Bill Amendment: AZ HB2535 | 2013 | Fifty-first Legislature 1st Regular
Bill Title: Independent functional utility
Status: 2013-04-29 - Governor Signed [HB2535 Detail]
Download: Arizona-2013-HB2535-SENATE_ADOPTED_AMENDMENT_Yarbrough_flr_amend_ref_FIN_adopted.html
Bill
Number: H.B. 2535
Yarbrough Floor Amendment
Amendment drafted by: Bill Ritz
FLOOR AMENDMENT EXPLANATION
The Yarbrough Floor Amendment:
- Specifies that machinery and equipment that is exempt at retail and that has "independent functional utility" will not be considered taxable under prime contracting.
- Clarifies the "declaration of intent" to specify that the benefit of the machinery and equipment exemption under the retail class should not be diminished through the activity of contracting.
- Adds a "saving clause."
- Makes technical changes.
Fifty-first Legislature Yarbrough
First Regular Session H.B. 2535
YARBROUGH FLOOR AMENDMENT
SENATE AMENDMENTS TO H.B. 2535
(Reference to FIN amendment)
Page 1, before line 1, insert:
Page 2, line 33, strike "entered into"
Line 34, after “is” insert "EITHER"
Line 35, strike "pursuant to" insert "under"
Line 36, strike the first comma; strike "pursuant to" insert "under"
Line 37, after "B" strike remainder of the line
Strike lines 38 through 45
Page 3, strike lines 1 through 5, insert "AND THAT HAS INDEPENDENT FUNCTIONAL UTILITY, PURSUANT TO THE FOLLOWING PROVISIONS:
(a) THE DEDUCTION PROVIDED IN THIS PARAGRAPH INCLUDES THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM ALL OF THE FOLLOWING:
(i) ANY ACTIVITY PERFORMED ON MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY.
(ii) ANY ACTIVITY PERFORMED ON ANY TANGIBLE PERSONAL PROPERTY RELATING TO MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY IN FURTHERANCE OF ANY OF THE PURPOSES PROVIDED FOR UNDER SUBDIVISION (d) OF THIS PARAGRAPH.
(iii) ANY ACTIVITY THAT IS RELATED TO THE ACTIVITIES DESCRIBED IN SUBDIVISION (a), ITEMS (i) AND (ii) OF THIS PARAGRAPH, INCLUDING, BUT NOT LIMITED TO, INSPECTING THE INSTALLATION OF, OR TESTING, THE MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY.
(b) THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THE PORTION OF ANY CONTRACTING ACTIVITY THAT CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY THAT IS EITHER DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION UNDER SECTION 42-5061, SUBSECTION B OR EXEMPT FROM USE TAX UNDER SECTION 42-5159, SUBSECTION B.
(c) THE DEDUCTION PROVIDED IN THIS PARAGRAPH SHALL BE DETERMINED WITHOUT REGARD TO THE SIZE OR USEFUL LIFE OF THE MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY."
Reletter to conform
Page 3, line 6, after “(a)” insert “FOR THE PURPOSES OF THIS PARAGRAPH,"
Page 1, strike lines 10 through 27, insert:
Strike lines 23 through 30
Page 13, line 39, strike "ENTERED INTO"
Line 40, strike "THAT IS DEDUCTED"
Line 41, strike "FROM THE TAX BASE OF THE RETAIL CLASSIFICATION PURSUANT TO" insert "DESCRIBED IN"; strike the comma
Line 42, after "B" strike remainder of line
Strike lines 43, 44 and 45
Page 14, strike lines 1 through 14, insert: "AND THAT HAS INDEPENDENT FUNCTIONAL UTILITY, PURSUANT TO THE FOLLOWING PROVISIONS:
(a) THE DEDUCTION PROVIDED IN THIS PARAGRAPH INCLUDES THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM ALL OF THE FOLLOWING:
(i) ANY ACTIVITY PERFORMED ON MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY.
(ii) ANY ACTIVITY PERFORMED ON ANY TANGIBLE PERSONAL PROPERTY RELATING TO MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY WITH INDEPENDENT FUNCTIONAL UTILITY IN FURTHERANCE OF ANY OF THE PURPOSES PROVIDED FOR UNDER SUBDIVISION (d) OF THIS PARAGRAPH.
(iii) ANY ACTIVITY THAT IS RELATED TO THE ACTIVITIES DESCRIBED IN SUBDIVISION (a), ITEMS (i) AND (ii) OF THIS PARAGRAPH, INCLUDING, BUT NOT LIMITED TO, INSPECTING THE INSTALLATION OF, OR TESTING, THE MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY.
(b) THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THE PORTION OF ANY CONTRACTING ACTIVITY THAT CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY described in SECTION 42-5061, SUBSECTION B.
(c) tHE DEDUCTION PROVIDED IN THIS PARAGRAPH SHALL BE DETERMINED WITHOUT REGARD TO THE SIZE OR USEFUL LIFE OF THE MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY.
(d) for the purposes of this paragraph, "independent functional utility" means that the machinery, EQUIPMENT or other tangible personal property can independently perform its function without attachment to real property, other than attachment for any of the following purposes:
(i) assembling the machinery, equipment or other tangible personal property.
(ii) connecting items of machinery, equipment or other tangible personal property to each other.
(iii) connecting the machinery, equipment or other tangible personal property, whether as an individual item or as a system of items, to water, power, gas, communication or other services.
(iv) stabilizing or protecting the machinery, equipment or other tangible personal property during operation by bolting, burying or performing other dissimilar nonpermanent connections to either real property or real property improvements."
Page 2, strike lines 1 and 2, insert:
Page 15, strike lines 29 through 34, insert:
"It is the intent of the legislature in amending the provisions of section 42-5075, subsection B, paragraph 7 and section 42-6004, subsection A, paragraph 13, Arizona Revised Statutes, as specified in this act, that the benefit of the retail transaction privilege tax deductions provided under section 42-5061, subsection B, Arizona Revised Statutes, and the use tax exemptions under section 42-5159, subsection B, Arizona Revised Statutes, should not be diminished through the activity of contracting. To the extent that such intent was not achieved by Laws 1996, chapter 319, this act effectuates the intent and redresses or cures any resulting unintended consequences, beginning from and after June 30, 1997."
Line 4, strike "of" insert "or"
Between lines 4 and 5, insert:
Page 16, after line 7 insert:
"E. This section does not extend the statute of limitations for assessment or refund beyond that which is open under sections 42-1104 and 42-1106, Arizona Revised Statutes.
Sec. 5. Savings clause; prospective validity
If section 4 of this act, relating to retroactivity and refund, is finally adjudicated to be invalid by an appellate court, the retroactive application of section 3 of this act, relating to declaration of intent, is void, such that section 3 of this act will only be applied prospectively beginning from and after the effective date of this act."
Amend title to conform
