Bill Text: AZ SB1305 | 2019 | Fifty-fourth Legislature 1st Regular | Engrossed
Bill Title: Peer-to-peer car sharing; taxation
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2019-03-26 - House COM Committee action: Failed To Pass, voting: (3-5-1-0-0-0) [SB1305 Detail]
Download: Arizona-2019-SB1305-Engrossed.html
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Senate Engrossed |
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State of Arizona Senate Fifty-fourth Legislature First Regular Session 2019
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SENATE BILL 1305 |
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AN ACT
amending title 28, Arizona Revised Statutes, by adding chapter 31; amending sections 42‑2003, 42-5001, 42‑5005, 42‑5009, 42‑5014, 42‑5040 and 42‑5071, Arizona Revised Statutes; amending title 42, chapter 6, article 1, Arizona Revised Statutes, by adding section 42-6017; relating to transportation.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 28, Arizona Revised Statutes, is amended by adding chapter 31, to read:
CHAPTER 31
PEER-TO-PEER CAR SHARING
ARTICLE 1. GENERAL PROVISIONS
28-9601. Definitions
In this chapter, unless the context otherwise requires:
1. "Car sharing delivery period" means the period of time during which a shared vehicle is being delivered to the location of the car sharing start time as documented by the governing car sharing program agreement.
2. "Car sharing period" means the period of time that begins with the car sharing delivery period or the car sharing start time if there is no car sharing delivery period and ends at the car sharing termination time.
3. "Car sharing program agreement" means the terms and conditions that apply to a shared vehicle owner and a shared vehicle driver and that govern the use of a shared vehicle through a peer-to-peer car sharing program.
4. "Car sharing start time" means the time when a shared vehicle becomes subject to the control of the shared vehicle driver at or after the time that the reservation of the shared vehicle is scheduled to begin as documented in the records of a peer–to–peer car sharing program.
5. "Car sharing termination time" means the time when a shared vehicle is returned to the location designated by a shared vehicle owner through a peer-to-peer car sharing program and The earliest of the following:
(a) The agreed period of time established for the use of a shared vehicle in the governing car sharing program agreement expires.
(b) The intent to terminate the use of the shared vehicle is verifiably communicated by the shared vehicle driver to the shared vehicle owner.
(c) The shared vehicle owner or the shared vehicle owner's authorized designee takes possession and control of the shared vehicle.
6. "Peer-to-peer car sharing" means the authorized use of a shared vehicle by an individual other than the shared vehicle owner through a peer-to-peer car sharing program.
7. "Peer-to-peer car sharing program" means a business platform that connects vehicle owners with drivers to enable the sharing of vehicles for financial consideration.
8. "Shared vehicle" means a vehicle that is available for sharing through a peer‑to‑peer car sharing program.
9. "Shared vehicle driver" means an individual who is authorized to drive a shared vehicle under a car sharing program agreement.
10. "Shared vehicle owner" means the registered owner of a shared vehicle that is made available for sharing through a peer-to-peer car sharing program.
28-9602. Vehicle rental transactions; applicability of rental vehicle laws
A. A vehicle rental transaction that is facilitated by a peer‑to‑peer car sharing program is subject to all laws imposing taxes or fees on private passenger motor vehicle rental transactions and companies, including sections 5‑839, 28-5810 and 48‑4234.
B. A peer-to-peer car sharing program that offers or sells insurance policies pursuant to section 20‑331, subsection C shall be licensed as either:
1. An insurance producer with a property or casualty, or both, line of authority pursuant to section 20‑286. A peer‑to‑peer car sharing program licensed pursuant to this paragraph is subject to section 20‑331, subsections E, H and I.
2. A rental car agent pursuant to section 20‑331 if the peer‑to‑peer car sharing program sells insurance products described in section 20‑331.
C. This section does not prohibit or restrict a public airport from implementing rules or licensing requirements or from assessing fees or charges to apply to peer‑to‑peer car sharing transactions that are conducted at the public airport.
28-9603. Insurance requirements; liability; indemnification
A. Except as otherwise provided in this subsection, a peer‑to‑peer car sharing program shall assume liability of a shared vehicle owner for bodily injury or property damage to a third party or uninsured and underinsured motorist or personal injury protection losses during the car sharing period in an amount that is stated in the car sharing program agreement and that is not less than the minimum amount of coverage required by section 28‑4009. This subsection does not apply if the shared vehicle owner makes an intentional or fraudulent material misrepresentation to the peer‑to‑peer car sharing program before the car sharing period in which the loss occurs.
B. A peer-to-peer car sharing program shall ensure that during each car sharing period the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that:
1. Recognizes that the vehicle insured under the policy is made available and used through a peer-to-peer car sharing program.
2. Provides insurance coverage in an amount not less than the minimum amount of coverage required by section 28‑4009.
C. The insurance required by this section may be satisfied by motor vehicle liability insurance that is maintained by any of the following or a combination of all of the following:
1. A shared vehicle owner.
2. A shared vehicle driver.
3. A peer-to-peer car sharing program.
D. The insurance required by this section is primary during each car sharing period.
E. If insurance is maintained by a shared vehicle owner or shared vehicle driver pursuant to subsection C of this section and has lapsed or does not provide the required coverage:
1. Insurance that is maintained by a peer‑to‑peer car sharing program shall provide the coverage required by subsection B of this section beginning with the first dollar of a claim.
2. The peer‑to‑peer car sharing program shall defend a claim.
F. Coverage under a motor vehicle liability insurance policy that is maintained by a peer‑to‑peer car sharing program is not dependent on a personal motor vehicle liability insurer first denying a claim.
G. This chapter does not limit either of the following:
1. The liability of the peer-to-peer car sharing program for any act or omission of the peer-to-peer car sharing program that results in injury to any person as a result of the use of a shared vehicle.
2. The ability of the peer-to-peer car sharing program to, by contract, seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer car sharing program resulting from a breach of the terms and conditions of the car sharing program agreement.
28-9604. Notice to owner of vehicle with lien
A. When a person becomes a shared vehicle owner on a peer-to-peer car sharing program, the peer-to-peer car sharing program shall notify the shared vehicle owner that if the shared vehicle has a lien, using the shared vehicle through a peer-to-peer car sharing program, including using the shared vehicle without physical damage coverage, may violate the terms of the contract with the lienholder.
B. The peer‑to‑peer car sharing program shall provide the notice prescribed in subsection A of this section before the shared vehicle owner makes a shared vehicle available for peer‑to‑peer car sharing on the peer‑to‑peer car sharing program.
28-9605. Authorized insurer exclusions
An authorized insurer that writes motor vehicle liability insurance in this state may exclude any coverage and the duty to defend or indemnify any claim afforded under a shared vehicle owner's personal motor vehicle liability insurance policy. A motor vehicle insurer may limit the number of vehicles that the motor vehicle insurer will insure on a single policy if the vehicles are made available for sharing through a peer-to-peer car sharing program. This chapter does not invalidate or limit an exclusion contained in a motor vehicle liability insurance policy, including an insurance policy in use or approved for use that excludes coverage for motor vehicles made available for rent, sharing or hire or for any business use.
28-9606. Shared vehicle records; retention
A peer-to-peer car sharing program shall collect and verify records relating to the use of a shared vehicle, including times used, fees paid by the shared vehicle driver and monies received by the shared vehicle owner, and provide that information on request to the shared vehicle owner, the shared vehicle owner's insurer or the shared vehicle driver's insurer to facilitate a claim coverage investigation. The peer-to-peer car sharing program shall retain the records for at least two years.
28-9607. Insurance claims; shared vehicles; indemnification
A motor vehicle insurer that defends or indemnifies a claim against a shared vehicle that is excluded under the terms of the motor vehicle insurer's policy may seek indemnification from the motor vehicle insurer of the peer-to-peer car sharing program if the claim is both:
1. Made against the shared vehicle owner or the shared vehicle driver for loss or injury that occurs during the car sharing period.
2. Excluded under the terms of its policy.
28-9608. Insurable interests
A. Notwithstanding any other law, a peer-to-peer car sharing program has an insurable interest in a shared vehicle during the car sharing period.
B. This section does not impose liability on a Peer-to-Peer Car Sharing Program to maintain the coverage mandated by section 28‑9603.
28-9609. Car sharing program agreement disclosures
Each car sharing program agreement made in this State shall disclose to the shared vehicle owner and the shared vehicle driver:
1. Any right of the peer-to-peer car sharing program to seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer car sharing program resulting from a breach of the terms and conditions of the car sharing program agreement.
2. That a motor vehicle liability insurance policy issued to the shared vehicle owner for the shared vehicle or to the shared vehicle driver does not provide a defense or indemnification for any claim asserted by the peer-to-peer car sharing program.
3. That the peer-to-peer car sharing program's insurance coverage on the shared vehicle owner and the shared vehicle driver is in effect only during each car sharing period and that, for any use of the shared vehicle by the shared vehicle driver after the car sharing termination time, the shared vehicle driver and the shared vehicle owner might not have insurance coverage.
4. The daily rate, fees and insurance, if applicable, or protection package costs that are charged to the shared vehicle owner or the shared vehicle driver.
5. That the shared vehicle owner's motor vehicle liability insurance might not provide coverage for a shared vehicle.
6. An emergency telephone number for roadside assistance and other customer service inquiries.
28-9610. Car sharing program agreement; licensed driver; data retention
A. A person may not enter into a car sharing program agreement with a driver unless the driver:
1. Holds a driver license issued by the department that authorizes the driver to operate the class of the shared vehicle.
2. Is a nonresident who both:
(a) Has a driver license issued by the state or country of the driver's residence that authorizes the driver in that state or country to drive vehicles of the class of the shared vehicle.
(b) Is at least the same age as that required of a resident to drive.
3. Otherwise is specifically authorized by the department to drive vehicles of the class of the shared vehicle.
B. A peer-to-peer car sharing program shall keep a record of:
1. The name and address of each shared vehicle driver.
2. The driver license number of the shared vehicle driver.
3. The date and place of issuance of the shared vehicle driver's driver license.
28-9611. Responsibility for equipment
A peer-to-peer car sharing program has sole responsibility for any equipment, including a global positioning system or other special equipment, that is put in or on a shared vehicle to monitor or facilitate the car sharing transaction and shall agree to indemnify and hold harmless the shared vehicle owner for any damage to or theft of the equipment during the car sharing period if the shared vehicle owner does not cause the damage or theft. The peer-to-peer car sharing program may seek indemnity from the shared vehicle driver for any loss or damage to the equipment that occurs during the sharing period.
28-9612. Safety recalls
A. When a vehicle owner becomes a shared vehicle owner on a peer‑to‑peer car sharing program and before the shared vehicle owner makes a shared vehicle available for peer‑to‑peer car sharing on the peer‑to‑peer car sharing program, the peer-to-peer car sharing program shall:
1. Verify that the shared vehicle does not have any safety recalls on the shared vehicle for which the repairs are not made.
2. Notify the shared vehicle owner of the requirements prescribed by subsections B, C and D of this section.
B. If a vehicle owner has received an actual notice of a safety recall on the owner's vehicle, the vehicle owner may not make the vehicle available as a shared vehicle until the safety recall repair is made.
C. If a shared vehicle owner receives a notice of a safety recall on the shared vehicle while the shared vehicle is made available on the peer‑to‑peer car sharing program, the shared vehicle owner shall remove the shared vehicle from availability on the peer-to-peer car sharing program as soon as practicable but not later than seventy-two hours after receiving the notice of the safety recall. The shared vehicle owner may not make the shared vehicle available on the peer‑to‑peer car sharing program until the safety recall repair is made.
D. If a shared vehicle owner receives a notice of a safety recall while the shared vehicle is in the possession of a shared vehicle driver, as soon as practicable but not later than twenty-four hours after receiving the notice of the safety recall, the shared vehicle owner shall notify the peer-to-peer car sharing program about the safety recall so that the shared vehicle owner may make the safety recall repair.
Sec. 2. Section 42-2003, Arizona Revised Statutes, is amended to read:
42-2003. Authorized disclosure of confidential information
A. Confidential information relating to:
1. A taxpayer may be disclosed to the taxpayer, its successor in interest or a designee of the taxpayer who is authorized in writing by the taxpayer. A principal corporate officer of a parent corporation may execute a written authorization for a controlled subsidiary.
2. A corporate taxpayer may be disclosed to any principal officer, any person designated by a principal officer or any person designated in a resolution by the corporate board of directors or other similar governing body. If a corporate officer signs a statement under penalty of perjury representing that the officer is a principal officer, the department may rely on the statement until the statement is shown to be false. For the purposes of this paragraph, "principal officer" includes a chief executive officer, president, secretary, treasurer, vice president of tax, chief financial officer, chief operating officer or chief tax officer or any other corporate officer who has the authority to bind the taxpayer on matters related to state taxes.
3. A partnership may be disclosed to any partner of the partnership. This exception does not include disclosure of confidential information of a particular partner unless otherwise authorized.
4. A limited liability company may be disclosed to any member of the company or, if the company is manager‑managed, to any manager.
5. An estate may be disclosed to the personal representative of the estate and to any heir, next of kin or beneficiary under the will of the decedent if the department finds that the heir, next of kin or beneficiary has a material interest that will be affected by the confidential information.
6. A trust may be disclosed to the trustee or trustees, jointly or separately, and to the grantor or any beneficiary of the trust if the department finds that the grantor or beneficiary has a material interest that will be affected by the confidential information.
7. A government entity may be disclosed to the head of the entity or a member of the governing board of the entity, or any employee of the entity who has been delegated the authorization in writing by the head of the entity or the governing board of the entity.
8. Any taxpayer may be disclosed if the taxpayer has waived any rights to confidentiality either in writing or on the record in any administrative or judicial proceeding.
9. The name and taxpayer identification numbers of persons issued direct payment permits may be publicly disclosed.
10. Any taxpayer may be disclosed during a meeting or telephone call if the taxpayer is present during the meeting or telephone call and authorizes the disclosure of confidential information.
B. Confidential information may be disclosed to:
1. Any employee of the department whose official duties involve tax administration.
2. The office of the attorney general solely for its use in preparation for, or in an investigation that may result in, any proceeding involving tax administration before the department or any other agency or board of this state, or before any grand jury or any state or federal court.
3. The department of liquor licenses and control for its use in determining whether a spirituous liquor licensee has paid all transaction privilege taxes and affiliated excise taxes incurred as a result of the sale of spirituous liquor, as defined in section 4‑101, at the licensed establishment and imposed on the licensed establishments by this state and its political subdivisions.
4. Other state tax officials whose official duties require the disclosure for proper tax administration purposes if the information is sought in connection with an investigation or any other proceeding conducted by the official. Any disclosure is limited to information of a taxpayer who is being investigated or who is a party to a proceeding conducted by the official.
5. The following agencies, officials and organizations, if they grant substantially similar privileges to the department for the type of information being sought, pursuant to statute and a written agreement between the department and the foreign country, agency, state, Indian tribe or organization:
(a) The United States internal revenue service, alcohol and tobacco tax and trade bureau of the United States treasury, United States bureau of alcohol, tobacco, firearms and explosives of the United States department of justice, United States drug enforcement agency and federal bureau of investigation.
(b) A state tax official of another state.
(c) An organization of states, federation of tax administrators or multistate tax commission that operates an information exchange for tax administration purposes.
(d) An agency, official or organization of a foreign country with responsibilities that are comparable to those listed in subdivision (a), (b) or (c) of this paragraph.
(e) An agency, official or organization of an Indian tribal government with responsibilities comparable to the responsibilities of the agencies, officials or organizations identified in subdivision (a), (b) or (c) of this paragraph.
6. The auditor general, in connection with any audit of the department subject to the restrictions in section 42‑2002, subsection D.
7. Any person to the extent necessary for effective tax administration in connection with:
(a) The processing, storage, transmission, destruction and reproduction of the information.
(b) The programming, maintenance, repair, testing and procurement of equipment for purposes of tax administration.
(c) The collection of the taxpayer's civil liability.
8. The office of administrative hearings relating to taxes administered by the department pursuant to section 42‑1101, but the department shall not disclose any confidential information without the taxpayer's written consent:
(a) Regarding income tax or withholding tax.
(b) On any tax issue relating to information associated with the reporting of income tax or withholding tax.
9. The United States treasury inspector general for tax administration for the purpose of reporting a violation of internal revenue code section 7213A (26 United States Code section 7213A), unauthorized inspection of returns or return information.
10. The financial management service of the United States treasury department for use in the treasury offset program.
11. The United States treasury department or its authorized agent for use in the state income tax levy program and in the electronic federal tax payment system.
12. The Arizona commerce authority for its use in:
(a) Qualifying renewable energy operations for the tax incentives under section 42‑12006.
(b) Qualifying businesses with a qualified facility for income tax credits under sections 43‑1083.03 and 43‑1164.04.
(c) Fulfilling its annual reporting responsibility pursuant to section 41‑1511, subsections U and V and section 41‑1512, subsections U and V.
(d) Certifying computer data centers for tax relief under section 41‑1519.
13. A prosecutor for purposes of section 32‑1164, subsection C.
14. The office of the state fire marshal for use in determining compliance with and enforcing title 37, chapter 9, article 5.
15. The department of transportation for its use in administering taxes, surcharges and penalties prescribed by title 28.
16. The Arizona health care cost containment system administration for its use in administering nursing facility provider assessments.
17. The department of administration risk management division and the office of the attorney general if the information relates to a claim against this state pursuant to section 12‑821.01 involving the department of revenue.
18. Another state agency if the taxpayer authorizes the disclosure of confidential information in writing, including an authorization that is part of an application form or other document submitted to the agency.
19. The department of economic security for its use in determining whether an employer has paid all amounts due under the unemployment insurance program pursuant to title 23, chapter 4.
C. Confidential information may be disclosed in any state or federal judicial or administrative proceeding pertaining to tax administration pursuant to the following conditions:
1. One or more of the following circumstances must apply:
(a) The taxpayer is a party to the proceeding.
(b) The proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of the taxpayer's civil liability, with respect to any tax imposed under this title or title 43.
(c) The treatment of an item reflected on the taxpayer's return is directly related to the resolution of an issue in the proceeding.
(d) Return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer and directly affects the resolution of an issue in the proceeding.
2. Confidential information may not be disclosed under this subsection if the disclosure is prohibited by section 42‑2002, subsection C or D.
D. Identity information may be disclosed for purposes of notifying persons entitled to tax refunds if the department is unable to locate the persons after reasonable effort.
E. The department, on the request of any person, shall provide the names and addresses of bingo licensees as defined in section 5‑401, verify whether or not a person has a privilege license and number, a tobacco product distributor's license and number or a withholding license and number or disclose the information to be posted on the department's website or otherwise publicly accessible pursuant to section 42‑1124, subsection F and section 42‑3401.
F. A department employee, in connection with the official duties relating to any audit, collection activity or civil or criminal investigation, may disclose return information to the extent that disclosure is necessary to obtain information that is not otherwise reasonably available. These official duties include the correct determination of and liability for tax, the amount to be collected or the enforcement of other state tax revenue laws.
G. Confidential information relating to transaction privilege tax, use tax, severance tax, jet fuel excise and use tax and any other tax collected by the department on behalf of any jurisdiction may be disclosed to any county, city or town tax official if the information relates to a taxpayer who is or may be taxable by a county, city or town or who may be subject to audit by the department pursuant to section 42‑6002. Any taxpayer information released by the department to the county, city or town:
1. May only be used for internal purposes, including audits.
2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The county, city or town shall agree in writing with the department that any release of confidential information that violates the confidentiality standards adopted by the department will result in the immediate suspension of any rights of the county, city or town to receive taxpayer information under this subsection.
H. The department may disclose statistical information gathered from confidential information if it does not disclose confidential information attributable to any one taxpayer. The department may disclose statistical information gathered from confidential information, even if it discloses confidential information attributable to a taxpayer, to:
1. The state treasurer in order to comply with the requirements of section 42‑5029, subsection A, paragraph 3.
2. The joint legislative income tax credit review committee, the joint legislative budget committee staff and the legislative staff in order to comply with the requirements of section 43‑221.
I. The department may disclose the aggregate amounts of any tax credit, tax deduction or tax exemption enacted after January 1, 1994. Information subject to disclosure under this subsection shall not be disclosed if a taxpayer demonstrates to the department that such information would give an unfair advantage to competitors.
J. Except as provided in section 42‑2002, subsection C, confidential information, described in section 42‑2001, paragraph 1, subdivision (a), item (ii), may be disclosed to law enforcement agencies for law enforcement purposes.
K. The department may provide transaction privilege tax license information to property tax officials in a county for the purpose of identification and verification of the tax status of commercial property.
L. The department may provide transaction privilege tax, luxury tax, use tax, property tax and severance tax information to the ombudsman‑citizens aide pursuant to title 41, chapter 8, article 5.
M. Except as provided in section 42‑2002, subsection D, a court may order the department to disclose confidential information pertaining to a party to an action. An order shall be made only on a showing of good cause and that the party seeking the information has made demand on the taxpayer for the information.
N. This section does not prohibit the disclosure by the department of any information or documents submitted to the department by a bingo licensee. Before disclosing the information the department shall obtain the name and address of the person requesting the information.
O. If the department is required or permitted to disclose confidential information, it may charge the person or agency requesting the information for the reasonable cost of its services.
P. Except as provided in section 42‑2002, subsection D, the department of revenue shall release confidential information as requested by the department of economic security pursuant to section 42‑1122 or 46‑291. Information disclosed under this subsection is limited to the same type of information that the United States internal revenue service is authorized to disclose under section 6103(l)(6) of the internal revenue code.
Q. Except as provided in section 42‑2002, subsection D, the department of revenue shall release confidential information as requested by the courts and clerks of the court pursuant to section 42‑1122.
R. To comply with the requirements of section 42‑5031, the department may disclose to the state treasurer, to the county stadium district board of directors and to any city or town tax official that is part of the county stadium district confidential information attributable to a taxpayer's business activity conducted in the county stadium district.
S. The department shall release to the attorney general confidential information as requested by the attorney general for purposes of determining compliance with or enforcing any of the following:
1. Any public health control law relating to tobacco sales as provided under title 36, chapter 6, article 14.
2. Any law relating to reduced cigarette ignition propensity standards as provided under title 37, chapter 9, article 5.
3. Sections 44‑7101 and 44‑7111, the master settlement agreement referred to in those sections and all agreements regarding disputes under the master settlement agreement.
T. For proceedings before the department, the office of administrative hearings, the board of tax appeals or any state or federal court involving penalties that were assessed against a return preparer, an electronic return preparer or a payroll service company pursuant to section 42‑1103.02, 42‑1125.01 or 43‑419, confidential information may be disclosed only before the judge or administrative law judge adjudicating the proceeding, the parties to the proceeding and the parties' representatives in the proceeding prior to its introduction into evidence in the proceeding. The confidential information may be introduced as evidence in the proceeding only if the taxpayer's name, the names of any dependents listed on the return, all social security numbers, the taxpayer's address, the taxpayer's signature and any attachments containing any of the foregoing information are redacted and if either:
1. The treatment of an item reflected on such return is or may be related to the resolution of an issue in the proceeding.
2. Such a return or the return information relates or may relate to a transactional relationship between a person who is a party to the proceeding and the taxpayer that directly affects the resolution of an issue in the proceeding.
3. The method of payment of the taxpayer's withholding tax liability or the method of filing the taxpayer's withholding tax return is an issue for the period.
U. The department and attorney general may share the information specified in subsection S of this section with any of the following:
1. Federal, state or local agencies located in this state for the purposes of enforcement of the statutes or agreements specified in subsection S of this section or for the purposes of enforcement of corresponding laws of other states.
2. Indian tribes located in this state for the purposes of enforcement of the statutes or agreements specified in subsection S of this section.
3. A court, arbitrator, data clearinghouse or similar entity for the purpose of assessing compliance with or making calculations required by the master settlement agreement or agreements regarding disputes under the master settlement agreement, and with counsel for the parties or expert witnesses in any such proceeding, if the information otherwise remains confidential.
V. The department may provide the name and address of qualifying hospitals and qualifying health care organizations, as defined in section 42‑5001, to a business classified and reporting transaction privilege tax under the utilities classification.
W. The department may disclose to an official of any city, town or county in a current agreement or considering a prospective agreement with the department as described in section 42‑5032.02, subsection G any information relating to amounts subject to distribution required by section 42‑5032.02. Information disclosed by the department under this subsection:
1. May only be used by the city, town or county for internal purposes.
2. May not be disclosed to the public in any manner that does not comply with confidentiality standards established by the department. The city, town or county must agree with the department in writing that any release of confidential information that violates the confidentiality standards will result in the immediate suspension of any rights of the city, town or county to receive information under this subsection.
X. Notwithstanding any other provision of this section, the department may not disclose information provided by an online lodging marketplace, as defined in section 42‑5076, or a peer‑to‑peer car sharing program, as defined in section 28‑9601, without the written consent of the online lodging marketplace or peer‑to‑peer car sharing program, and the information may be disclosed only pursuant to subsection A, paragraphs 1 through 6, 8 and 10, subsection B, paragraphs 1, 2, 7 and 8 and subsections C and D of this section. Such information:
1. Is not subject to disclosure pursuant to title 39, relating to public records.
2. May not be disclosed to any agency of this state or of any county, city, town or other political subdivision of this state.
Sec. 3. Section 42-5001, Arizona Revised Statutes, is amended to read:
42-5001. Definitions
In this article and article 2 of this chapter, unless the context otherwise requires:
1. "Business" includes all activities or acts, personal or corporate, that are engaged in or caused to be engaged in with the object of gain, benefit or advantage, either directly or indirectly, but does not include either:
(a) Casual activities or sales.
(b) The transfer of electricity from a solar photovoltaic generation system to an electric utility distribution system.
2. "Distribution base" means the portion of the revenues derived from the tax levied by this article and articles 5 and 8 of this chapter designated for distribution to counties, municipalities and other purposes according to section 42‑5029, subsection D.
3. "Engaging", when used with reference to engaging or continuing in business, includes the exercise of corporate or franchise powers.
4. "Gross income" means the gross receipts of a taxpayer derived from trade, business, commerce or sales and the value proceeding or accruing from the sale of tangible personal property or service, or both, and without any deduction on account of losses.
5. "Gross proceeds of sales" means the value proceeding or accruing from the sale of tangible personal property without any deduction on account of the cost of property sold, expense of any kind or losses, but cash discounts allowed and taken on sales are not included as gross income.
6. "Gross income" and "gross proceeds of sales" do not include goods, wares or merchandise, or the value thereof, returned by customers if the sale price is refunded either in cash or by credit, nor or the value of merchandise traded in on the purchase of new merchandise when the trade‑in allowance is deducted from the sales price of the new merchandise before completion of the sale.
7. "Gross receipts" means the total amount of the sale, lease or rental price, as the case may be, of the retail sales of retailers, including any services that are a part of the sales, valued in money, whether received in money or otherwise, including all receipts, cash, credits and property of every kind or nature, and any amount for which credit is allowed by the seller to the purchaser without any deduction from the amount on account of the cost of the property sold, materials used, labor or service performed, interest paid, losses or any other expense. Gross receipts do not include cash discounts allowed and taken nor or the sale price of property returned by customers if the full sale price is refunded either in cash or by credit.
8. "Lessor" includes:
(a) Each person engaged in the business classified under the personal property rental classification pursuant to section 42‑5071.
(b) If in the department's opinion it is necessary for the efficient administration of this article, a dealer, broker or other person acting on behalf of a lessor who receives for the lessor all or part of the gross income from the taxable activity.
8. 9. "Person" or "company" includes an individual, firm, partnership, joint venture, association, corporation, estate or trust, this state, any county, city, town, district, other than a school district, or other political subdivision and any other group or combination acting as a unit, and the plural as well as the singular number.
9. 10. "Qualifying community health center":
(a) Means an entity that is recognized as nonprofit under section 501(c)(3) of the United States internal revenue code, that is a community‑based, primary care clinic that has a community‑based board of directors and that is either:
(i) The sole provider of primary care in the community.
(ii) A nonhospital affiliated clinic that is located in a federally designated medically underserved area in this state.
(b) Includes clinics that are being constructed as qualifying community health centers.
10. 11. "Qualifying health care organization" means an entity that is recognized as nonprofit under section 501(c) of the United States internal revenue code and that uses, saves or invests at least eighty per cent percent of all monies that it receives from all sources each year only for health and medical related educational and charitable services, as documented by annual financial audits prepared by an independent certified public accountant, performed according to generally accepted auditing standards and filed annually with the department. Monies that are used, saved or invested to lease, purchase or construct a facility for health and medical related education and charitable services are included in the eighty per cent percent requirement.
11. 12. "Qualifying health sciences educational institution" means an entity that is recognized as nonprofit under section 501(c) of the United States internal revenue code and that solely provides graduate and postgraduate education in the health sciences. For the purposes of this paragraph, "health sciences" includes medicine, nursing, physician's assistant studies, pharmacy, physical therapy, occupational therapy, biomedical sciences, podiatry, clinical psychology, cardiovascular science, nurse anesthesia, dentistry, optometry and veterinary medicine.
12. 13. "Qualifying hospital" means any of the following:
(a) A licensed hospital which that is organized and operated exclusively for charitable purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual.
(b) A licensed nursing care institution or a licensed residential care institution or a residential care facility operated in conjunction with a licensed nursing care institution or a licensed kidney dialysis center, which that provides medical services, nursing services or health related services and that is not used or held for profit.
(c) A hospital, nursing care institution or residential care institution which that is operated by the federal government, this state or a political subdivision of this state.
(d) A facility that is under construction and that on completion will be a facility under subdivision (a), (b) or (c) of this paragraph.
13. 14. "Retailer" includes every person engaged in the business classified under the retail classification pursuant to section 42‑5061 and, when in the opinion of the department it is necessary for the efficient administration of this article, includes dealers, distributors, supervisors, employers and salesmen, representatives, peddlers or canvassers as the agents of the dealers, distributors, supervisors or employers under whom they operate or from whom they obtain the tangible personal property sold by them, whether in making sales on their own behalf or on behalf of the dealers, distributors, supervisors or employers.
14. 15. "Sale" means any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatever, including consignment transactions and auctions, of tangible personal property or other activities taxable under this chapter, for a consideration, and includes:
(a) Any transaction by which the possession of property is transferred but the seller retains the title as security for the payment of the price.
(b) Fabricating tangible personal property for consumers who furnish either directly or indirectly the materials used in the fabrication work.
(c) Furnishing, preparing or serving for a consideration any tangible personal property consumed on the premises of the person furnishing, preparing or serving the tangible personal property.
15. 16. "Solar daylighting" means a device that is specifically designed to capture and redirect the visible portion of the solar beam, while controlling the infrared portion, for use in illuminating interior building spaces in lieu of artificial lighting.
16. 17. "Solar energy device" means a system or series of mechanisms that are designed primarily to provide heating, to provide cooling, to produce electrical power, to produce mechanical power, to provide solar daylighting or to provide any combination of the foregoing by means of collecting and transferring solar generated energy into such uses either by active or passive means, including wind generator systems that produce electricity. Solar energy systems may also have the capability of storing solar energy for future use. Passive systems shall clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window.
17. 18. "Tangible personal property" means personal property which that may be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses.
18. 19. "Tax year" or "taxable year" means either the calendar year or the taxpayer's fiscal year, if permission is obtained from the department to use a fiscal year as the tax period instead of the calendar year.
19. 20. "Taxpayer" means any person who that is liable for any tax which is imposed by this article.
20. 21. "Wholesaler" or "jobber" means any person who that sells tangible personal property for resale and not for consumption by the purchaser.
Sec. 4. Section 42-5005, Arizona Revised Statutes, is amended to read:
42-5005. Transaction privilege tax and municipal privilege tax licenses; fees; renewal; revocation; violation; classification
A. Every person who receives gross proceeds of sales or gross income on which a transaction privilege tax is imposed by this article and who desires to engage or continue in business shall apply to the department for an annual transaction privilege tax license accompanied by a fee of twelve dollars $12. A person shall not engage or continue in business until the person has obtained a transaction privilege tax license.
B. A person desiring to engage or continue in business within a city or town that imposes a municipal privilege tax shall apply to the department of revenue for an annual municipal privilege tax license accompanied by a fee of up to fifty dollars $50, as established by ordinance of the city or town. The person shall submit the fee with each new license application. The person may not engage or continue in business until the person has obtained a municipal privilege tax license. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
C. A transaction privilege tax license is valid only for the calendar year in which it is issued, but it may be renewed for the following calendar year. There is no fee for the renewal of the transaction privilege tax license. The transaction privilege tax license must be renewed at the same time and in the manner as the municipal privilege tax license renewal.
D. A municipal privilege tax license is valid only for the calendar year in which it is issued, but it may be renewed for the following calendar year by the payment of a license renewal fee of up to fifty dollars $50. The renewal fee is due and payable on January 1 and is considered delinquent if not received on or before the last business day of January. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
E. A licensee that remains in business after the municipal privilege tax license has expired is subject to the payment of the license renewal fee and the civil penalty prescribed in section 42‑1125, subsection R.
F. If the applicant is not in arrears in payment of any tax imposed by this article, the department shall issue a license authorizing the applicant to engage and continue in business on the condition that the applicant complies with this article. The license number shall be continuous.
G. The transaction privilege tax license and the municipal privilege tax license are not transferable on a complete change of ownership or change of location of the business. For the purposes of this subsection:
1. "Location" means the business address appearing in the application for the license and on the transaction privilege tax or municipal privilege tax license.
2. "Ownership" means any right, title or interest in the business.
3. "Transferable" means the ability to convey or change the right or privilege to engage or continue in business by virtue of the issuance of the transaction privilege tax or municipal privilege tax license.
H. When the ownership or location of a business on which a transaction privilege tax or municipal privilege tax is imposed has been changed within the meaning of subsection G of this section, the licensee shall surrender the license to the department. The license shall be reissued to the new owners or for the new location on application by the taxpayer and payment of the twelve‑dollar $12 fee for a transaction privilege tax license and a fee of up to fifty dollars $50 per jurisdiction for a municipal privilege tax license. The department must collect, hold, pay and manage the fees in trust for the city or town and may not use the monies for any other purposes.
I. A person who is engaged in or conducting a business in two or more locations or under two or more business names shall procure a transaction privilege tax license for each location or business name regardless of whether all locations or business names are reported on a consolidated return under a single transaction privilege tax license number. This requirement shall not be construed as conflicting with section 42‑5020.
J. A person who is engaged in or conducting a business in two or more locations or under two or more business names shall procure a municipal privilege tax license for each location or business name regardless of whether all locations or business names are reported on a consolidated return.
K. A person who is engaged in or conducting business at two or more locations or under two or more business names and who files a consolidated return under a single transaction privilege tax license number as provided by section 42‑5020 is required to pay only a single municipal privilege tax license renewal fee for each local jurisdiction pursuant to subsection D of this section. A person who is engaged in or conducting business at two or more locations or under two or more business names and who does not file a consolidated return under a single license number is required to pay a license renewal fee for each location or license in a local jurisdiction.
L. For the purposes of this chapter and chapter 6 of this title:
1. Through December 31, 2018, an online lodging marketplace, as defined in section 42‑5076, may register with the department for a license for the payment of taxes levied by this state and one or more counties, cities, towns or special taxing districts, at the election of the online lodging marketplace, for taxes due from an online lodging operator on any online lodging transaction facilitated by the online lodging marketplace, subject to sections 42‑5076 and 42‑6009.
2. Beginning from and after December 31, 2018, an online lodging marketplace, as defined in section 42‑5076, shall register with the department for a license for the payment of taxes levied by this state and one or more counties, cities, towns or special taxing districts for taxes due from an online lodging operator on any online lodging transaction facilitated by the online lodging marketplace, subject to sections 42-5076 and 42-6009.
M. For the purposes of this chapter and chapter 6 of this title, a person who is licensed pursuant to title 32, chapter 20 and who files an electronic consolidated tax return for individual real properties under management on behalf of the property owners may be licensed with the department for the payment of taxes levied by this state and by any county, city or town with respect to those properties. There is no fee for a license issued pursuant to this subsection.
N. For the purposes of this chapter, a peer‑to‑peer car sharing program shall register with the department for a license for the payment of taxes levied by this state and one or more counties, cities, towns or special taxing districts for the taxes due from a shared vehicle owner for any vehicle sharing transaction facilitated by the peer‑to‑peer car sharing program. There is no fee for a license issued pursuant to this subsection. For the purposes of this subsection, "peer‑to‑peer car sharing program" and "shared vehicle owner" have the same meanings prescribed in section 28‑9601.
N. O. If a person violates this article or any rule adopted under this article, the department upon hearing may revoke any transaction privilege tax or municipal privilege tax license issued to the person. The department shall provide ten days' written notice of the hearing, stating the time and place and requiring the person to appear and show cause why the license or licenses should not be revoked. The department shall provide written notice to the person of the revocation of the license. The notices may be served personally or by mail pursuant to section 42‑5037. After revocation, the department shall not issue a new license to the person unless the person presents evidence satisfactory to the department that the person will comply with this article and with the rules adopted under this article. The department may prescribe the terms under which a revoked license may be reissued.
O. P. The department may revoke any transaction privilege tax or municipal privilege tax license issued to any person who fails for thirteen consecutive months to make and file a return required by this article on or before the due date or the due date as extended by the department unless the failure is due to a reasonable cause and not due to wilful neglect.
P. Q. A person who violates any provision of this section is guilty of a class 3 misdemeanor.
Sec. 5. Section 42-5009, Arizona Revised Statutes, is amended to read:
42-5009. Certificates establishing deductions; liability for making false certificate
A. A person who conducts any business classified under article 2 of this chapter may establish entitlement to the allowable deductions from the tax base of that business by both:
1. Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the tax base.
2. Obtaining a certificate executed by the purchaser indicating the name and address of the purchaser, the precise nature of the business of the purchaser, the purpose for which the purchase was made, the necessary facts to establish the appropriate deduction and the tax license number of the purchaser to the extent the deduction depends on the purchaser conducting business classified under article 2 of this chapter and a certification that the person executing the certificate is authorized to do so on behalf of the purchaser. The certificate may be disregarded if the seller has reason to believe that the information contained in the certificate is not accurate or complete.
B. A person who does not comply with subsection A of this section may establish entitlement to the deduction by presenting facts necessary to support the entitlement, but the burden of proof is on that person.
C. The department may prescribe a form for the certificate described in subsection A of this section. Under such rules as it may prescribe, the department may also describe transactions with respect to which a person is not entitled to rely solely on the information contained in the certificate provided for in subsection A of this section but must instead obtain such additional information as required by the rules in order to be entitled to the deduction.
D. If a seller is entitled to a deduction by complying with subsection A of this section, the department may require the purchaser that caused the execution of the certificate to establish the accuracy and completeness of the information required to be contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.
E. If a seller is entitled to a deduction by complying with subsection B of this section, the department may require the purchaser to establish the accuracy and completeness of the information provided to the seller that entitled the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection B of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.
F. The department may prescribe a form for a certificate used to establish entitlement to the deductions described in section 42‑5061, subsection A, paragraph 46 and section 42‑5063, subsection B, paragraph 3. Under rules the department may prescribe, the department may also require additional information for the seller to be entitled to the deduction. If a seller is entitled to the deductions described in section 42‑5061, subsection A, paragraph 46 and section 42‑5063, subsection B, paragraph 3, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029.
G. If a seller claims a deduction under section 42‑5061, subsection A, paragraph 25 and establishes entitlement to the deduction with an exemption letter that the purchaser received from the department and the exemption letter was based on a contingent event, the department may require the purchaser that received the exemption letter to establish the satisfaction of the contingent event within a reasonable time. If the purchaser cannot establish the satisfaction of the event, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not been furnished the exemption letter. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42‑5029. For the purposes of this subsection, "reasonable time" means a time limitation that the department determines and that does not exceed the time limitations pursuant to section 42‑1104.
H. The department shall prescribe forms for certificates used to establish the satisfaction of the criteria necessary to qualify the sale of a motor vehicle for the deductions described in section 42‑5061, subsection A, paragraph 14, paragraph 28, subdivision (a) and paragraph 44 and subsection U. Except as provided in subsection J of this section, to establish entitlement to these deductions, a motor vehicle dealer shall retain:
1. A valid certificate as prescribed by this subsection completed by the purchaser and obtained prior to before the issuance of the nonresident registration permit authorized by section 28‑2154.
2. A copy of the nonresident registration permit authorized by section 28‑2154.
3. A legible copy of a current valid driver license issued to the purchaser by another state or foreign country that indicates an address outside of this state. For the sale of a motor vehicle to a nonresident entity, the entity's representative must have a current valid driver license issued by the same jurisdiction as that in which the entity is located.
4. For the purposes of the deduction provided by section 42‑5061, subsection A, paragraph 14, a certificate documenting the delivery of the motor vehicle to an out‑of‑state location.
I. Notwithstanding subsection A, paragraph 2 of this section, if a motor vehicle dealer has established entitlement to a deduction by complying with subsection H of this section, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that entitled the motor vehicle dealer to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the motor vehicle dealer would have been required to pay under this article and under articles IV and V of the model city tax code as defined in section 42‑6051. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and any tax imposed under article VI of the model city tax code as defined in section 42‑6051. The amount shall be treated as tax revenues collected from the motor vehicle dealer in order to designate the distribution base for purposes of section 42‑5029.
J. To establish entitlement to the deduction described in section 42‑5061, subsection A, paragraph 44, a public consignment auction dealer as defined in section 28‑4301 shall submit the valid certificate prescribed by subsection H of this section to the department and retain a copy for its records.
K. Notwithstanding any other law, compliance with subsection H of this section by a motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in section 42‑6004, subsection A, paragraph 4.
L. The department shall prescribe a form for a certificate to be used by a person that is not subject to tax under section 42‑5075 when the person is engaged by a contractor that is subject to tax under section 42‑5075 for a project that is taxable under section 42‑5075. The certificate permits the person purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement to provide documentation to a retailer that the sale of tangible personal property qualifies for the deduction under section 42‑5061, subsection A, paragraph 27, subdivision (b). A prime contractor shall obtain the certificate from the department and shall provide a copy to any such person working on the project. The prime contractor shall obtain a new certificate for each project to which this subsection applies. For the purposes of this subsection, the following apply:
1. The person that is not subject to tax under section 42‑5075 may use the certificate issued pursuant to this subsection only with respect to tangible personal property that will be incorporated into a project for which the gross receipts are subject to tax under section 42‑5075.
2. The department shall issue the certificate to the prime contractor on receiving sufficient documentation to establish that the prime contractor meets the requirements of this subsection.
3. If any person uses the certificate provided under this subsection to purchase tangible personal property to be used in a project that is not subject to tax under section 42‑5075, the person is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this section exempts the person from liability for any tax imposed under article 4 of this chapter. The amount shall be sourced under section 42‑5040, subsection A, paragraph 2.
M. Notwithstanding any other law, compliance with subsection L of this section by a person that is not subject to tax under section 42‑5075 entitles the person to the exemption allowed by section 465, subsection (k) of the model city tax code when purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement.
N. The requirements of subsections A and B of this section do not apply to owners, proprietors or tenants of agricultural lands or farms who sell livestock or poultry feed that is grown or raised on their lands to any of the following:
1. Persons who feed their own livestock or poultry.
2. Persons who are engaged in the business of producing livestock or poultry commercially.
3. Persons who are engaged in the business of feeding livestock or poultry commercially or who board livestock noncommercially.
O. A vendor who has reason to believe that a certificate prescribed by this section is not accurate or complete will not be relieved of the burden of proving entitlement to the exemption. A vendor that accepts a certificate in good faith will be relieved of the burden of proof and the purchaser may be required to establish the accuracy of the claimed exemption. If the purchaser cannot establish the accuracy and completeness of the information provided in the certificate, the purchaser is liable for an amount equal to the transaction privilege tax, penalty and interest that the vendor would have been required to pay if the vendor had not accepted the certificate.
P. Notwithstanding any other law, an online lodging operator, as defined in section 42‑5076, shall be entitled to an exclusion from any applicable taxes for any online lodging transaction, as defined in section 42‑5076, facilitated by an online lodging marketplace, as defined in section 42‑5076, for which the online lodging operator has obtained from the online lodging marketplace written notice that the online lodging marketplace is registered with the department to collect applicable taxes for all online lodging transactions facilitated by the online lodging marketplace, and transaction history documenting tax collected by the online lodging marketplace, pursuant to section 42‑5005, subsection L.
Q. The department shall prescribe the form of a certificate to be used by a person purchasing an aircraft to document eligibility for a deduction pursuant to section 42‑5061, subsection B, paragraph 7, subdivision (a), item (v) or an exemption pursuant to section 42‑5159, subsection B, paragraph 7, subdivision (a), item (v), relating to aircraft. The person must provide this certificate and documentation confirming that the operational control of the aircraft has been transferred or will be transferred immediately after the purchase to one or more persons described in section 42‑5061, subsection B, paragraph 7, subdivision (a), item (i), (ii), (iii) or (iv) or section 42‑5159, subsection B, paragraph 7, subdivision (a), item (i), (ii), (iii) or (iv). Operational control of the aircraft must be transferred for at least fifty percent of the aircraft's flight hours. If such operational control is not transferred for at least fifty percent of the aircraft's flight hours during the recapture period, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus penalty and interest. The recapture period begins on the date that operational control of the aircraft is first transferred and ends on the later of the date the aircraft is fully depreciated for federal income tax purposes or five years after operational control was first transferred. For the purposes of this subsection, operational control of the aircraft must be within the meaning of federal aviation administration operations specification A008, or its successor, except that:
1. If it is determined that operational control has been transferred for less than fifty percent but more than forty percent of the aircraft's flight hours, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus interest.
2. If the aircraft is sold during the recapture period, the seller is not liable for the amount determined pursuant to this subsection unless the operational control of the aircraft had not been transferred for at least fifty percent of the aircraft's flight hours at the time of the sale.
R. Notwithstanding any other law, a shared vehicle owner is entitled to an exclusion from any applicable taxes for any vehicle sharing transaction that is facilitated by a peer‑to‑peer car sharing program and for which the sharing owner has obtained from the peer‑to‑peer car sharing program both of the following:
1. Written notice that the peer‑to‑peer car sharing program is licensed with the department to collect applicable taxes for all vehicle sharing transactions that are facilitated by the peer‑to‑peer car sharing program.
2. Transaction history documenting tax collected by the peer‑to‑peer car sharing program pursuant to section 42-5005, subsection N.
S. For the purposes of subsection R of this section, "peer‑to‑peer car sharing program" and "shared vehicle owner" have the same meanings prescribed in section 28-9601.
Sec. 6. Section 42-5014, Arizona Revised Statutes, is amended to read:
42-5014. Return and payment of tax; estimated tax; extensions; abatements
A. Except as provided in subsection B, C, D, E or F of this section, the taxes levied under this article:
1. Are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of the month next succeeding the month in which the tax accrues.
2. Are delinquent as follows:
(a) For taxpayers that are required or elect to file and pay electronically in any month, if not received by the department on or before the last business day of the month.
(b) For all other taxpayers, if not received by the department on or before the business day preceding the last business day of the month.
B. The department, for any taxpayer whose estimated annual liability for taxes imposed or administered by this article or chapter 6 of this title is between two thousand dollars $2,000 and eight thousand dollars $8,000, shall authorize such taxpayer to pay such taxes on a quarterly basis. The department, for any taxpayer whose estimated annual liability for taxes imposed by this article is less than two thousand dollars $2,000, shall authorize such taxpayer to pay such taxes on an annual basis. For the purposes of this subsection, the taxes due under this article:
1. For taxpayers that are authorized to pay on a quarterly basis, are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of the month next succeeding the quarter in which the tax accrues.
2. For taxpayers that are authorized to pay on an annual basis, are due and payable monthly in the form required by section 42‑5018 for the amount of the tax, to the department, on or before the twentieth day of January next succeeding the year in which the tax accrues.
3. Are delinquent as follows:
(a) For taxpayers that are required or elect to file and pay electronically in any quarter, if not received by the department on or before the last business day of the month.
(b) For all other taxpayers that are required to file and pay quarterly, if not received by the department on or before the business day preceding the last business day of the month.
(c) For taxpayers that are required or elect to file and pay electronically on an annual basis, if not received by the department on or before the last business day of January.
(d) For all other taxpayers that are required to file and pay annually, if not received by the department on or before the business day preceding the last business day of January.
C. The department may require a taxpayer whose business is of a transient character to file the return and remit the taxes imposed by this article on a daily, a weekly or a transaction by transaction basis, and those returns and payments are due and payable on the date fixed by the department without a grace period otherwise allowed by this section. For the purposes of this subsection, "business of a transient character" means sales activity by a taxpayer not regularly engaged in selling within the state conducted from vehicles, portable stands, rented spaces, structures or booths, or concessions at fairs, carnivals, circuses, festivals or similar activities for not more than thirty consecutive days.
D. If the business entity under which a taxpayer reports and pays income tax under title 43 has an annual total tax liability under this article, article 6 of this chapter and chapter 6, article 3 of this title of one million dollars $1,000,000 or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this article, article 6 of this chapter or chapter 6, article 3 of this title are collected, or if the taxpayer can reasonably anticipate such liability in the current year, the taxpayer shall report on a form prescribed by the department and pay an estimated tax payment each June. Any other taxpayer may voluntarily elect to pay the estimated tax payment pursuant to this subsection. The payment shall be made on or before June 20 and is delinquent if not received by the department on or before the business day preceding the last business day of June for those taxpayers electing to file by mail, or delinquent if not received by the department on the business day preceding the last business day of June for those taxpayers electing to file in person. The estimated tax paid shall be credited against the taxpayer's tax liability under this article, article 6 of this chapter and chapter 6, article 3 of this title for the month of June for the current calendar year. The estimated tax payment shall equal either:
1. One‑half of the actual tax liability under this article plus one‑half of any tax liability under article 6 of this chapter and chapter 6, article 3 of this title for May of the current calendar year.
2. The actual tax liability under this article plus any tax liability under article 6 of this chapter and chapter 6, article 3 of this title for the first fifteen days of June of the current calendar year.
E. An online lodging marketplace, as defined in section 42‑5076, that is registered with the department pursuant to section 42‑5005, subsection L:
1. Shall remit to the department the applicable taxes payable pursuant to section 42‑5076 and chapter 6 of this title with respect to each online lodging transaction, as defined in section 42‑5076, facilitated by the online lodging marketplace.
2. Shall report the taxes monthly and remit the aggregate total amounts for each of the respective taxing jurisdictions.
3. Shall not be required to list or otherwise identify any individual online lodging operator, as defined in section 42‑5076, on any return or any attachment to a return.
F. A person who is licensed pursuant to title 32, chapter 20 and who is licensed with the department pursuant to section 42‑5005, subsection M shall:
1. File a consolidated return monthly with respect to all managed properties for which the licensee files an electronic consolidated tax return pursuant to section 42‑6013.
2. Remit to the department the aggregate total amount of the applicable taxes payable pursuant to this chapter and chapter 6 of this title for all of the respective taxing jurisdictions with respect to the managed properties.
G. A peer‑to‑peer car sharing program, as defined in section 28‑9601, that is licensed with the department pursuant to section 42‑5005, subsection N:
1. Shall electronically remit to the department the applicable surcharges and taxes pursuant to sections 5‑839, 42-5071 and 48‑4234.
2. Shall electronically report the taxes monthly and remit the aggregate total amounts for each of the respective taxing jurisdictions.
3. Is not required to list or otherwise identify any individual shared vehicle owner, as defined in section 28‑9601, on any return or any attachment to a return. The peer‑to‑peer car sharing program shall retain surcharge and tax information for each peer‑to‑peer car sharing transaction and shall provide the information to the department at the department's request.
G. H. The taxpayer shall prepare a return showing the amount of the tax for which the taxpayer is liable for the preceding month, and hall mail or deliver the return to the department in the same manner and time as prescribed for the payment of taxes in subsection A of this section. If the taxpayer fails to file the return in the manner and time as prescribed for the payment of taxes in subsection A of this section, the amount of the tax required to be shown on the return is subject to the penalty imposed pursuant to section 42‑1125, subsection X, without any reduction for taxes paid on or before the due date of the return. The return shall be verified by the oath of the taxpayer or an authorized agent or as prescribed by the department pursuant to section 42‑1105, subsection B.
H. I. Any person who is taxable under this article and who makes cash and credit sales shall report such cash and credit sales separately and on making application may obtain from the department an extension of time for payment of taxes due on the credit sales. The extension shall be granted by the department under such rules as the department prescribes. When the extension is granted, the taxpayer shall thereafter include in each monthly report all collections made on such credit sales during the month next preceding and shall pay the taxes due at the time of filing such report.
I. J. The returns required under this article shall be made on forms prescribed by the department and shall capture data with sufficient specificity to meet the needs of all taxing jurisdictions.
J. K. Any person who is engaged in or conducting business in two or more locations or under two or more business names shall file the return required under this article using an electronic filing program established by the department.
K. L. For taxable periods beginning from and after December 31, 2017, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of twenty thousand dollars $20,000 or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
L. M. For taxable periods beginning from and after December 31, 2018, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of ten thousand dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
M. N. For taxable periods beginning from and after December 31, 2019, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of five thousand dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
N. O. For taxable periods beginning from and after December 31, 2020, any taxpayer with an annual total tax liability under this chapter and chapter 6 of this title of five hundred dollars or more, based on the actual tax liability in the preceding calendar year, regardless of the number of offices at which the taxes imposed by this chapter or chapter 6 of this title are collected, or a taxpayer that can reasonably anticipate that liability in the current year, shall file the return required under this article using an electronic filing program established by the department.
O. P. Any taxpayer that is required to report and pay using an electronic filing program established by the department may apply to the director, on a form prescribed by the department, for an annual waiver from the electronic filing requirement. The director may grant a waiver, which may be renewed, if any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by the director.
P. Q. A waiver is not required if the return cannot be electronically filed for reasons beyond the taxpayer's control, including situations in which the taxpayer was instructed by either the internal revenue service or the department of revenue to file by paper.
Q. R. The department, for good cause, may extend the time for making any return required by this article and may grant such reasonable additional time within which to make the return as it deems proper, but the time for filing the return shall not be extended beyond the first day of the third month next succeeding the regular due date of the return.
R. S. The department, with the approval of the attorney general, may abate small tax balances if the administration costs exceed the amount of tax due.
S. T. For the purposes of subsection D of this section, "taxpayer" means the business entity under which the business reports and pays state income taxes regardless of the number of offices at which the taxes imposed by this article, article 6 of this chapter or chapter 6, article 3 of this title are collected.
Sec. 7. Section 42-5040, Arizona Revised Statutes, is amended to read:
42-5040. Sourcing of certain transactions; definitions
A. Except as provided in section 42‑5075, retail sales of tangible personal property shall be sourced as follows:
1. To the seller's business location if the seller receives the order at a business location in this state.
2. Except as provided in section 42‑5008.01, to the purchaser's location in this state if the seller receives the order at a business location outside this state.
B. Peer‑to‑peer car sharing transactions shall be sourced as follows:
1. To the permanent street address of the registered owner of a motor vehicle that is used in a peer‑to‑peer car sharing program if the motor vehicle is registered in this state.
2. To the street address in this state where the shared vehicle owner resides while in this state if the motor vehicle is registered in another state or country.
B. C. For the purposes of Subsection A of this section, an order is received when all of the information necessary to accept the order has been received by or on behalf of the seller, regardless of where the order is accepted or approved. The place of business or residence of the purchaser does not determine where the order is received.
C. D. The gross receipts from leasing or renting tangible personal property shall be sourced as follows:
1. To the lessor's business location if the lessor has a business location in this state.
2. To the lessee's address if the lessor does not have a business location in this state. The gross receipts are taxable when the property is shipped, delivered or otherwise brought into this state for use in this state.
D. E. For the purposes of this section:
1. "Lessee's address" means the residential address of an individual lessee and the primary business address of any other lessee.
2. "Lessor's business location" means the business address that appears on the lessor's transaction privilege tax license.
3. "Peer‑to‑peer car sharing program" has the same meaning prescribed in section 28‑9601.
4. "shared vehicle owner" has the same meaning prescribed in section 28‑9601.
Sec. 8. Section 42-5071, Arizona Revised Statutes, is amended to read:
42-5071. Personal property rental classification; definitions
A. The personal property rental classification is comprised of the business of leasing or renting tangible personal property for a consideration. The tax does not apply to:
1. Leasing or renting films, tapes or slides used by theaters or movies, which are engaged in business under the amusement classification, or used by television stations or radio stations.
2. Activities engaged in by the Arizona exposition and state fair board or county fair commissions in connection with events sponsored by such entities.
3. Leasing or renting tangible personal property by a parent corporation to a subsidiary corporation or by a subsidiary corporation to another subsidiary of the same parent corporation if taxes were paid under this chapter on the gross proceeds or gross income accruing from the initial sale of the tangible personal property. For the purposes of this paragraph, "subsidiary" means a corporation of which at least eighty percent of the voting shares are owned by the parent corporation.
4. Operating coin‑operated washing, drying and dry cleaning machines or coin‑operated car washing machines at establishments for the use of such machines.
5. Leasing or renting tangible personal property for incorporation into or comprising any part of a qualified environmental technology facility as described in section 41‑1514.02. This paragraph shall apply for ten full consecutive calendar or fiscal years following the initial lease or rental by each qualified environmental technology manufacturer, producer or processor.
6. Leasing or renting aircraft, flight simulators or similar training equipment to students or staff by nonprofit, accredited educational institutions that offer associate or baccalaureate degrees in aviation or aerospace related fields.
7. Leasing or renting photographs, transparencies or other creative works used by this state on internet websites, in magazines or in other publications that encourage tourism.
8. Leasing or renting certified ignition interlock devices installed pursuant to the requirements prescribed by section 28‑1461. For the purposes of this paragraph, "certified ignition interlock device" has the same meaning prescribed in section 28‑1301.
9. The leasing or renting of space to make attachments to utility poles, as follows:
(a) By a person that is engaged in business under section 42‑5063 or 42‑5064 or that is a cable operator.
(b) To a person that is engaged in business under section 42‑5063 or 42‑5064 or that is a cable operator.
10. Leasing or renting billboards that are designed, intended or used to advertise or inform and that are visible from any street, road or other highway.
B. The tax base for the personal property rental classification is the gross proceeds of sales or gross income derived from the business, but the gross proceeds of sales or gross income derived from the following shall be deducted from the tax base:
1. Reimbursements by the lessee to the lessor of a motor vehicle for payments by the lessor of the applicable fees and taxes imposed by sections 28‑2003, 28‑2352, 28‑2402, 28‑2481 and 28‑5801, title 28, chapter 15, article 2 and article IX, section 11, Constitution of Arizona, to the extent such amounts are separately identified as such fees and taxes and are billed to the lessee.
2. Leases or rentals of tangible personal property that, if it had been purchased instead of leased or rented by the lessee, would have been exempt under:
(a) Section 42‑5061, subsection A, paragraph 8, 9, 12, 13, 25, 29, 49 or 53.
(b) Section 42‑5061, subsection B, except that a lease or rental of new machinery or equipment is not exempt pursuant to section 42‑5061, subsection B, paragraph 13 if the lease is for less than two years.
(c) Section 42‑5061, subsection I, paragraph 1.
(d) Section 42‑5061, subsection M.
3. Motor vehicle fuel and use fuel that are subject to a tax imposed under title 28, chapter 16, article 1, sales of use fuel to a holder of a valid single trip use fuel tax permit issued under section 28‑5739 and sales of aviation fuel that are subject to the tax imposed under section 28‑8344.
4. Leasing or renting a motor vehicle subject to and on which the fee has been paid under title 28, chapter 16, article 4.
5. Amounts received by a motor vehicle dealer for the first month of a lease payment if the lease and the lease payment for the first month of the lease are transferred to a third‑party leasing company.
C. Sales of tangible personal property to be leased or rented to a person engaged in a business classified under the personal property rental classification are deemed to be resale sales.
D. In computing the tax base, the gross proceeds of sales or gross income from the lease or rental of a motor vehicle does not include any amount attributable to the car rental surcharge under section 5‑839, 28‑5810 or 48‑4234.
E. Until December 31, 1988, leasing or renting animals for recreational purposes is exempt from the tax imposed by this section. Beginning January 1, 1989, the gross proceeds or gross income from leasing or renting animals for recreational purposes is subject to taxation under this section. Tax liabilities, penalties and interest paid for taxable periods before January 1, 1989 shall not be refunded unless the taxpayer requesting the refund provides proof satisfactory to the department that the monies paid as taxes will be returned to the customer.
F. The tax base of the personal property rental classification does not include the gross proceeds or gross income received by a shared vehicle owner from any vehicle sharing transaction for which the shared vehicle owner has received documentation from a licensed peer‑to‑peer car sharing program pursuant to section 42‑5005, subsection N that the peer‑to‑peer car sharing program has remitted or will remit the applicable tax to the department pursuant to section 42‑5014, subsection G.
F. G. For the purposes of this section:
1. "Cable operator" has the same meaning prescribed by section 9‑505.
2. "Peer-to-peer car sharing program" has the same meaning prescribed in section 28‑9601.
3. "Shared vehicle owner" has the same meaning prescribed in section 28-9601.
2. 4. "Utility pole" means any wooden, metal or other pole used for utility purposes and the pole's appurtenances that are attached or authorized for attachment by the person controlling the pole.
Sec. 9. Title 42, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 42-6017, to read:
42-6017. Rentals of tangible personal property; definitions
A. A broker as defined in the model city tax code who is engaging in or continuing business activity on behalf of any other person engaged in business activity taxable under the model city tax code and who is a peer‑to-peer car sharing program, in conducting that business, shall be licensed pursuant to section 42-5005, subsection N and is subject to:
1. Section 42-5014, subsection G, relating to tax returns.
2. Tax at the current rates imposed by a city, town or other taxing jurisdiction under the model city tax code.
B. Any tax remitted pursuant to the terms of this section shall be administered, collected and enforced by the department and distributed to the city, town or other taxing jurisdiction in a uniform manner.
C. A tax may not be collected by a city, town or other taxing jurisdiction from a lessor of tangible personal property for which the lessor has received written notice or documentation from a peer‑to‑peer car sharing program that it has remitted or will remit the applicable tax with respect to those transactions to the department pursuant to section 42‑5014, subsection G.
D. For the purposes of this section, "peer-to-peer car sharing program" and "shared vehicle owner" have the same meanings prescribed in section 28-9601.
Sec. 10. Effective date
This act is effective from and after December 31, 2019.
