON




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Attachment B
Amendments to the Phoenix City (Tax) Code
1 WHO IS RESPONSIBLE FOR REFINING COAL IF BOTH OF THE FOLLOWING

2 APPLY:

3 (1) THE TRANSFER OF TITLE OR POSSESSION OF THE COAL IS FOR THE

4 PURPOSE OF REFINING THE COAL; AND

5 (2) THE TITLE OR POSSESSION OF THE COAL IS TRANSFERRED BACK TO

6 THE OWNER OR OPERATOR OF THE POWER PLANT AFTER

7 COMPLETION OF THE COAL REFINING PROCESS. FOR THE PURPOSES

8 OF THIS SUBDIVISION, "COAL REFINING PROCESS" MEANS THE

9 APPLICATION OF A COAL ADDITIVE SYSTEM THAT AIDS THE

10 REDUCTION OF POWER PLANT EMISSIONS DURING THE

11 COMBUSTION OF COAL AND THE TREATMENT OF FLUE GAS.

12 (TT) (RESERVED)

13 (UU) COMPUTER DATA CENTER EQUIPMENT SOLD TO THE OWNER, OPERATOR

14 OR QUALIFIED COLOCATION TENANT OF A COMPUTER DATA CENTER

15 THAT IS CERTIFIED BY THE ARIZONA COMMERCE AUTHORITY UNDER

16 A.R.S. SECTION 41-1519 OR AN AUTHORIZED AGENT OF THE OWNER,

17 OPERATOR OR QUALIFIED COLOCATION TENANT DURING THE

18 QUALIFICATION PERIOD FOR USE IN THE QUALIFIED COMPUTER DATA

19 CENTER. FOR THE PURPOSES OF THIS PARAGRAPH, "COMPUTER DATA

20 CENTER", "COMPUTER DATA CENTER EQUIPMENT", "QUALIFICATION

21 PERIOD" AND "QUALIFIED COLOCATION TENANT" HAVE THE SAME

22 MEANINGS PRESCRIBED IN A.R.S. SECTION 41-1519.




Page 167
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (VV) THE SALE, MANUFACTURE, WHOLESALE OR DISTRIBUTION TO OR AMONG

2 ANY WHOLESALERS, DISTRIBUTORS OR RETAILERS, OF FOOD ITEMS

3 INTENDED FOR HUMAN CONSUMPTION AS DEFINED BY RULE ADOPTED

4 PURSUANT TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY A.R.S.

5 SECTION 42-5106, SUBSECTION D FOR HOME CONSUMPTION OR FOR

6 CONSUMPTION ON THE PREMISES.

7 (WW) THE SALE OF ANY CONTAINER OR PACKAGING USED EXCLUSIVELY FOR

8 TRANSPORTING, PROTECTING OR CONSUMING FOOD ITEMS INTENDED

9 FOR HUMAN CONSUMPTION AS DEFINED BY RULE ADOPTED PURSUANT

10 TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY A.R.S. SECTION 42-

11 5106, SUBSECTION D FOR HOME CONSUMPTION OR FOR CONSUMPTION ON

12 THE PREMISES.


14 Section XI. Phoenix City Code Section 14-470 is amended as follows, with the following

15 effective dates per subsection: (h) July 24, 2014; (a)(3)(A), (a)(3)(B), (a)(4), & (i) July

16 1, 2019. Phoenix City Tax Code Regulation 14-470.1 is repealed effective July 1,

17 2019.


19 Sec. 14-470. Telecommunication services.

20 (a) The tax rate shall be at an amount equal to four and seven-tenths percent (4.7%) of the

21 gross income from the business activity upon every person engaging or continuing in the

22 business of providing telecommunication services to consumers within this City.




Page 168
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (1) Telecommunication services shall include:

2 (A) two-way voice, sound, and/or video communication over a

3 communications channel.

4 (B) one-way voice, sound, and/or video transmission or relay over a

5 communications channel.

6 (C) facsimile transmissions.

7 (D) providing relay or repeater service.

8 (E) providing computer interface services over a communications channel.

9 (F) time-sharing activities with a computer accomplished through the use of a

10 communications channel.

11 (2) Gross income from the business activity of providing telecommunication services

12 to consumers within this City shall include:

13 (A) all fees for connection to a telecommunication system.

14 (B) toll charges, charges for transmissions, and charges for other

15 telecommunications services; provided that such charges relate to

16 transmissions originating in the City and terminating in this State.

17 (C) fees charged for access to or subscription to or membership in a

18 telecommunication system or network.




Page 169
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (D) Charges for monitoring services relating to a security or burglar alarm system

2 located within the City where such system transmits or receives signals or

3 data over a communications channel.

4 (D) charges for telephone, fax or internet access services provided at an

5 additional charge by a hotel business subject to taxation under Section 14-

6 444.

7 (3) Gross income from the business activity of providing telecommunication services

8 to consumers within this City shall not include:

9 (A) charges for installation, maintenance, and repair of telecommunication

10 equipment which are subject to the provisions of Sections 14-415, 14-416,

11 or 14-417 (construction contracting); 14-445 (real property rental); 14-450

12 (tangible personal property rental); or 14-460 (retail sales); depending

13 upon the nature of the work performed.

14 (B) separately billed advertising charges which are subject to the provisions of

15 Section 14-405 (advertising) or 14-435 (publishing).

16 (4) Mobile equipment. In cases where the customer is being provided

17 telecommunication services to receiving/transmission equipment designed to be

18 mobile in nature (for example, mobile telephones, portable hand-held two-way

19 radios, paging devices, etc.), the provider shall, for the purposes of the tax

20 imposed by this Section, determine whether such provider's customers are "within

21 this City" by the billing address of the customer, provided that such address is a

22 permanent residence or business location of the consumer within the State.




Page 170
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (b) Resale telecommunication services. Gross income from sales of telecommunication

2 services to another provider of telecommunication services for the purpose of providing

3 the purchaser's customers with such service shall be exempt from the tax imposed by this

4 Section; provided, however, that such purchaser is properly licensed by the City to

5 engage in such business.

6 (c) Interstate transmissions. Charges by a provider of telecommunication services for

7 transmissions originating in the City and terminating outside the State are exempt from

8 the tax imposed by this Section.

9 (d) Tax credit offset for franchise fees. There shall be allowed as an offset, up to the amount

10 of tax due, any amounts paid to the City for license fees or franchise fees, but such offset

11 shall not be allowed against taxes imposed by any other Section of this Chapter. Such

12 offset shall not be deemed in conflict with or violation of subsection 14-400(b).

13 (e) (Reserved)

14 (f) Prepaid calling cards. Telecommunications services purchased with a prepaid calling card

15 that are taxable under Section 14-460 are exempt from the tax imposed under this

16 Section.

17 (g) Internet access services. The gross income subject to tax under this Section shall not

18 include sales of internet access services to the person's subscribers and customers. For the

19 purposes of this subsection:

20 (1) "Internet" means the computer and telecommunications facilities that comprise

21 the interconnected worldwide network of networks that employ the transmission




Page 171
Attachment B
Amendments to the Phoenix City (Tax) Code
1 control protocol or internet protocol, or any predecessor or successor protocol, to

2 communicate information of all kinds by wire or radio.

3 (2) "Internet Access" means a service that enables users to access content,

4 information, electronic mail or other services over the internet. Internet access

5 does not include telecommunication services provided by a common carrier.

6 (H) ALARM MONITORING SERVICES. THE GROSS INCOME SUBJECT TO TAX

7 UNDER THIS SECTION SHALL NOT INCLUDE SALES OF MONITORING

8 SERVICES RELATING TO AN ALARM SYSTEM AS DEFINED IN A.R.S.

9 SECTION 32-101.

10 (I) OVER-THE-TOP-SERVICES. THE GROSS INCOME SUBJECT TO TAX UNDER

11 THIS SECTION SHALL NOT INCLUDE SALES OF OVER-THE-TOP SERVICES.

12 FOR THE PURPOSES OF THIS PARAGRAPH “OVER-THE-TOP SERVICES"

13 MEANS AUDIO OR VIDEO PROGRAMMING SERVICES THAT ARE RECEIVED

14 BY THE PURCHASER BY MEANS OF AN INTERNET CONNECTION,

15 REGARDLESS OF THE TECHNOLOGY USED, THAT INCLUDE LINEAR OR LIVE

16 PROGRAMMING AND THAT ARE GENERALLY CONSIDERED COMPARABLE

17 TO PROGRAMMING PROVIDED BY RADIO OR TELEVISION BROADCAST

18 STATION AND INCLUDES RELATED ON DEMAND PROGRAMMING

19 PROVIDED AT NO ADDITIONAL CHARGE, REGARDLESS OF WHETHER THE

20 SERVICES ARE PROVIDED INDEPENDENTLY OR PACKAGED WITH OTHER

21 AUDIO OR VIDEO PROGRAMMING.

22 Phoenix City Code Regulation 14-470.1. Telecommunications services.




Page 172
Attachment B
Amendments to the Phoenix City (Tax) Code

2 a. Gross income from the business activity of providing telecommunication services to

3 consumers within this City shall not include:

4 1. Charges for installation, maintenance, and repair of telecommunication equipment

5 which are subject to the provisions of Section 14-415, 14-416, or 14-417

6 (construction contracting); 14-445 (real property rental); 14-450 (tangible

7 personal property rental); or 14-460 (retail sales); depending upon the nature of

8 the work performed.

9 2. Separately billed advertising charges which are subject to the provisions of Section

10 14-405 or 14-435.

11 b. Mobile equipment. In cases where the customer is being provided telecommunication

12 services to receiving/transmission equipment designed to be mobile in nature (for

13 example, mobile telephones, portable handheld two-way radios, paging devices, etc.), the

14 provider shall, for the purposes of the tax imposed by this section, determine whether

15 such provider’s customers are "within this City" as follows:

16 1. By the billing address of the customer, provided that such address is a permanent

17 residence or business location of the consumer within the State.

18 2. In all other cases, the business location of the telecommunications provider.


20 Section XII. Phoenix City Code Section 14-475 is amended as follows, with an effective

21 date of September 1, 2016.




Page 173
Attachment B
Amendments to the Phoenix City (Tax) Code

2 Sec. 14-475. Transporting for hire.

3 The tax rate shall be at an amount equal to two and three-tenths percent (2.3%) of the gross

4 income from the business activity upon every person engaging or continuing in the business of

5 providing the following forms of transportation for hire from this City to another point within the

6 State:

7 (a) transporting of persons or property by railroad; provided, however, that the tax imposed

8 by this subsection shall not apply to transporting freight or property for hire by a railroad

9 operating exclusively in this State if the transportation comprises a portion of a single

10 shipment of freight or property, involving more than one railroad, either from a point in

11 this State to a point outside this State or from a point outside this State to a point in this

12 State. For purposes of this paragraph, "a single shipment" means the transportation that

13 begins at the point at which one of the railroads first takes possession of the freight or

14 property and continues until the point at which one of the railroads relinquishes

15 possession of the freight or property to a party other than one of the railroads.

16 (b) transporting of oil or natural or artificial gas through pipe or conduit.

17 (c) transporting of property by aircraft.

18 (d) (Reserved)

19 (1) (Reserved)

20 (2) (Reserved)

21 (3) (Reserved)




Page 174
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (4) (Reserved)

2 (e) (Reserved)

3 (f) Deductions or exemptions. The gross proceeds of sales or gross income derived from the

4 following sources is exempt from the tax imposed by this Section:

5 (1) income that is specifically included as the gross income of a business activity

6 upon which another Section of Article IV imposes a tax, that is separately stated

7 to the customer and is taxable to the person engaged in that classification not to

8 exceed consideration paid to the person conducting the activity.

9 (2) income from arranging amusement or transportation when the amusement or

10 transportation is conducted by another person not to exceed consideration paid to

11 the amusement or transportation business.

12 (3) ANY AMOUNT ATTRIBUTABLE TO FEES COLLECTED BY

13 TRANSPORTATION NETWORK COMPANIES ISSUED A PERMIT

14 PURSUANT TO A.R.S. SECTION 28-9552.

15 (4) TRANSPORTING FOR HIRE PERSONS BY TRANSPORTATION

16 NETWORK COMPANY DRIVERS ON TRANSACTIONS INVOLVING

17 TRANSPORTATION NETWORK SERVICES AS DEFINED IN A.R.S.

18 SECTION 28-9551.

19 (5) TRANSPORTING FOR HIRE PERSONS BY VEHICLE FOR HIRE

20 COMPANIES ISSUED A PERMIT PURSUANT TO A.R.S. SECTION 28-9503.




Page 175
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (6) TRANSPORTING FOR HIRE PERSONS BY VEHICLE FOR HIRE DRIVERS

2 ON TRANSACTIONS INVOLVING VEHICLE FOR HIRE SERVICES AS

3 DEFINED IN A.R.S. SECTION 28-9501.

4 (g) The tax imposed by this Section shall not include arranging transportation as a

5 convenience to a person's customers if that person is not otherwise engaged in the

6 business of transporting persons, freight or property for hire. This exception does not

7 apply to businesses that dispatch vehicles pursuant to customer orders and send the

8 billings and receive the payments associated with that activity, including when the

9 transportation is performed by third party independent contractors. For the purposes of

10 this paragraph, "arranging" includes billing for or collecting transportation charges from a

11 person's customers on behalf of the persons providing the transportation.


13 Section XIII. Phoenix City Code Section 14-480 is amended as follows, with an effective

14 date of August 1, 2015.


16 Sec. 14-480. Utility services.

17 (a) The tax rate shall be at an amount equal to two and seven-tenths percent (2.7%) of the

18 gross income from the business activity upon every person engaging or continuing in the

19 business of producing, providing, or furnishing utility services, including electricity,

20 electric lights, current, power, gas (natural or artificial), or water to:

21 (1) consumers or ratepayers who reside within the City.




Page 176
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (2) (Reserved)

2 (b) Exclusion of certain sales of natural gas to a public utility. Notwithstanding the

3 provisions of subsection (a) above, the gross income derived from the sale of natural gas

4 to a public utility for the purpose of generation of power to be transferred by the utility to

5 its ratepayers shall be considered a retail sale of tangible personal property subject to

6 Sections 14-460 and 14-465, and not considered gross income taxable under this Section.

7 (c) Resale utility services. Sales of utility services to another provider of the same utility

8 services for the purpose of providing such utility services either to another properly

9 licensed utility provider or directly to such purchaser's customers or ratepayers shall be

10 exempt and deductible from the cross income subject to the tax imposed by this Section,

11 provided that the purchaser is properly licensed by all applicable taxing jurisdictions to

12 engage or continue in the business of providing utility services, and further provided that

13 the seller maintains proper documentation, in a manner similar to that for sales for resale,

14 of such transactions.

15 (d) (Reserved)

16 (e) The tax imposed by this Section shall not apply to sales of utility services to a qualifying

17 hospital, qualifying community health center or a qualifying health care organization,

18 except when sold for use in activities resulting in gross income from unrelated business

19 income as that term is defined in 26 U.S.C. Section 512.

20 (f) The tax imposed by this Section shall not apply to sales of natural gas or liquefied

21 petroleum gas used to propel a motor vehicle.

22 (g) The tax imposed by this Section shall not apply to:




Page 177
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (1) revenues received by a municipally owned utility in the form of fees charged to

2 persons constructing residential, commercial or industrial developments or

3 connecting residential, commercial or industrial developments to a municipal

4 utility system or systems if the fees are segregated and used only for capital

5 expansion, system enlargement or debt service of the utility system or systems.

6 (2) revenues received by any person or persons owning a utility system in the form of

7 reimbursement or contribution compensation for property and equipment installed

8 to provide utility access to, on or across the land of an actual utility consumer if

9 the property and equipment become the property of the utility. This exclusion

10 shall not exceed the value of such property and equipment.

11 (h) The tax imposed by this Section shall not apply to sales of alternative fuel as defined in

12 A.R.S. SECTION § 1-215, to a used oil fuel burner who has received a Department of

13 Environmental Quality permit to burn used oil or used oil fuel under A.R.S. SECTION §

14 49-426 or A.R.S. SECTION § 49-480.

15 (i) The tax imposed by this Section shall not apply to sales or other transfers of renewable

16 energy credits or any other unit created to track energy derived from renewable energy

17 resources. For the purposes of this paragraph, "renewable energy credit" means a unit

18 created administratively by the corporation commission or governing body of a public

19 power utility to track kilowatt hours of electricity derived from a renewable energy

20 resource or the kilowatt hour equivalent of conventional energy resources displaced by

21 distributed renewable energy resources.




Page 178
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (j) The tax imposed by this Section shall not apply to the portion of gross proceeds of sales

2 or gross income attributable to transfers of electricity by any retail electric customer

3 owning a solar photovoltaic energy generating system to an electric distribution system,

4 if the electricity transferred is generated by the customer's system.

5 (k) (Reserved)


7 Section XIV. Phoenix City Code Section 14-530 is amended as follows, with an effective

8 date of January 1, 2015.


10 Sec. 14-530. When tax due; when delinquent; verification of return; extensions.

11 (a) Except as provided elsewhere in this Section, the taxes shall be due and payable monthly

12 on or before the twentieth (20th) day of the month next succeeding the month in which

13 the tax accrues.

14 (B) ANY PERSON WHO IS ENGAGED IN OR CONDUCTING BUSINESS IN TWO OR

15 MORE LOCATIONS OR UNDER TWO OR MORE BUSINESS NAMES SHALL

16 FILE THE RETURN REQUIRED UNDER THIS CHAPTER BY ELECTRONIC

17 MEANS.

18 (C) THE DEPARTMENT, FOR ANY TAXPAYER WHOSE ESTIMATED ANNUAL

19 LIABILITY FOR TAXES IMPOSED OR ADMINISTERED BY A.R.S TITLE 42,

20 CHAPTER 5, ARTICLE 1 OR A.R.S. TITLE 42, CHAPTER 6 IS BETWEEN TWO

21 THOUSAND DOLLARS AND EIGHT THOUSAND DOLLARS, SHALL




Page 179
Attachment B
Amendments to the Phoenix City (Tax) Code
1 AUTHORIZE SUCH TAXPAYER TO PAY SUCH TAXES ON A QUARTERLY

2 BASIS. THE DEPARTMENT, FOR ANY TAXPAYER WHOSE ESTIMATED

3 ANNUAL LIABILITY FOR TAXES IMPOSED OR ADMINISTERED BY A.R.S

4 TITLE 42, CHAPTER 5, ARTICLE 1 OR A.R.S. TITLE 42, CHAPTER 6 IS LESS

5 THAN TWO THOUSAND DOLLARS SHALL AUTHORIZE SUCH TAXPAYER TO

6 PAY SUCH TAXES ON AN ANNUAL BASIS.

7 (D) Delinquency Date. THE TAXES LEVIED UNDER THIS CHAPTER WILL BE

8 CONSIDERED DELINQUENT IN ACCORDANCE WITH A.R.S. SECTION 42-5014,

9 AS FOLLOWS:

10 (1) FOR TAXPAYERS THAT ARE REQUIRED OR ELECT TO FILE AND PAY

11 ELECTRONICALLY IN ANY MONTH, IF NOT RECEIVED BY THE

12 DEPARTMENT ON OR BEFORE THE LAST BUSINESS DAY OF THE

13 MONTH.

14 (2) FOR ALL OTHER TAXPAYERS, IF NOT RECEIVED BY THE

15 DEPARTMENT ON OR BEFORE THE BUSINESS DAY PRECEDING THE

16 LAST BUSINESS DAY OF THE MONTH

17 (E) Jeopardy reporting. If the Tax Collector determines that the collection of any tax due to

18 the City is in jeopardy, the Tax Collector may direct the taxpayer to file his return and

19 remit the tax on a weekly, daily, or transaction-by-transaction basis. Such return and

20 remittance shall be due upon the date fixed by the Tax Collector, and the "delinquency

21 date" shall be the following day.




Page 180
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (F) Extensions. The Tax Collector may extend the time for filing a return, for good cause

2 shown, and only when requested in writing and received by the Tax Collector prior to the

3 tax due date. However, the time for filing such return shall not be extended beyond the

4 last business day of the month next succeeding the due date of such return. In such cases,

5 only the penalties for late filing and late payment may be waived by the Tax Collector for

6 filing and payment within the extension period. Notwithstanding the granting of an

7 extension, the interest payable for late payment of taxes shall be paid for the period

8 commencing upon the original delinquency date and ending on the date the tax is paid.

9 The interest may not be waived by the Tax Collector.


11 Section XV. Phoenix City Code Section 14-660 is amended as follows, with the following

12 effective dates per subsection: (k) January 1, 2015; (ee) January 1, 2018; (ss) August 1,

13 2015; (tt) July 24, 2014; (uu) September 12, 2013; (vv) December 1, 2017; (ww) August 3,

14 2018; (yy) August 3, 2018.


16 Sec. 14-660. Use tax: exemptions.

17 The storage or use in this City of the following tangible personal property is exempt from the

18 Use Tax imposed by this Article:

19 (a) tangible personal property brought into the City by an individual who was not a resident

20 of the City at the time the property was acquired for his own use, if the first actual use of

21 such property was outside the City, unless such property is used in conducting a business

22 in this City.




Page 181
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (b) tangible personal property, the value of which does not exceed the amount of one

2 thousand dollars ($1,000) per item, acquired by an individual outside the limits of the

3 City for his personal use and enjoyment.

4 (c) charges for delivery, installation, or other customer services, as prescribed by Regulation.

5 (d) charges for repair services, as prescribed by Regulation.

6 (e) separately itemized charges for warranty, maintenance, and service contracts.

7 (f) prosthetics.

8 (g) income-producing capital equipment.

9 (h) rental equipment and rental supplies.

10 (i) mining and metallurgical supplies.

11 (j) motor vehicle fuel and use fuel which are used upon the highways of this State and upon

12 which a tax has been imposed under the provisions of Article I or II, Chapter 16, Title 28,

13 Arizona Revised Statutes.

14 (k) tangible personal property purchased by:

15 (1) a construction contractor, but not an owner-builder, when such person holds a

16 valid Privilege License for engaging or continuing in the business of construction

17 contracting, and where the property acquired is incorporated into any structure or

18 improvement to real property in fulfillment of a construction contract.

19 (2) A PERSON THAT IS NOT SUBJECT TO TAX UNDER SECTION 415(B)(12)

20 AND THAT HAS BEEN PROVIDED A COPY OF A CERTIFICATE UNDER




Page 182
Attachment B
Amendments to the Phoenix City (Tax) Code
1 A.R.S. SECTION 42-5009, SUBSECTION L, IF THE PROPERTY SO SOLD IS

2 INCORPORATED OR FABRICATED BY THE PERSON INTO THE REAL

3 PROPERTY, STRUCTURE, PROJECT, DEVELOPMENT OR

4 IMPROVEMENT DESCRIBED IN THE CERTIFICATE.

5 (l) sales of motor vehicles to nonresidents of this State for use outside this State if the vendor

6 ships or delivers the motor vehicle to a destination outside this State.

7 (m) tangible personal property which directly enters into and becomes an ingredient or

8 component part of a product sold in the regular course of the business of job printing,

9 manufacturing, or publication of newspapers, magazines or other periodicals. Tangible

10 personal property which is consumed or used up in a manufacturing, job printing,

11 publishing, or production process is not an ingredient nor component part of a product.

12 (n) rental, leasing, or licensing for use of film, tape, or slides by a theater or other person

13 taxed under Section 14-410, or by a radio station, television station, or subscription

14 television system.

15 (o) food served to patrons for a consideration by any person engaged in a business properly

16 licensed and taxed under Section 14-455, but not food consumed by owners, agents, or

17 employees of such business.

18 (p) tangible personal property acquired by a qualifying hospital, qualifying community

19 health center or a qualifying health care organization, except when the property is in fact

20 used in activities resulting in gross income from unrelated business income as that term is

21 defined in 26 U.S.C. Section 512.

22 (q) (Reserved) (See Mesa City Page).




Page 183
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (r) the following tangible personal property purchased by persons engaging or continuing in

2 the business of farming, ranching, or feeding livestock, poultry or ratites:

3 (1) seed, fertilizer, fungicides, seed treating chemicals, and other similar chemicals.

4 (2) feed for livestock, poultry or ratites, including salt, vitamins, and other additives

5 to such feed.

6 (3) livestock, poultry or ratites purchased or raised for slaughter, but not including

7 livestock purchased or raised for production or use, such as milch cows, breeding

8 bulls, laying hens, riding or work horses.

9 (4) (Reserved)

10 This exemption shall not be construed to include machinery, equipment, fuels, lubricants,

11 pharmaceuticals, repair and replacement parts, or other items used or consumed in the

12 running, maintenance, or repair of machinery, equipment, buildings, or structures used or

13 consumed in the business of farming, ranching, or feeding of livestock, poultry or ratites.

14 (s) groundwater measuring devices required by A.R.S. Section 45-604.

15 (t) (Reserved)

16 (u) aircraft acquired for use outside the State, as prescribed by Regulation.

17 (v) food products SOLD by FOOD producers as provided for by A.R.S. Section 3-561, 3-562

18 and 3-563.

19 (w) (Reserved)




Page 184
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (x) food and drink provided by a person who is engaged in business that is classified under

2 the restaurant classification without monetary charge to its employees for their own

3 consumption on the premises during such employees' hours of employment.

4 (y) Tangible personal property donated to an organization or entity qualifying as an exempt

5 organization under 26 U.S.C. Section 501(c)(3); if and only if:

6 (1) the donor is engaged or continuing in a business activity subject to a tax imposed

7 by Article IV; and

8 (2) the donor originally purchased the donated property for resale in the ordinary

9 course of the donor's business; and

10 (3) the donor obtained from the donee a letter or other evidence satisfactory to the

11 Tax Collector of qualification under 26 U.S.C. Section 501(c)(3) from the Internal

12 Revenue Service or other appropriate federal agency; and

13 (4) the donor maintains, and provides upon demand, such evidence to the Tax

14 Collector, in a manner similar to other documentation required under Article III.

15 (z) (Reserved)

16 (aa) tangible personal property used in remediation contracting as defined in Section 14-100

17 and Regulation 14-100.5.

18 (bb) materials that are purchased by or for publicly funded libraries including school district

19 libraries, charter school libraries, community college libraries, state university libraries or

20 federal, state, county or municipal libraries for use by the public as follows:

21 (1) printed or photographic materials.




Page 185
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (2) electronic or digital media materials.

2 (cc) food, beverages, condiments and accessories used for serving food and beverages by a

3 commercial airline, as defined in A.R.S. Section 42-5061, that serves the food and

4 beverages to its passengers, without additional charge, for consumption in flight. For the

5 purposes of this subsection, "accessories" means paper plates, plastic eating utensils,

6 napkins, paper cups, drinking straws, paper sacks or other disposable containers, or other

7 items which facilitate the consumption of the food.

8 (dd) wireless telecommunication equipment that is held for sale or transfer to a customer as an

9 inducement to enter into or continue a contract for telecommunication services that are

10 taxable under Section 14-470.

11 (ee) TANGIBLE PERSONAL PROPERTY SOLD BY A NONPROFIT ORGANIZATION

12 THAT IS EXEMPT FROM TAXATION UNDER SECTION 501(C)(3), 501(C)(4) OR

13 501(C)(6) OF THE INTERNAL REVENUE CODE IF THE ORGANIZATION IS

14 ASSOCIATED WITH A MAJOR LEAGUE BASEBALL TEAM OR A NATIONAL

15 TOURING PROFESSIONAL GOLFING ASSOCIATION AND NO PART OF THE

16 ORGANIZATION'S NET EARNINGS INURES TO THE BENEFIT OF ANY

17 PRIVATE SHAREHOLDER OR INDIVIDUAL. THIS PARAGRAPH DOES NOT

18 APPLY TO AN ORGANIZATION THAT IS OWNED, MANAGED OR

19 CONTROLLED, IN WHOLE OR IN PART, BY A MAJOR LEAGUE BASEBALL

20 TEAM, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS, OR BY A

21 MAJOR LEAGUE BASEBALL ASSOCIATION OR PROFESSIONAL GOLFING

22 ASSOCIATION, OR ITS OWNERS, OFFICERS, EMPLOYEES OR AGENTS,

23 UNLESS THE ORGANIZATION CONDUCTED OR OPERATED EXHIBITION



Page 186
Attachment B
Amendments to the Phoenix City (Tax) Code
1 EVENTS IN THIS STATE BEFORE JANUARY 1, 2018 THAT WERE EXEMPT

2 FROM TRANSACTION PRIVILEGE TAX UNDER A.R.S. SECTION 42-5073.

3 (ff) alternative fuel as defined in A.R.S. SECTION § 1-215, by a used oil fuel burner who has

4 received a Department of Environmental Quality permit to burn used oil or used oil fuel

5 under A.R.S. SECTION § 49-426 or A.R.S. SECTION § 49-480.

6 (gg) food, beverages, condiments and accessories purchased by or for a public educational

7 entity, pursuant to any of the provisions of Title 15, Arizona Revised Statutes, including a

8 regularly organized private or parochial school that offers an educational program for

9 grade twelve (12) or under which may be attended in substitution for a public school

10 pursuant to A.R.S. SECTION § 15-802; to the extent such items are to be prepared or

11 served to individuals for consumption on the premises of a public educational entity

12 during school hours. For the purposes of this subsection, "accessories" means paper

13 plates, plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or other

14 disposable containers, or other items which facilitate the consumption of the food.

15 (hh) personal hygiene items purchased by a person engaged in the business of and subject to

16 tax under Section 14-444 of this code if the tangible personal property is furnished

17 without additional charge to and intended to be consumed by the person during his

18 occupancy.

19 (ii) the diversion of gas from a pipeline by a person engaged in the business of operating a

20 natural or artificial gas pipeline, for the sole purpose of fueling compressor equipment to

21 pressurize the pipeline, is not a sale of the gas to the operator of the pipeline.




Page 187
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (jj) food, beverages, condiments and accessories purchased by or for a nonprofit charitable

2 organization that has qualified as an exempt organization under 26 U.S.C. Section

3 501(c)(3) and regularly serves meals to the needy and indigent on a continuing basis at no

4 cost. For the purposes of this subsection, "accessories" means paper plates, plastic eating

5 utensils, napkins, paper cups, drinking straws, paper sacks or other disposable containers,

6 or other items which facilitate the consumption of the food.

7 (kk) sales of motor vehicles that use alternative fuel if such vehicle was manufactured as a

8 diesel fuel vehicle and converted to operate on alternative fuel and sales of equipment

9 that is installed in a conventional diesel fuel motor vehicle to convert the vehicle to

10 operate on an alternative fuel, as defined in A.R.S. SECTION § 1-215.

11 (ll) the storage, use or consumption of tangible personal property in the city or town by a

12 school district or charter school.

13 (mm) renewable energy credits or any other unit created to track energy derived from

14 renewable energy resources. For the purposes of this paragraph, "renewable energy

15 credit" means a unit created administratively by the corporation commission or governing

16 body of a public power utility to track kilowatt hours of electricity derived from a

17 renewable energy resource or the kilowatt hour equivalent of conventional energy

18 resources displaced by distributed renewable energy resources.

19 (nn) magazines or other periodicals or other publications by this state to encourage tourist

20 travel.

21 (oo) paper machine clothing, such as forming fabrics and dryer felts, sold to a paper

22 manufacturer and directly used or consumed in paper manufacturing.




Page 188
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (pp) overhead materials or other tangible personal property that is used in performing a

2 contract between the United States government and a manufacturer, modifier, assembler

3 or repairer, including property used in performing a subcontract with a government

4 contractor who is a manufacturer, modifier, assembler or repairer, to which title passes to

5 the government under the terms of the contract or subcontract.

6 (qq) coal, petroleum, coke, natural gas, virgin fuel oil and electricity sold to a qualified

7 environmental technology manufacturer, producer or processor as defined in A.R.S.

8 SECTION § 41-1514.02 and directly used or consumed in the generation or provision of

9 on-site power or energy solely for environmental technology manufacturing, producing

10 or processing or environmental protection. This paragraph shall apply for twenty full

11 consecutive calendar or fiscal years from the date the first paper manufacturing machine

12 is placed in service. In the case of an environmental technology manufacturer, producer

13 or processor who does not manufacture paper, the time period shall begin with the date

14 the first manufacturing, processing or production equipment is placed in service.

15 (rr) machinery, equipment, materials and other tangible personal property used directly and

16 predominantly to construct a qualified environmental technology manufacturing,

17 producing or processing facility as described in A.R.S. SECTION § 41-1514.02. This

18 subsection applies for ten full consecutive calendar or fiscal years after the start of initial

19 construction.

20 (ss) (Reserved)

21 (TT) THE TRANSFER OF TITLE OR POSSESSION OF COAL BACK AND FORTH

22 BETWEEN AN OWNER OR OPERATOR OF A POWER PLANT AND A PERSON




Page 189
Attachment B
Amendments to the Phoenix City (Tax) Code
1 WHO IS RESPONSIBLE FOR REFINING COAL IF BOTH OF THE FOLLOWING

2 APPLY:

3 (1) THE TRANSFER OF TITLE OR POSSESSION OF THE COAL IS FOR THE

4 PURPOSE OF REFINING THE COAL; AND

5 (2) THE TITLE OR POSSESSION OF THE COAL IS TRANSFERRED BACK TO

6 THE OWNER OR OPERATOR OF THE POWER PLANT AFTER

7 COMPLETION OF THE COAL REFINING PROCESS. FOR THE PURPOSES

8 OF THIS SUBDIVISION, "COAL REFINING PROCESS" MEANS THE

9 APPLICATION OF A COAL ADDITIVE SYSTEM THAT AIDS THE

10 REDUCTION OF POWER PLANT EMISSIONS DURING THE

11 COMBUSTION OF COAL AND THE TREATMENT OF FLUE GAS.

12 (UU) COMPUTER DATA CENTER EQUIPMENT PURCHASED BY THE OWNER,

13 OPERATOR OR QUALIFIED COLOCATION TENANT OF THE A COMPUTER

14 DATA CENTER THAT IS CERTIFIED BY THE ARIZONA COMMERCE

15 AUTHORITY UNDER A.R.S. SECTION 41-1519 OR AN AUTHORIZED AGENT OF

16 THE OWNER, OPERATOR OR QUALIFIED COLOCATION TENANT DURING

17 THE QUALIFICATION PERIOD FOR USE IN THE QUALIFIED COMPUTER DATA

18 CENTER. FOR THE PURPOSES OF THIS PARAGRAPH, "COMPUTER DATA

19 CENTER", "COMPUTER DATA CENTER EQUIPMENT", "QUALIFICATION

20 PERIOD" AND "QUALIFIED COLOCATION TENANT" HAVE THE SAME

21 MEANINGS PRESCRIBED IN A.R.S. SECTION 41-1519.




Page 190
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (VV) JET FUEL USE TAX IMPOSED UNDER SECTION 14-610 ON THE STORAGE, USE

2 OR CONSUMPTION IN THIS CITY OF JET FUEL PURCHASED FROM A

3 RETAILER IN ANY CASE IN WHICH THE TAX IMPOSED UNDER SECTION 14-

4 422 HAS NOT BEEN PAID IS LIMITED TO AMOUNTS OF NOT MORE THAN TEN

5 MILLION GALLONS OF JET FUEL PURCHASED IN EACH CALENDAR YEAR.

6 PURCHASES IN EXCESS OF TEN MILLION GALLONS PER YEAR ARE DEEMED

7 EXEMPT.

8 (WW) THE PURCHASE MANUFACTURE, WHOLESALE OR DISTRIBUTION TO OR

9 AMONG ANY WHOLESALERS, DISTRIBUTORS OR RETAILERS, OF FOOD

10 ITEMS INTENDED FOR HUMAN CONSUMPTION AS DEFINED BY RULE

11 ADOPTED PURSUANT TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY

12 A.R.S. SECTION 42-5106, SUBSECTION D FOR HOME CONSUMPTION OR FOR

13 CONSUMPTION ON THE PREMISES.

14 (YY) THE PURCHASE OF ANY CONTAINER OR PACKAGING USED EXCLUSIVELY

15 FOR TRANSPORTING, PROTECTING OR CONSUMING FOOD ITEMS

16 INTENDED FOR HUMAN CONSUMPTION AS DEFINED BY RULE ADOPTED

17 PURSUANT TO A.R.S. SECTION 42-5106 OR ITEMS PRESCRIBED BY A.R.S.

18 SECTION 42-5106, SUBSECTION D FOR HOME CONSUMPTION OR FOR

19 CONSUMPTION ON THE PREMISES.


21 Section XVI. Phoenix City Code Section 14-416 is amended as follows; Section 14-416.1 is

22 added as follows, repealing and replacing Regulation 14-416.1; and Section 416.2 is added




Page 191
Attachment B
Amendments to the Phoenix City (Tax) Code
1 as follows, repealing and replacing Regulation 416.2, all effective from and after April 1,

2 2019.


4 Sec. 14-416. Construction contracting: speculative builders.

5 (a) The tax shall be equal to two and three-tenths percent (2.3%) of the gross income from

6 the business activity upon every person engaging or continuing in business as a

7 speculative builder within the City.

8 (1) The gross income of a speculative builder considered taxable shall include the

9 total selling price from the sale of improved real property at the time of closing of

10 escrow or transfer of title.

11 (2) "Improved Real Property" means any real property:

12 (A) upon which a NEW structure has been constructed SUBSTANTIALLY

13 COMPLETED; or

14 (B) where improvements have been made to land containing no structure (such

15 as paving or landscaping); or

16 (C) which has been reconstructed as provided by Regulation SECTION 14-

17 416.2; or

18 (D) where water, power, and streets have been constructed to the property line.

19 FOR THE PURPOSE OF PARAGRAPH (A), ONCE A STRUCTURE HAS

20 BEEN DEEMED “SUBSTANTIALLY COMPLETE”, SUBSEQUENT

21 IMPROVEMENTS TO THE STRUCTURE SHALL NOT BE CONSIDERED




Page 192
Attachment B
Amendments to the Phoenix City (Tax) Code
1 FOR THE PURPOSE OF DETERMINING THE DATE ON WHICH A SALE

2 TRANSACTION WOULD BE TAXABLE UNDER THIS SECTION.

3 (3) "Sale of Improved Real Property" includes any form of transaction, whether

4 characterized as a lease or otherwise, which in substance is a transfer of title of, or

5 equitable ownership in, improved real property and includes any lease of the

6 property for a term of thirty (30) years or more (with all options for renewal being

7 included as a part of the term). In the case of multiple unit projects, "sale" refers

8 to the sale of the entire project or to the sale of any individual parcel or unit.

9 (4) "Partially Improved Residential Real Property", as used in this Section, means

10 any improved real property, as defined in subsection (a)(2) above, being

11 developed for sale to individual homeowners, where the construction of the

12 residence upon IMPROVEMENT TO such property is not substantially complete

13 at the time of the sale.

14 (b) Exclusions.

15 (1) In cases involving reconstruction contracting, the speculative builder may exclude

16 from gross income the prior value allowed for reconstruction contracting in

17 determining his taxable gross income, as provided by Regulation SECTION 14-

18 416.2.

19 (2) Neither the cost nor the fair market value of the land which constitutes part of the

20 improved real property sold may be excluded or deducted from gross income

21 subject to the tax imposed by this Section.

22 (3) (Reserved)




Page 193
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (4) A speculative builder may exclude gross income from the sale of partially

2 improved residential real property as defined in (a)(4) above to another

3 speculative builder only if all of the following conditions are satisfied:

4 (A) The speculative builder purchasing the partially improved residential real

5 property has a valid City MUNICIPAL privilege TAX license for

6 construction contracting as a speculative builder; and

7 (B) At the time of the transaction, the purchaser provides the seller with a

8 properly completed written declaration that the purchaser assumes liability

9 for and will pay all privilege taxes which would otherwise be due the City

10 at the time of sale of the partially improved residential real property; and

11 (C) The seller also:

12 (i) maintains proper records of such transactions in a manner similar

13 to the requirements provided in this chapter relating to sales for

14 resale; and

15 (ii) retains a copy of the written declaration provided by the buyer for

16 the transaction; and

17 (iii) is properly licensed with the City as a speculative builder and

18 provides the City with the written declaration attached to the City

19 privilege tax return where he claims the exclusion.

20 (5) For taxable periods beginning from and after July 1, 2008, the portion of gross

21 proceeds of sales or gross income attributable to the actual direct costs of




Page 194
Attachment B
Amendments to the Phoenix City (Tax) Code
1 providing architectural or engineering services that are incorporated in a contract

2 is not subject to tax under this section. For the purposes of this subsection, "direct

3 costs" means the portion of the actual costs that are directly expended in

4 providing architectural or engineering services.

5 (c) Tax liability for speculative builders occurs at close of escrow or transfer of title,

6 whichever occurs earlier, and is subject to the following provisions, relating to

7 exemptions, deductions and tax credits:

8 (1) Exemptions.

9 (A) The gross proceeds of sales or gross income attributable to the purchase of

10 machinery, equipment or other tangible personal property that is exempt

11 from or deductible from privilege or use tax under:

12 (i) Section 14-465, subsections (g) and (p)

13 (ii) Section 14-660, subsections (g) and (p);

14 shall be exempt or deductible, respectively, from the tax imposed by this

15 section.

16 (B) The gross proceeds of sales or gross income received from a contract for

17 the construction of an environmentally controlled facility for the raising of

18 poultry for the production of eggs and the sorting, or cooling and

19 packaging of eggs shall be exempt from the tax imposed under this

20 section.




Page 195
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (C) The gross proceeds of sales or gross income that is derived from the

2 installation, assembly, repair or maintenance of cleanrooms that are

3 deducted from the tax base of the retail classification pursuant to Section

4 14-465, subsection (g) shall be exempt from the tax imposed under this

5 section.

6 (D) The gross proceeds of sales or gross income that is derived from a contract

7 entered into with a person who is engaged in the commercial production of

8 livestock, livestock products or agricultural, horticultural, viticultural or

9 floricultural crops or products in this state for the construction, alteration,

10 repair, improvement, movement, wrecking or demolition or addition to or

11 subtraction from any building, highway, road, excavation, manufactured

12 building or other structure, project, development or improvement used

13 directly and primarily to prevent, monitor, control or reduce air, water or

14 land pollution shall be exempt from the tax imposed under this section.

15 (E) Any amount attributable to development fees that are incurred in relation

16 to the construction, development or improvement of real property and paid

17 by the taxpayer as defined in the model city tax code or by a contractor

18 providing services to the taxpayer shall be exempt from the tax imposed

19 under this section. For the purposes of this paragraph:

20 (i) the attributable amount shall not exceed the value of the

21 development fees actually imposed.




Page 196
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (ii) the attributable amount is equal to the total amount of development

2 fees paid by the taxpayer or by a contractor providing services to

3 the taxpayer and the total development fees credited in exchange

4 for the construction of, contribution to or dedication of real

5 property for providing public infrastructure, public safety or other

6 public services necessary to the development. The real property

7 must be the subject of the development fees.

8 (iii) "development fees" means fees imposed to offset capital costs of

9 providing public infrastructure, public safety or other public

10 services to a development and authorized pursuant to A.R.S.

11 Section 9-463.05, A.R.S. Section 11-1102 or A.R.S. Title 48

12 regardless of the jurisdiction to which the fees are paid.

13 (F) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS

14 DERIVED FROM THE VALUE OF EXISTING TENANT LEASES IN

15 PLACE AT THE TIME OF THE SALE SHALL BE EXEMPT FROM

16 TAX IMPOSED UNDER THIS SECTION. THE VALUE OF THE IN-

17 PLACE LEASES SHALL BE DETERMINED AS OF THE CLOSE OF

18 ESCROW OR TRANSFER OF TITLE AS FOLLOWS:

19 (I) FOR A RESIDENTIAL LEASE, THE VALUE OF THE IN-

20 PLACE LEASE IS THE TOTAL VALUE OF ALL EXPECTED

21 LEASE RECEIPTS THROUGH THE END OF THE CURRENT

22 LEASE TERM MULTIPLIED BY A FACTOR OF 1.5.

23 EXPECTED LEASE RECEIPTS INCLUDE NON-



Page 197
Attachment B
Amendments to the Phoenix City (Tax) Code
1 REFUNDABLE DEPOSITS AND EXCLUDES ALL

2 REFUNDABLE DEPOSITS REGARDLESS OF WHETHER

3 THE REFUNDABLE DEPOSIT MAY BE FORFEITED.

4 (II) FOR A COMMERCIAL LEASE, THE VALUE OF THE IN-

5 PLACE LEASE IS THE PRESENT VALUE OF THE

6 EXPECTED LEASE RECEIPTS THROUGH THE END OF THE

7 CURRENT LEASE TERM OR FIRST OPTION OF EITHER

8 PARTY TO TERMINATE THE LEASE, WHICHEVER IS LESS.

9 THE DISCOUNT RATE USED TO CALCULATE THE

10 PRESENT VALUE SHALL BE THE 100% MID-TERM

11 APPLICABLE FEDERAL RATE PUBLISHED BY THE

12 INTERNAL REVENUE SERVICE ASSOCIATED WITH THE

13 PAYMENT TERMS OF THE LEASE RELATED TO THE

14 MONTH PRECEDING THE CLOSE OF ESCROW PLUS

15 THREE (3) PERCENTAGE POINTS.

16 A TRANSACTION, WHETHER CHARACTERIZED AS A LEASE OR

17 OTHERWISE, WHICH IN SUBSTANCE IS A TRANSFER OF TITLE

18 OF OR EQUITABLE OWNERSHIP IN IMPROVED REAL

19 PROPERTY, INCLUDING ANY LEASE OF THE PROPERTY FOR A

20 TERM OF THIRTY (30) YEARS OR MORE (WITH ALL OPTIONS

21 FOR RENEWAL BEING INCLUDED AS A PART OF THE TERM) IS

22 DEEMED TO BE A SALE OF IMPROVED REAL PROPERTY




Page 198
Attachment B
Amendments to the Phoenix City (Tax) Code
1 PURSUANT TO SUBSECTION (A)(3) OF THIS SECTION AND IS

2 NOT CONSIDERED AN IN-PLACE LEASE.

3 (2) Deductions.

4 (A) ALL STATE AND COUNTY TAXES ASSOCIATED WITH THE

5 PROJECT AND REPORTED AND PAID TO THE DEPARTMENT OF

6 REVENUE BY A CONTRACTOR CONSTRUCTING THE

7 IMPROVEMENTS ON THE PROPERTY SHALL BE DEDUCTED

8 FROM THE SELLING PRICE.

9 (B) All amounts subject to the tax shall be allowed a deduction in the amount

10 of thirty-five percent (35%).

11 (B)(C) The gross proceeds of sales or gross income that is derived from a contract

12 entered into for the installation, assembly, repair or maintenance of

13 income-producing capital equipment, as defined in Section 14-110, that is

14 deducted from the retail classification pursuant to Section 14-465(g), that

15 does not become a permanent attachment to a building, highway, road,

16 railroad, excavation or manufactured building or other structure, project,

17 development or improvement shall be exempt from the tax imposed by

18 this Section. If the ownership of the realty is separate from the ownership

19 of the income-producing capital equipment, the determination as to

20 permanent attachment shall be made as if the ownership was the same.

21 The deduction provided in this paragraph does not include gross proceeds

22 of sales or gross income from that portion of any contracting activity




Page 199
Attachment B
Amendments to the Phoenix City (Tax) Code
1 which consists of the development of, or modification to, real property in

2 order to facilitate the installation, assembly, repair, maintenance or

3 removal of the income-producing capital equipment. For purposes of this

4 paragraph, "permanent attachment" means at least one of the following:

5 (i) to be incorporated into real property.

6 (ii) to become so affixed to real property that it becomes part of the

7 real property.

8 (iii) to be so attached to real property that removal would cause

9 substantial damage to the real property from which it is removed.

10 (C)(D) For taxable periods beginning from and after July 1, 2008 and ending

11 before January 1, 2017, the gross proceeds of sales or gross income

12 derived from a contract to provide and install a solar energy device. The

13 contractor shall register with the Department of Revenue as a solar energy

14 contractor. By registering, the contractor acknowledges that it will make

15 its books and records relating to sales of solar energy devices available to

16 the Department of Revenue and the City, as applicable, for examination.

17 (3) Tax credits.

18 The following tax credits are available to owner-builders or speculative builders, not to

19 exceed the tax liability against which such credits apply, provided such credits are

20 documented to the satisfaction of the Tax Collector:




Page 200
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (A) A tax credit equal to the amount of city privilege or use tax, or the equivalent

2 excise tax, paid directly to a taxing jurisdiction or as a separately itemized charge

3 paid directly to the vendor with respect to the tangible personal property

4 incorporated into the said structure or improvement to real property undertaken by

5 the owner-builder or speculative builder.

6 (B) A tax credit equal to the amount of privilege taxes paid to this City, or charged

7 separately to the speculative builder, by a construction contractor, on the gross

8 income derived by said person from the construction of any improvement to the

9 real property.

10 (C) A TAX CREDIT EQUAL TO THE AMOUNT OF PRIVILEGE TAXES PAID

11 TO THIS CITY BY ANY SPECULATIVE BUILDER ON THE GROSS

12 INCOME DERIVED BY SAID PERSON FROM THE SALE OF IMPROVED

13 REAL PROPERTY PURSUANT TO SUBSECTIONS (A)(2)(B) or (A)(2)(D) OF

14 THIS SECTION AGAINST THE GROSS INCOME OF ANY SPECULATIVE

15 BUILDER FROM THE SALE OF IMPROVED REAL PROPERTY

16 PURSUANT TO SUBSECTION (A)(2)(A).

17 (C)(D) No credits provided herein may be claimed until such time that the gross income

18 against which said credits apply is reported.


20 SECTION 14-416.1. SPECULATIVE BUILDERS: HOMEOWNER'S BONA FIDE NON-

21 BUSINESS SALE OF A FAMILY RESIDENCE.





Page 201
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (A) A SALE OF A HOME, REGARDLESS OF THE STAGE OF COMPLETION OF SUCH

2 HOME SHALL BE CONSIDERED A "HOMEOWNER'S BONA FIDE NON-

3 BUSINESS SALE" AND NOT SUBJECT TO THE TAX ON SPECULATIVE

4 BUILDERS IF:

5 (1) THE PROPERTY WAS ACTUALLY USED AS THE PRINCIPAL PLACE OF

6 FAMILY RESIDENCE OR VACATION RESIDENCE BY THE IMMEDIATE

7 FAMILY OF THE SELLER FOR THE SIX (6) MONTHS NEXT PRIOR TO

8 THE OFFER FOR SALE; AND

9 (2) THE SELLER HAS NOT SOLD MORE THAN TWO (2) SUCH RESIDENCES

10 (OR, IF THE RESIDENCE IS A VACATION RESIDENCE, TWO (2) SUCH

11 VACATION RESIDENCES) WITHIN THE THIRTY-SIX (36) MONTHS

12 IMMEDIATELY PRIOR TO THE OFFER FOR SALE; AND

13 (3) THE SELLER HAS NOT LICENSED, LEASED, OR RENTED THE SOLD

14 PREMISES FOR ANY PERIOD WITHIN TWENTY-FOUR (24) MONTHS

15 PRIOR TO THE OFFER FOR SALE.

16 (B) IN THE EVENT THAT A HOMEOWNER OF A FAMILY RESIDENCE

17 CONTRACTS WITH A LICENSED CONSTRUCTION CONTRACTOR FOR

18 IMPROVEMENTS TO A RESIDENCE, THE CONSTRUCTION CONTRACTING ON

19 A FAMILY RESIDENCE SHALL BE PRESUMED TO BE FOR AN OWNER'S BONA

20 FIDE NON-BUSINESS PURPOSE AND ALL CONSTRUCTION CONTRACTORS

21 SHALL BE REQUIRED TO REPORT AND PAY THE TAX IMPOSED ON ALL

22 SUCH IMPROVEMENTS.




Page 202
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (C) PURCHASES BY A HOMEOWNER OF TANGIBLE PERSONAL PROPERTY FOR

2 INCLUSION IN ANY CONSTRUCTION, ALTERATION, OR REPAIR OF HIS

3 RESIDENCE SHALL BE SUBJECT TO TAX AS RETAIL SALES TO THE

4 ULTIMATE CONSUMER.

5 (D) "OWNER", "HOMEOWNER", AND “SELLER” AS USED IN THIS SECTION SHALL

6 ONLY MEAN AN INDIVIDUAL OR QUALIFIED TRUST, AND NO OTHER

7 ENTITY, ASSOCIATION, OR REPRESENTATIVE SHALL QUALIFY; EXCEPT

8 THAT AN ADMINISTRATOR, EXECUTOR, PERSONAL REPRESENTATIVE, OR

9 GUARDIAN IN GUARDIANSHIP OR PROBATE PROCEEDINGS, FOR THE

10 ESTATE OF A DECEASED OR INCOMPETENT PERSON OR A MINOR, MAY

11 CLAIM "HOMEOWNER" STATUS FOR SUCH PERSON IF SUCH PERSON

12 WOULD HAVE OTHERWISE QUALIFIED WITH RESPECT TO THE SPECIFIC

13 PROPERTY INVOLVED.

14 (E) “QUALIFIED TRUST” AS USED IN THIS SECTION MEANS ANY LEGAL TRUST

15 WHERE A BENEFICIARY OF THE TRUST IS AN INDIVIDUAL THAT HAS BEEN

16 THE RESIDENT OF THE PROPERTY AND THAT INDIVIDUAL MEETS THE

17 CRITERIA LISTED IN SUBSECTION (A) OF THIS SECTION.


19 Reg. 14-416.1. Speculative builders: homeowner's bona fide non-business sale of a family

20 residence.





Page 203
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (a) A sale of a custom home, regardless of the stage of completion of such home shall be

2 considered a "homeowner's bona fide non-business sale" and not subject to the tax on

3 speculative builders if:

4 (1) the property was actually used as the principal place of family residence or

5 vacation residence by the immediate family of the seller for the six (6) months

6 next prior to the offer for sale; and

7 (2) the seller has not sold more than two (2) such residences (or, if the residence is a

8 vacation residence, two (2) such vacation residences) within the thirty-six (36)

9 months immediately prior to the offer for sale; and

10 (3) the seller has not licensed, leased, or rented the sold premises for any period

11 within twenty-four (24) months prior to the offer for sale.

12 (b) In the event that a homeowner of a family residence contracts with a licensed

13 construction contractor for improvements to a residence, the construction contracting on a

14 family residence shall be presumed to be for an owner's bona fide non-business purpose

15 and all construction contractors shall be required to report and pay the tax imposed on all

16 such improvements.

17 (c) Purchases by a homeowner of tangible personal property for inclusion in any

18 construction, alteration, or repair of his residence shall be subject to tax as retail sales to

19 the ultimate consumer.

20 (d) "Owner" and "Homeowner" as used in this Regulation shall only mean an individual, and

21 no other entity, association, or representative shall qualify; except that an administrator,

22 executor, personal representative, or guardian in guardianship or probate proceedings, for




Page 204
Attachment B
Amendments to the Phoenix City (Tax) Code
1 the estate of a deceased or incompetent person or a minor, may claim "homeowner" status

2 for such person if such person would have otherwise qualified with respect to the specific

3 property involved.


5 SECTION 14-416.2. RECONSTRUCTION CONTRACTING.


7 (A) "RECONSTRUCTION (OF REAL PROPERTY)" SHALL MEAN THE SUBDIVIDING

8 OF REAL PROPERTY AND, IN ADDITION, ALL CONSTRUCTION

9 CONTRACTING ACTIVITIES PERFORMED UPON SAID REAL PROPERTY;

10 PROVIDED, HOWEVER, THAT EACH OF THE FOLLOWING CONDITIONS ARE

11 MET:

12 (1) A STRUCTURE EXISTED ON SAID REAL PROPERTY PRIOR TO THE

13 RECONSTRUCTION ACTIVITY; AND

14 (2) THE "PRIOR VALUE" OF SAID STRUCTURE EXCEEDS FIFTEEN

15 PERCENT (15%) OF THE "PRIOR VALUE" OF THE INTEGRATED

16 PROPERTY (LAND, IMPROVEMENTS, AND STRUCTURE); AND

17 (3) THE TOTAL COST OF ALL CONSTRUCTION CONTRACTING

18 ACTIVITIES PERFORMED ON SAID REAL PROPERTY IN THE TWENTY-

19 FOUR (24) MONTH PERIOD PRIOR TO THE SALE OF ANY PART OF THE

20 REAL PROPERTY EXCEEDS FIFTEEN PERCENT (15%) OF THE "PRIOR

21 VALUE" OF THE REAL PROPERTY; AND




Page 205
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (4) THE STRUCTURE WHICH EXISTED ON THE REAL PROPERTY PRIOR TO

2 THE RECONSTRUCTION ACTIVITY STILL EXISTS IN SOME FORM

3 UPON THE PROPERTY, AND IS INCLUDED, IN WHOLE OR IN PART, IN

4 THE PROPERTY SOLD.

5 (B) EXCEPT AS PROVIDED IN SUBSECTION (C) BELOW, "PRIOR VALUE" MEANS

6 THE VALUE OF THE TOTAL INTEGRATED PROPERTY, WITH

7 IMPROVEMENTS, AS EXISTING IMMEDIATELY PRIOR TO ANY

8 RECONSTRUCTION ACTIVITY. WHERE, ACCORDING TO TITLE 42 OF THE

9 ARIZONA REVISED STATUTES, A PROPERTY'S FULL CASH VALUE FOR

10 SECONDARY TAX PURPOSES IS INTENDED TO REPRESENT THE PROPERTY'S

11 FAIR MARKET VALUE, "PRIOR VALUE" SHALL BE THE PROPERTY'S FULL

12 CASH VALUE FOR SECONDARY PROPERTY TAX PURPOSES AS

13 DETERMINED BY THE COUNTY ASSESSOR IN THE YEAR IMMEDIATELY

14 PRECEDING THE YEAR IN WHICH THE RECONSTRUCTION IMPROVEMENT(S)

15 ARE OR COULD HAVE BEEN INCLUDED IN THE COUNTY ASSESSOR'S

16 VALUATION. IF THE COUNTY ASSESSOR'S VALUATION IS CONTESTED OR

17 APPEALED, THE FINAL DETERMINATION AT EITHER THE ADMINISTRATIVE

18 OR JUDICIAL LEVEL SHALL APPLY. WHERE, ACCORDING TO TITLE 42 OF

19 THE ARIZONA REVISED STATUTES, A PROPERTY'S FULL CASH VALUE FOR

20 SECONDARY PROPERTY TAX PURPOSES IS NOT INTENDED TO REPRESENT

21 THE PROPERTY'S FAIR MARKET VALUE, "PRIOR VALUE" SHALL BE THE

22 PROPERTY'S FAIR MARKET VALUE PRIOR TO THE RECONSTRUCTION

23 IMPROVEMENT(S).




Page 206
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (C) "ALTERNATIVE PRIOR VALUE" SHALL MEAN THAT AS AN ALTERNATIVE

2 TO THE "PRIOR VALUE" DEFINED ABOVE, THE TAXPAYER MAY USE HIS

3 ACTUAL COST OF THE RECONSTRUCTED PROPERTY PRIOR TO

4 RECONSTRUCTION, PROVIDED THAT EVIDENCE OF SUCH COST IS

5 PRESENTED TO THE TAX COLLECTOR AND IS DETERMINED BY THE TAX

6 COLLECTOR, IN HIS SOLE DISCRETION, TO BE SATISFACTORY. SUCH

7 EVIDENCE SHALL CONSIST, AT A MINIMUM, OF PROOF OF THE ACTUAL,

8 ARMS-LENGTH ACQUISITION PRICE, ACCOMPANIED BY A FULL APPRAISAL

9 OF ALL PROPERTY INVOLVED WHICH APPRAISAL SHALL HAVE BEEN

10 PERFORMED BY A REAL ESTATE BROKER OR MAI APPRAISER

11 SPECIFICALLY FOR THE PURPOSE OF ASSISTING IN THE ACQUISITION AND

12 FURTHER SHALL HAVE BEEN PERFORMED ON BEHALF OF THE SELLER OR

13 A LENDING INSTITUTION WHICH HAS LENT AT LEAST SIXTY-FIVE

14 PERCENT (65%) OF THE ACQUISITION PRICE. (ONLY LONG-TERM LENDING -

15 NOT INTERIM OR CONSTRUCTION FINANCING WILL BE CONSIDERED.) THIS

16 ALTERNATIVE VALUE SHALL BE USED ONLY IF THE PROPERTY WAS

17 ACQUIRED BY THE RECONSTRUCTION TAXPAYER NOT MORE THAN

18 THIRTY-SIX (36) MONTHS PRIOR TO A "SALE" AS DEFINED BELOW.

19 (D) A "SALE" FOR THE PURPOSE OF DETERMINING "ALTERNATIVE PRIOR

20 VALUE" OR "RECONSTRUCTION" ONLY SHALL BE DEEMED TO HAVE

21 OCCURRED AS OF THE DATE OF THE EXECUTION OF A CONTRACT OF SALE

22 OR A DEED (JOINT TENANCY OR WARRANTY) WHICHEVER IS EARLIER, TO

23 A PURCHASER OR GRANTEE OF ANY SINGLE RESIDENTIAL OR OTHER




Page 207
Attachment B
Amendments to the Phoenix City (Tax) Code
1 OCCUPANCY UNIT. IN ADDITION TO THE FOREGOING, A LEASE WITH

2 OPTION TO PURCHASE A SINGLE RESIDENTIAL UNIT SHALL BE

3 CONSIDERED A "SALE" AT THE DATE OF EXECUTION OF SUCH LEASE IF

4 SAID OPTION IS EXERCISABLE BY THE LESSEE IN NOT LATER THAN NINE

5 (9) MONTHS. FURTHER IN THE CASE OF COOPERATIVE APARTMENTS, THE

6 SALE DATE SHALL BE THE DATE OF EXECUTION OF THE CONTRACT

7 SELLING (SUBJECT OR NOT TO ENCUMBRANCES, LIENS OR SECURITY

8 INTERESTS) OF A SHARE, OR A SUFFICIENT NUMBER OF SHARES WHICH

9 ENTITLE THE PURCHASER TO THE OCCUPANCY OF A RESIDENTIAL UNIT.

10 IN ALL CASES A PERSON SHALL INCLUDE A HUSBAND AND WIFE AS A

11 COMMUNITY, OR ANY CO-OCCUPANTS OF A SINGLE UNIT AS JOINT

12 TENANTS.


14 Reg. 14-416.2. Reconstruction contracting.


16 (a) "Reconstruction (of Real Property)" shall mean the subdividing of real property and, in

17 addition, all construction contracting activities performed upon said real property;

18 provided, however, that each of the following conditions are met:

19 (1) a structure existed on said real property prior to the reconstruction activity; and

20 (2) the "prior value" of said structure exceeds fifteen percent (15%) of the "prior

21 value" of the integrated property (land, improvements, and structure); and




Page 208
Attachment B
Amendments to the Phoenix City (Tax) Code
1 (3) the total cost of all construction contracting activities performed on said real

2 property in the twenty-four (24) month period prior to the sale of any part of the

3 real property exceeds fifteen percent (15%) of the "prior value" of the real

4 property; and

5 (4) the structure which existed on the real property prior to the reconstruction activity

6 still exists in some form upon the property, and is included, in whole or in part, in

7 the property sold.

8 (b) Except as provided in subsection (c) below, "prior value" means the value of the total

9 integrated property, with improvements, as existing immediately prior to any

10 reconstruction activity. Where, according to Title 42 of the Arizona Revised Statutes, a

11 property's full cash value for secondary tax purposes is intended to represent the

12 property's fair market value, "prior value" shall be the property's full cash value for

13 secondary property tax purposes as determined by the County Assessor in the year

14 immediately preceding the year in which the reconstruction improvement(s) are or could

15 have been included in the County Assessor's valuation. If the County Assessor's valuation

16 is contested or appealed, the final determination at either the administrative or judicial

17 level shall apply. Where, according to Title 42 of the Arizona Revised Statutes, a

18 property's full cash value for secondary property tax purposes is not intended to represent

19 the property's fair market value, "prior value" shall be the property's fair market value

20 prior to the reconstruction improvement(s).

21 (c) "Alternative Prior Value" shall mean that as an alternative to the "prior value" defined

22 above, the taxpayer may use his actual cost of the reconstructed property prior to

23 reconstruction, provided that evidence of such cost is presented to the Tax Collector and



Page 209
Attachment B
Amendments to the Phoenix City (Tax) Code
1 is determined by the Tax Collector, in his sole discretion, to be satisfactory. Such

2 evidence shall consist, at a minimum, of proof of the actual, arms-length acquisition

3 price, accompanied by a full appraisal of all property involved which appraisal shall have

4 been performed by a real estate broker or MAI appraiser specifically for the purpose of

5 assisting in the acquisition and further shall have been performed on behalf of the seller

6 or a lending institution which has lent at least sixty-five percent (65%) of the acquisition

7 price. (Only long term lending - not interim or construction financing will be considered.)

8 This alternative value shall be used only if the property was acquired by the

9 reconstruction taxpayer not more than thirty-six (36) months prior to a "sale" as defined

10 below.

11 (d) A "sale" for the purpose of determining "alternative prior value" or "reconstruction" only

12 shall be deemed to have occurred as of the date of the execution of a contract of sale or a

13 deed (joint tenancy or warranty) whichever is earlier, to a purchaser or grantee of any

14 single residential or other occupancy unit. In addition to the foregoing, a lease with

15 option to purchase a single residential unit shall be considered a "sale" at the date of

16 execution of such lease if said option is exercisable by the lessee in not later than nine (9)

17 months. Further in the case of cooperative apartments, the sale date shall be the date of

18 execution of the contract selling (subject or not to encumbrances, liens or security

19 interests) of a share, or a sufficient number of shares which entitle the purchaser to the

20 occupancy of a residential unit. In all cases a person shall include a husband and wife as a

21 community, or any co -occupants of a single unit as joint tenants.





Page 210



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