PHOENIX CITY AUDITOR ISSUE STATEMENTS

 

City of Phoenix

City Auditor Department

Privilege and Use Tax

Issue Statements

 

 

                                                                 Issue                       0.00

                                                                                                                                     Ruling

   Issue                                                                                                                          Number

   Not issued.  Ruling number skipped.                                                                              1155

   Not issued.  Ruling number skipped.                                                                              1156

   Not issued.  Ruling number skipped.                                                                              1157

   Not issued.  Ruling number skipped.                                                                              1158

   Not issued.  Ruling number skipped.                                                                              1159

   No issue.  Assessment withdrawn.                                                                                1203

   No issues.                                                                                                                   1223

 

                                                                 Issue                       1.00

 

   Upheld as authority to tax was in the code during                                                           0091

   Income from national advertising taxable by the                                                              0130

   City during period of audit and continually up to

   December 1, 1978.

   Income from national advertising was not taxable                                                            0130

   as of December 1, 1978 per Phoenix City

   Ordinance G-1897.

   Taxpayer's advertising revenues were found                                                                    0246

   Advertising over a public address system is                                                                    0443

   taxable, broadcasting personal messages over a

   public address system is a service and is

   Income received for maintenance and processing                                                            0745

    of real estate broker listings not taxable as

   advertising income since listings distributed to

   Gross income from mass mailing of printed                                                                    0902

   material taxable as advertising income.

 

                                                                 Issue                       1.50

 

   Charges between related corporations taxable                                                                0108

   transactions under Phoenix City Code Section

   14-2(a)(12).

   Taxpayer submitted no evidence of alleged                                                                     0622

   relationship between entities, and neither does

   Code exempt rental receipts between such

   Sale between related parties taxable even                                                                      0928

   though Taxpayer not released from

   indebtedness.

   Inter-company charge to an affiliate for a shared                                                              1213

   Sale of property by a corporation to its affiliate is                                                            1214

 

                                                                 Issue                       2.00

 

   Where no express agency relationship and                                                                    0449

   taxpayer has legal title to goods before

   purchaser takes delivery - no implied agency is

   City collection officers did not have authority,                                                                  0518

   actual or apparent to agree not to assess

   additional penalties properly assessed under the

   Taxpayer did not act as agent for horse owners                                                              0519

   because payment of winning purses is a

   business obligation of Taxpayer.

   Premiums collected by Taxpayer acting as                                                                    0533

   purchasing agent from customers for inclusion of

    coverage on Taxpayer's group policy are not

   Usually, principal not liable for agent's acts if                                                                  0803

   outside of scope of authority or if independent

   contractor.

   Taxpayer did not act as agent for horse owners                                                              0878

   because payment of purses is statutorily

   provided with no evidence of agency

 

                                                                 Issue                       3.00

 

   Based on state statute taxpayer directed to pay                                                             0405

   percentage of income to third party. City code

   not provide for deduction.

   Audio tapes used to generate amusement                                                                      0470

   Purse supplements and amount retained by                                                                   0519

   Sale of ticket to bettor is the taxable event fixing                                                             0519

   point in time amusement income is realized for

   tax purposes.

   Hot air balloons subject to the Federal Air                                                                      0894

   Transportation Excise Tax are exempt from City

   amusement tax.

 

                                                                 Issue                       4.00

 

   Sales of repossessed automobiles to nondealers                                                            0199

    at public auction constituted taxable sales under

    14-2(a)(8).

 

                                                                 Issue                       4.20

 

   Rents collected by bankrupt estate is gross                                                                   0901

   income of Taxpayer, whether or not actually

   received by Taxpayer.

 

                                                                 Issue                       4.50

 

   Commissions received by Brokers are not                                                                      0533

   taxable pursuant to Code Sec 14-12(f).

   Sales commission checks are not taxable gross                                                            0582

   An auctioneer is a broker for the seller, taxable                                                               0755

   to the extent that the principal is taxable.

   A property manager is subject to taxes for the                                                                0939

   rental of real property even if it would be casual if

    rented by owner.

   Property Mgr. is subject to tax upon the rental of                                                            0947

   real property even though such rental would be

   deemed "casual" if principal acted in his own

   Taxpayer is agent of a financial institution in the                                                             0950

   business of leasing and not liable for taxes

   relating to brokered auto leases.

                                                                 Issue                       5.00

 

   Allowing builders to report income at time of                                                                   0134

   transfer of title discriminates against commercial

   builders who report taxes on cash receipts basis.

   As normal bankruptcy procedures require the                                                                 0467

   business to go to cash basis accounting

   taxpayer's deduction was allowed.

   Gross income for cash basis reporting includes                                                              1248

                                                                 Issue                       6.00

 

   City properly taxed taxpayers gross circulation                                                               0130

   revenue measured by using retail sales price of

   the newspapers.

 

                                                                 Issue                       7.00

 

   Taxpayer found to be in taxable activity,                                                                         0176

   proceeds derived from coin-operated car wash

   machines subject to tax.

   Taxpayer who controls game room operations is                                                             0916

   considered lessee of game equipment, not

   licensor of real property.

                                                                 Issue                       8.00

 

   Sales of computer hardware were found not                                                                    0209

   exempt under Section 14-40(1)because taxpayer

    did not manufacture computer hardware.

 

                                                                 Issue                       9.00

 

   Software found to be intangible personal                                                                         0209

   property according to current court cases

   therefore not taxable under 14-2(a)(8) or

   Software subscription manuals.                                                                                     0338

   Licensed software delivered with software                                                                       0908

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0909

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0910

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0911

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0912

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0913

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0914

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Software acquired for the purpose of developing                                                              0984

   new applications software programs subject to

   tax.

                                                                 Issue                      10.00

 

   Rental income from computer time rentals                                                                      0209

   properly taxed under Section 14-2(a)(11),does

   not constitute a casual activity.

 

                                                                 Issue                      11.00

 

   Income from real property is renting or licensing-                                                             0405

   agreement determines whether lease or license-

   selling from non-fixed locations not rental.

                                                                 Issue                      12.00

 

   Where Taxpayer spends less than 15% of sales                                                             0111

   price to upgrade real property, he is held not to

   be acting as developer performing construction

   Gross receipts from the contracting business                                                                 0112

   ordinarily mean the gross amount of cash

   received.

   Taxable receipts of contractors on cash receipts                                                             0112

   basis is cash collected on obligations underlying

   sales transaction, includes principal and interest.

   Permanent is a valid, consistent criteria used to                                                             0138

   determine contracting versus a material supplier

   activity.

   Contracting activity was performed in the                                                                        0148

   Developers were not engaged in contracting                                                                   0169

   Taxpayer and the City agreed that installation                                                                 0240

   activity is not retail activity, but contracting

   activity.

   Taxpayer should report income from building the                                                             0252

   Repairs to the improvements or structures would                                                            0257

   Altering, adding to, or improving any building.                                                                 0361

 

                                                                 Issue                      12.00

 

   Exempt sales to hospital versus part of                                                                          0375

   Exempt sale to the city, schools with city.                                                                     0379

   Lump sum settlement for changes to original                                                                  0387

   construction agreement is contracting income.

   Attached awnings porches, etc. to mobile homes                                                           0398

   Where the Taxpayer has a fixed fee arrangement                                                            0439

    and contracts with subcontractors the Taxpayer

   is the prime contractor.

   Taxpayer failed to show that construction                                                                       0492

   receipts from tenant improvements "flowed

   through its books" and that contractors paid tax

   Furnishing and installing custom window                                                                        0547

   Laying cable adds to a project or development                                                                0549

   and therefore falls within contracting activity.

   Taxpayer didn't claim exemption to which it wasn't                                                          0574

    entitled, pursuant to Sec 14-17(c), subjecting it

   to tax liability of subcontractors on contract.

   Boring holes for cable TV is contracting where                                                                0587

   Taxpayer installs materials in them.

 

                                                                 Issue                      12.00

 

   Partner's contracting activity not attributed to                                                                  0602

   Gross proceeds from land not included in                                                                       0605

   contractor's taxable receipts because the Code

   contains no provision taxing them.

   Design and architectural work does not fit the                                                                 0617

   definition of construction contracting.

   One percent tax rate applies to construction                                                                   0647

   Revenue from sale of property, shown partly to                                                               0671

   be for service and non-contracting agreements,

   not taxable to owner-builder.

   Complete replacement of faucets and other                                                                    0676

   assemblies taxable as contracting, not retail

   sales plus exempt service labor.

   Installation of parts such as o-ring, toilet flappers,                                                           0676

    faucet stems, etc. qualify as consumable goods.

   Locating a broken sewer line, where no materials                                                            0676

    are transferred, is an exempt service.

   Leaseholds and personal property are not                                                                      0684

   includable in sale proceeds subject to

   contracting tax.

   The Taxpayer's sale and installation of load                                                                    0693

   controllers falls within the definition of

   contracting.

 

                                                                 Issue                      12.00

 

   Code neither prohibits the deduction of land                                                                    0714

   costs nor requires that proceeds from its sale be

   in gross receipts.

   Code neither prohibits the deduction of land                                                                    0715

   costs nor requires that proceeds from its sale be

   in gross receipts.

   Taxpayer should not receive a tax credit for taxes                                                           0723

    paid on the rental of truss equipment because

   truss equipment not incorporated into building.

   Evidence does not support taxpayer's position                                                                0729

   that it was a subcontractor not liable for privilege

   tax.

   Issue of which partner is liable for contracting tax                                                            0754

   is irrelevant in determining extent of actual

   liability.

   Certain income of taxpayer was for                                                                                0802

   pre-construction expenses and was not taxable

   as contracting.

   Owner of real property improved by others not                                                                 0804

   taxable on sale of such property as owner

   builder.

   Taxpayer's evidence did not establish that it                                                                   0808

   hired a contractor and wasn't an owner builder.

   Taxpayer could not establish that it hired a                                                                     0817

   contractor for construction work and was held

   liable as a prime contractor.

   Code speculative builder provisions encompass                                                              0821

   sale portion of a sale-leaseback transaction.

 

                                                                 Issue                      12.00

 

   Code speculative builder provisions encompass                                                              0824

   sale portion of a sale-leaseback transaction.

   "By or through others" language of 14-100                                                                      0832

   [Owner-Builder] does not require an agency

   relationship.

   A taxpayer becomes an owner-builder by                                                                       0832

   constructing, or having constructed,

   improvements to real property. Signing a

   Code Sec. 14-100 [Owner-Builder] legislatively                                                               0832

   Intent to make profit or gain irrelevant to                                                                         0832

   speculative builder status. Tax liability results

   when speculative builder definition is met.

   Contracting vs. retail activity explained.                                                                          0856

   Taxpayer did not show that some activities                                                                     0856

   should have been classified under retail,

   therefore, were included as contracting.

   Taxpayer not entitled to 35% deduction for                                                                     0864

   contracting labor since Taxpayer assessed use

   tax instead of privilege tax and not in the

   Income from maintenance contract which                                                                       1092

   includes major repairs for elevators is taxable

   income from a construction activity.

   Allocation of revenue from maintenance                                                                          1092

   contracts based on cost to determine taxable

   and non-taxable portion allowed.

 

                                                                 Issue                      12.00

 

   Taxpayer required to report 100% of                                                                               1145

   construction draws when received even though

   Taxpayer is required to post 10% security lieu of

   Hauling of contaminated soil is earth moving                                                                   1173

   subject to construction contracting tax.

   Installation of hardwired alarm systems                                                                          1375

 

                                                                 Issue                      13.00

 

   Found that partnership can be general                                                                           0197

   contractor performing contracting activity for

   which tax assessed.

   Where Taxpayer is selling and installing vinyl                                                                 0547

   floor covering, Taxpayer is a contractor and is

   entitled to the 35% in lieu of labor deduction per

   Sec 14-2(a2Bi).

   Evidence failed to show separation between                                                                   0650

   contractor and owners, who were taxed as

   contractors on proceeds from sale of project.

   Evidence does not support taxpayer's position                                                                0729

   that it was a subcontractor not liable for privilege

   tax.

   Issue of which partner is liable for contracting tax                                                            0754

   is irrelevant in determining extent of actual

   liability.

   Taxpayer could not establish that it hired a                                                                     0817

   contractor for construction work and was held

   liable as a prime contractor.

   Providing a crane and operator for hire is not a                                                                0869

   contracting activity but is a rental of tangible

   personal property.

   No exemption from contracting tax for work                                                                    0898

   Activity as construction manager subject to sales                                                           0986

   Taxpayer was acting as a construction contractor                                                           1136

    rather than a construction manager.  Therefore,

   Taxpayer's income is subject to the tax.

 

                                                                 Issue                      13.10

 

   Consignment agreements are not subject to                                                                   0464

 

                                                                 Issue                      14.00

 

   Not includable in gross receipts from contracting.                                                           0112

    Taxpayer properly elected cash receipts method

    of reporting taxes on contracting income.

 

                                                                 Issue                      15.00

 

   Contractor vs. retailer.                                                                                                  0032

   Taxpayer's income derived from consulting                                                                     0209

   services and maintenance was exempt under

   Sections 14-40(d) and 14-42.

 

                                                                 Issue                      16.00

 

   Contributions in aid of construction.                                                                               0273

   City Tax Code does not exempt capital                                                                          1340

   contribution in aid of construction (CIAC).

 

                                                                 Issue                      17.00

 

   Monies received by Taxpayer from customers for                                                            0206

    license fees reimburse Taxpayer for business

   costs and thereby constitute taxable gross

 

                                                                 Issue                      18.00

 

   Customer reimbursement for lost uniforms do not                                                            0229

    constitute sales transactions and do not

   constitute taxable receipts.

 

                                                                 Issue                      19.00

 

   Taxpayer engaged in taxable activity within City                                                              0113

   despite not receiving monthly returns from City

   and belief his license was cancelled.

   Because Taxpayer representatives' business                                                                  0189

   location in City and Phoenix phone number,

   Taxpayer found to have business activities in

   Taxpayer does business in City constituting                                                                   0191

   sufficient nexus to impose tax, though services

   on sales are made out-of-City.

   The taxpayer was found to be doing business in                                                             0201

   Privilege Tax levied on Taxpayer because of                                                                   0209

   business activities within City measured by gross

   sales whether derived from within City or without.

   Basis of tax is not location of sales, but                                                                         0209

   taxpayer's business activities within the City.

   Taxpayer was found to have sufficient business                                                              0210

   activity within the City constituting sufficient

   nexus.

   Taxpayer is in the equipment rental business and                                                           0248

   "Gain, benefit or advantage" in Code's definition                                                              0513

   of "business" does not require that property

   produce income in excess of expenses.

   Taxpayer, not the subcontracted manager, is in                                                              0613

   the restaurant business and is responsible for

   tax.

 

                                                                 Issue                      19.00

 

   Leasing company is doing business in city even if                                                           0661

    its sole purpose is as a financing vehicle with all

   revenue passed on to a related company.

   Must obtain privilege license if doing business in                                                             0671

   city. Still subject to tax if doing business in city

   without license.

   Taxpayer required to obtain license when                                                                       0694

   Taxpayer's business of reselling long distance                                                                0838

   time was not taxable as a business of

   transmitting long distance calls.

 

                                                                 Issue                      20.00

 

   Taxpayer found to be in computer equipment                                                                  0210

   rental business because of a lease interest and

   ownership interest in the equipment.

   Providing a crane and operator for hire is not a                                                                0869

   contracting activity but is a rental of tangible

   personal property.

   Taxpayer who controls game room operations is                                                             0916

   considered lessee of game equipment, not

   licensor of real property.

   Taxpayer (lessee) not required to pay Use Tax                                                               1213

   on equipment rental.  Lessor who is licensed is

   liable for tax.

 

                                                                 Issue                      21.00

 

   Excess Tax Collected-Franchise fees.                                                                           0273

   State tax.                                                                                                                    0290

   Versus surcharge.                                                                                                        0378

   Assessment of excess tax collected was                                                                       0393

   supported by taxpayer's general ledger records.

   Where amount of tax collected is determinable                                                               0472

   under normal audit procedures City Collector

   may not estimate taxes collected.

   Taxpayer substantiated claim that his records                                                                0477

   gave illusion of excess tax collected.

   Taxpayer showed that claimed excess tax                                                                     0492

   collected was actually misposted utility receipts.

   Documents submitted by Taxpayer did not relate                                                            0530

   to transactions at issue-Taxpayer did not show

   that taxes charged per books and records were

   not in fact collected.

   Revenue, including tax, collected before a "sale"                                                             0568

   has occurred under Sec 14-1 cannot lead to

   excess taxes collected.

   City should collect only their proportionate share                                                            0723

 

                                                                 Issue                      21.00

 

   Excess tax assessment abated since Taxpayer                                                             0864

   reporting on an accrual basis is entitled to

   deductions for bad debts charged off & other

   Excess tax is determined on a transaction basis                                                            0889

   not on a per billing basis. See Reg. 14-250.1.

   Limitation in Code Sec. 14.560(d) applies onto                                                               0889

   portion of tax collected from customers.

   Taxpayer assertion that no excess tax is due is                                                             0923

   unsupported by any documentation.

   Taxes collected from Customers who are also                                                                0974

   club members meet criteria of excess taxes

   collected.

   Taxpayer is liable for excess tax collected unless                                                           0974

   Funds collected in excess of City's privilege tax                                                              0989

   Taxpayer is liable for taxes collected but not                                                                  1102

   No excess tax collected.  Contract amount                                                                    1108

   includes taxes.  Taxpayer received no more than

   amount of contract.

   Assessment on tax collected but not remitted not                                                           1197

   upheld.  Tax Collector failed to prove that

   Taxpayer did collect the tax from tenants.

 

                                                                 Issue                      22.00

 

   Unreported forfeited deposits are not contracting                                                             0241

   Refundable security deposits are not taxable                                                                  0766

   gross income until they forfeit to the landlord.

   Refundable security deposits are not taxable                                                                  0767

   gross income until they forfeit to the landlord.

   Refundable security deposits are not taxable                                                                  0769

   gross income until they forfeit to the landlord.

   Refundable security deposits are not taxable                                                                  0770

   gross income until they forfeit to the landlord.

 

                                                                 Issue                      23.00

 

   Putting property into a partnership (forming the                                                               0457

   partnership) is not a taxable transaction.

 

                                                                 Issue                      24.00

 

   Freight charges to the dealer are not deductible                                                              0179

   Freight charges were properly taxable where                                                                  0209

   they represented delivery charges from

   hardware manufacturers to the retailer.

   Separately charged on books and records.                                                                     0362

   Freight charges are exempt if they are for                                                                       0633

   delivery to the retail customer, separated on the

   invoice, and broken out in Taxpayer's books and

 

                                                                 Issue                      24.50

 

   Gross income includes franchise fees and mill                                                                0970

   assessments passed through to customers.

   Franchise fee payments which are timely filed                                                                1116

   qualify for the P.C.C. Section 14-480(d) credit

   offset.

   The due date for franchise fee payments is                                                                     1116

   controlled by the language of the franchise

   agreement.

   The filing date of franchise fee payments is                                                                     1116

 

                                                                 Issue                      25.00

 

   Gratuities are not taxable gross receipts because                                                           0141

    they are for services performed.

   Gratuities taxable since not distributed in total to                                                            0921

 

                                                                 Issue                      26.00

 

   Gross Income. Property taxes.                                                                                      0006

   Printing vs. retail.                                                                                                         0013

   Deduction for property tax payment by tenant.                                                                0019

   Reimbursements, loan payoffs.                                                                                     0019

   Non-profit.                                                                                                                   0020

   Broker vs. sales income.                                                                                              0021

   Security deposits.                                                                                                        0027

   Payments received for cleaning costs.                                                                           0027

   Payments for property taxes.                                                                                        0028

   Cash discounts, trade-ins, condemnation, rental                                                             0032

 

                                                                 Issue                      26.00

 

   Monthly dues received on behalf of tenant                                                                      0033

   Payments for improvements.                                                                                         0033

   Receipts in lieu of trade-ins not deposit. Sales                                                                0034

   Broker income vs. consignment sales.                                                                           0038

   Insufficient records.                                                                                                      0039

   Contracting vs. equipment rentals.                                                                                 0040

   Payments for taxes and maintenance are                                                                       0041

   constructive gross receipts. Association dues

   and separate meter utility not gross receipts.

   Property provided to employee free of charge is                                                              0041

   Taxation of income from lease of vehicles exempt                                                           0043

   Agent revenue not taxable.                                                                                            0044

 

                                                                 Issue                      26.00

 

   Leasing vs. contracting.  Leasing where                                                                         0058

   customer has control.  Operator not

   determinative.

   Not allowed where payment is for lesser taxes                                                                0065

   Taxpayer broadcasting tower in Guadalupe, not                                                              0068

   Constitutional issues.                                                                                                   0069

   Taxpayer not renting, providing personal                                                                         0073

   Taxpayer receipt of Arizona in lieu property taxes                                                           0074

    are taxable.  Taxes are business expenses of

   Taxpayer.

   General Ledger more suitable record than sales                                                              0075

   Taxpayer cash receipts method of apportioning                                                               0118

   payments by applying a collection percentage to

   total sales and applying tax rate to result held not

    proper.

   The substance of the transfer of two planes was                                                             0253

   a trade down by the taxpayer evidenced by the

   simultaneous transfer of funds.

   Truck rental business paying tax under A.R.S.                                                               0266

 

                                                                 Issue                      26.00

 

   Gross Income v. Conduct for taxes collected.                                                                 0335

   Cancellation changes.                                                                                                  0338

   Credit sales using accrual method.                                                                                0358

   Maintain books and records to reflect.                                                                            0358

   Benefit from purchases made by lessee.                                                                        0365

   Timesharing, service versus equipment rental.                                                                0377

   Income to hotel versus agent for telephone                                                                     0378

   Federal fuel tax on user of fuel. Does not                                                                        0404

   Understated because taxpayer deducting                                                                       0406

   carrying charges on repossessions that not

   included in gross income.

   Gross income to taxpayer versus conduit for third                                                           0409

 

                                                                 Issue                      26.00

 

   Refundable deposits are not taxable receipts.                                                                 0444

   Rent paid to Taxpayer by closely held                                                                            0513

   corporation is taxable gross income to Taxpayer

   since corporate form was recognized for claiming

    rent expense deduction.

   Payments made by tenant which benefit the                                                                   0531

   landlord are included in gross income of the

   landlord.

   Quebedeau and Watkins cases give broad                                                                     0531

   interpretation of gross income including privilege

   tax and luxury tax collected by Taxpayer.

   Where Taxpayer claims that booked revenue is                                                              0557

   not taxable they must substantiate the claim with

   source documents.

   Hand tool was properly excluded from the                                                                      0579

   exemption available for machinery used directly

   in the manufacturing process.

   Taxpayer's transference of assets to its                                                                         0579

   principles in order to satisfy a legal debt

   constitutes a taxable sale between two separate

   Taxpayer's allegation that income was not from                                                              0651

   contracting, & contention City failed to prove

   otherwise, insufficient to overcome presumption

   Under the old and model code, all gross income                                                             0763

   is presumed taxable unless the taxpayer

   establishes otherwise.

   Unrelated out of state sales shipped into Phoenix                                                           0779

    by taxpayer's parent not gross income from

   taxpayer's business activity in Phoenix.

 

                                                                 Issue                      26.00

 

   Taxpayer cannot recharacterize items on books                                                             0825

   and records as revenue to capital contributions

   to avoid tax.

   Taxpayer cannot recharacterize items on books                                                             0826

   and records as revenue to capital contributions

   to avoid tax.

   Taxable gross income includes proceeds applied                                                            0832

    for taxpayer's benefit. Taxpayer receipt

   unnecessary.

   Trade-ins involve a question of scope of gross                                                                 0867

   income under 14-240(a)(3). They are not treated

    as exemptions under 14-15 and 14-350.1.

   Postage charges separately stated on customer                                                             0902

   invoice not gross income to Taxpayer.

   Tax paid to printers on printed materials and                                                                   0902

   imposition of tax upon Taxpayer's charges to

   customers do not constitute double taxation.

   Federal Fuel Excise Tax included in gross                                                                     1001

   Taxpayer's Federal and Income Tax Returns and                                                            1008

    W-2's indicate Taxpayer income only from

   wages and salaries. No other income reported.

   Guaranteed income distribution subsidy not                                                                   1056

   subject to additional 3% transient tax.

   Receipt of guaranteed income distribution                                                                      1056

   subsidy from operator of hotel is gross income

   subject to tax.

 

                                                                 Issue                      26.00

 

   Taxable gross income includes sales to                                                                         1064

   Taxpayer's accrued deferred expenses are not                                                                1271

   Taxpayer's tax and insurance refunds are not                                                                 1271

   Taxpayer's gross income from alarm monitoring                                                              1319

   is subject to tax, even if Taxpayer subcontracts

   the monitoring work to another company.

   Capital contribution in aid of construction (CIAC)                                                             1340

   is gross income taxable under utilities

   classification.

   Convenience charge collected by Ticketmaster is                                                           1358

    part of the sales transaction and is taxable

   income to Taxpayer.

 

                                                                 Issue                      27.00

 

   Rail rebates and refunds not taxable.                                                                             0399

   Cost of tangible personal property acquired by                                                                0431

   acting as purchasing agent for customer not

   included in gross receipts.

   Where City erroneously included returns and                                                                  0521

   trade-in amounts twice in calculation of gross

   receipts, assessment is adjusted to correct error.

   Deposits are taxable when received.                                                                              0582

   All gross receipts are presumed taxable.                                                                        0583

   Under the old and model code, all gross income                                                             0763

   is presumed taxable unless the taxpayer

   establishes otherwise.

   Taxpayer's evidence doesn't carry burden to                                                                   1042

   separate taxable from non-taxable income, so

   gross income is subject to the tax.

   Capital contribution in aid of construction (CIAC)                                                             1340

   is gross income taxable under utilities

   classification.

 

                                                                 Issue                      28.00

 

   Privilege tax not assessable against taxpayer                                                                 0141

   under 14-2(a)(12) because it is not in hotel

   business.

   City Code requires Taxpayer in hotel lodging                                                                  0540

   business to bill separately for food and drinks if

   he wants to treat transaction as a sale.

   Taxpayer subject to transient lodging tax                                                                       0985

   because Customer agreement does not require

   Customer to obtain and pay for a specific

   Guaranteed income distribution subsidy not                                                                   1056

   subject to additional 3% transient tax.

   Receipt of guaranteed income distribution                                                                      1056

   subsidy from operator of hotel is gross income

   subject to tax.

   Once a guest stay exceeds 30 days, Taxpayer is                                                           1376

   subject to the residential rental tax, not the

   transient tax.

   Taxpayer's hotel revenue from Amtrak subject to                                                             1376

   A person needs to obtain and be obligated to                                                                 1376

   pay lodging for more than 30 days to be

   considered non-transient.

 

                                                                 Issue                      28.50

 

   Tax statutes must be clear & unambiguous & if                                                              0712

   not, are strictly construed against taxing

   authority.

   Ambiguous tax statutes must be liberally                                                                       0725

   Tax statutes are construed liberally in favor of                                                                 0838

   the taxpayer and strictly against the City.

   Code Regulations have equal stature to Code                                                                 0869

   Sections. Regulations are not subordinate to

   Code Sections.

   Incorrect interpretation of the law by taxing                                                                     0951

   authority does not operate to estop enforcement

   of the law.

   Even if City employees misinformed Taxpayer                                                                1119

   about tax obligations (not proven in this case)

   requirements of the Code cannot be waived by

   City employee.

 

                                                                 Issue                      29.00

 

   The sale and erection of outside features did not                                                             0257

    constitute an improvement to real property.

 

                                                                 Issue                      30.00

 

   Chandler business taxed on income derived from                                                            0129

    leases consummated in Chandler for mobile

   office units permanently installed in Phoenix.

   The sale and installation of drapes and blinds                                                                 0257

   does not constitute an improvement to real

   property.

   The installation of improvements and structures                                                              0257

   including premanufactured items and other

   materials was included in contracting income.

 

                                                                 Issue                      30.10

 

   Sale of personal accident insurance not subject                                                              1033

 

                                                                 Issue                      31.00

 

   Transfer of structural steel from one subsidiary                                                               0334

   of parent company to taxpayer.  Another

   subsidiary was a sale subject to use tax.

   Interdivisional transfer are not taxable                                                                             0447

 

                                                                 Issue                      32.00

 

   Late charges not consideration received for                                                                    0207

   lease of tangible personal property, hence do

   not constitute taxable gross receipts.

   Late charges and application/fees are not                                                                       0812

   taxable as rental income. Cancellation fees are

   taxable since they are in lieu of rent.

   Late payment interest is receipt derived from                                                                  1293

   lease agreement, therefore, it is included in

   taxable gross income.

 

                                                                 Issue                      33.00

 

   Leasing revenue, as taxpayer did not exercise                                                                0085

   City agreed to waive assessment arising from                                                                 0160

   lease income. Issue raised was whether a

   department store license was a lease.

   Leasing of mobile equipment treated a rental                                                                  0430

   transaction subject to taxation by City in which

   business office of lessee is based.

   Where the leasing of real property is a                                                                           0443

   substantial and reoccurring transaction, it is

   taxable even if this is not the Taxpayer's primary

   Telephone charges separately billed to guests                                                                0558

   for outside calls are not gross income to hotel

   from business of leasing real property per Sec

   Lessor's rental receipts are not gross income                                                                 0571

   derived from a motor carrier's use of public

   highways pursuant to ARS Sec28-1599.05(I).

   Lessor's rental receipts are not gross income                                                                 0572

   derived from a motor carrier's use of public

   highways under ARS 28-1599.05(I).

   The lease of two separate offices does not                                                                     0618

   Lessor's receipts are taxable income even                                                                      0635

   though derived from motor carrier's use of public

   highways under 28-1599.05(I) (overrules CAP

   Lessors receipts are taxable income even though                                                           0685

    derived from motor carriers use of public

   highways under 28-1599.05(I) (overrules CAP

 

                                                                 Issue                      33.00

 

   Lessor's receipts are taxable income even                                                                      0746

   though derived from motor carrier's use of public

   highways under 28-1599.05(I).

   "Tenant in possession" language of 14-2(a)(9)                                                                 0766

   and 14-445(a) exists solely to isolate taxpayer

   among sublessors. It does not concern gross

   Late fees and non-sufficient funds charges are                                                                0766

   taxable gross income from the business of

   renting real property.

   Refundable security deposits are not taxable                                                                  0766

   gross income until they forfeit to the landlord.

   Section 8 low income housing payments                                                                        0766

   constitute taxable gross income to the landlords

   receiving the assistance.

   The value of the manager's apartment, leased to                                                             0766

    the manager rent free, is not imputed rental

   income to the taxpayer.

   Refundable security deposits are not taxable                                                                  0767

   gross income until they forfeit to the landlord.

   Section 8 low income housing payments                                                                        0767

   constitute taxable gross income to the landlords

   receiving the assistance.

   "Tenant in possession" language of 14-2(a)(9)                                                                 0767

   and 14-445(a) exists solely to isolate taxpayer

   among sublessors. It does not concern gross

   The value of the manager's apartment, leased to                                                             0767

    the manager rent free, is not imputed rental

   income to the taxpayer.

 

                                                                 Issue                      33.00

 

   Late fees and non-sufficient funds charges are                                                                0767

   taxable gross income from the business of

   renting real property.

   "Tenant in possession" language of 14-2(a)(9)                                                                 0769

   and 14-445(a) exists solely to isolate taxpayer

   among sublessors. It does not concern gross

   Late fees and non-sufficient funds charges are                                                                0769

   taxable gross income from the business of

   renting real property.

   Refundable security deposits are not taxable                                                                  0769

   gross income until they forfeit to the landlord.

   Section 8 low income housing payments                                                                        0769

   constitute taxable gross income to the landlords

   receiving the assistance.

   The value of the manager's apartment, leased to                                                             0769

    the manager rent free, is not imputed rental

   income to the taxpayer.

   "Tenant in possession" language of 14-2(a)(9)                                                                 0770

   and 14-445(a) exists solely to isolate taxpayer

   among sublessors. It does not concern gross

   Late fees and non-sufficient funds charges are                                                                0770

   taxable gross income from the business of

   renting real property.

   Refundable security deposits are not taxable                                                                  0770

   gross income until they forfeit to the landlord.

   Section 8 low income housing payments                                                                        0770

   constitute taxable gross income to the landlords

   receiving the assistance.

 

                                                                 Issue                      33.00

 

   A family corporation does not qualify for the one                                                             0822

   unit real property rental exemption under Reg.

   14-445.1(b)(6).

   "Tenant in actual possession" language exists                                                               0825

   solely to isolate taxpayer among sublessors. It

   does not concern gross income.

   Taxpayer's contention that leasing tax should be                                                            0830

   apportioned based on mileage or location

   rejected.

   Income from a speculative builder sale is                                                                        0832

   incurred after rental activity has ceased. It does

   not count as income under Code Sec.

   Partnership of first cousins is not from the same                                                             0852

   immediate family under Reg. 14-445.1(b)(6).

   One unit rental not tax exempt under 14-445(g).

   Under Code Sec. 14-2(a)(9), partnership's single                                                             0852

    rental unit more resembled an investment and

   had another source of income. Rental income

   The definitions of storage, use or consumption                                                                0864

   encompass the leasing of tangible personal

   property.

   Taxpayer failed to provide sufficient evidence                                                                  0950

   that Tax Collector's assessment on auto lease

   revenue is erroneous.

   Taxpayer's right to insurance proceeds is per                                                                 0950

   contract with lessee and is considered

   compensation for vehicle or its use.

   Rental Income from lease of apartments subject                                                             1037

   to Privilege Tax. Ignorance of the law does not

   relieve Taxpayer of liability.

 

                                                                 Issue                      33.00

 

   A tenant in common is responsible for the entire                                                             1091

   tax liability resulting from the rental of the

   property.

   Building insurance premiums paid by the tenant                                                             1098

   are gross income to the landlord.

   Taxpayer was not subject to the tax until she had                                                           1124

    three residential rental units available for rent.

   An owner-occupier is not a tenant.                                                                                 1151

   Taxpayer who leases commercial space to a                                                                  1281

   tenant and requires tenant to bear costs of

   taxes, maintenance & insurance can be engaged

    in the leasing business.

   Lessee's payment of maintenance expenses and                                                            1281

    property taxes is Taxpayer gross income and

   consideration for lease.

   Refundable security deposits are not taxable                                                                  1293

   Income from "dollar option" leases not taxable.                                                               1293

 

                                                                 Issue                      34.00

 

   Gross income to taxpayer and no basis for                                                                     0409

   Burden of paying purse is that of Taxpayer                                                                     0519

   although State has set a minimum contribution

   percentage which Taxpayer must follow.

 

                                                                 Issue                      35.00

 

   Licensing Revenue.                                                                                                      0010

   A license is permission to do a particular act                                                                  0560

   upon land of another - it does not give grantee

   exclusive possession and is usually revocable at

   Taxpayer failed to prove that its share of video                                                                0560

   game revenue was payment for services rather

   than licensing income.

   Taxpayer's proceeds from game machine are                                                                 0636

   The taxing of amusement income from one party                                                            0636

   and licensing income from another is not double

   taxation.

   Taxpayer required to obtain license when                                                                       0694

   Because taxpayer didn't establish what portion of                                                           0761

    its business was licensing & what part was

   service, all income is presumed to be taxable

   Use of mail boxes and portions of taxpayer's                                                                  0761

   office at any time constitutes a taxable licensing

   for use of real property.

   Licensed software delivered with software                                                                       0908

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0909

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

 

                                                                 Issue                      35.00

 

   Licensed software delivered with software                                                                       0910

   manuals and materials is tangible personal

   property under Code Section 14-2.

   Licensed software delivered with software                                                                       0911

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0912

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0913

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Licensed software delivered with software                                                                       0914

   manuals and materials is tangible personal

   property taxable under Code Section 14-2.

   Taxpayer's activity constitutes licensing real                                                                   1143

   property for use by craft vendors, and is subject

   to the tax.

   License-for-use revenue from concessionaires is                                                             1358

 

                                                                 Issue                      36.00

 

   Nontaxable service versus sale of parts with                                                                   0302

   related labor- Tangible personal property

   transferred inconsequential.

   Code ambiguous as to taxability and must be                                                                 0312

   Prior to and after ordinance G-2229-                                                                               0338

   Amount taxable.                                                                                                          0345

   Property less than 15% of the total charge.                                                                    0362

   Prior to 6/30/81, maintenance income exempt                                                                0442

   Ordinance 62229 made this taxable where

   purchasers entitled to goods and services

   Allocation of revenue from maintenance                                                                          1092

   contracts based on cost to determine taxable

   and non-taxable portion allowed.

   Income from maintenance contract which                                                                       1092

   includes major repairs for elevators is taxable

   income from a construction activity.

 

                                                                 Issue                      37.00

 

   Make-ready charges nondeductible and not                                                                    0179

   exempt services because provided by Taxpayer

   prior to transfer of property to customer.

 

                                                                 Issue                      38.00

 

   Taxable game versus nontaxable services.                                                                     0288

   Nontaxable membership fees versus game or                                                                 0290

   Taxable game versus nontaxable service.                                                                       0290

   Membership fee income of Taxpayer is taxable                                                               0486

   pursuant to Sec 14.2(a)(10) only to extent of

   percentage of retail sales.

   Membership fees not taxable as advertising                                                                    0544

   income where discount club receives direct

   payment from businesses and provides referral

   service to members

   Membership fees for discount club do not                                                                       0545

   constitute indirect or advance payment on goods

    sold by Taxpayer so are not taxable as retail

   Full amount of golf initiation and membership                                                                  1229

   fees held taxable even though member is entitled

    to all other club facility privileges.

   A portion of the membership fee related to                                                                      1278

   taxable activities is subject to the Privilege Tax.

 

                                                                 Issue                      39.00

 

   Local calls, long distance calls, rebate from                                                                   0290

   Nontaxable service versus miscellaneous income                                                           0290

   Warning tags to be tied onto machinery - Part of                                                             0294

 

                                                                 Issue                      40.00

 

   Taxpayer is not taxable on income designated as                                                           0198

   Sales of newspapers at front desk not subject to                                                            0198

   privilege tax; Taxpayer did not own property

   being sold, amounts collected were remitted to

   Taxpayer did not own property being sold,                                                                      0198

   amounts collected were remitted to newspaper.

   Sale of tangible personal property versus                                                                        0290

   Rentals of aircraft in connection with flight                                                                      0327

   training lessons - Service v. rental of tangible

   personal property.

 

                                                                 Issue                      41.00

 

   Income derived from charges associated with                                                                 0123

   funeral services nontaxable income derived from

   services not leasing.

   Income attributable to transportation for mortuary                                                            0216

    was not taxable because transportation is

   necessary and incidental.

 

                                                                 Issue                      41.50

 

   Taxpayer not entitled to offset since taxes were                                                              0755

 

                                                                 Issue                      42.00

 

   Commercial rental income received from rental of                                                            0171

    one commercial property not taxable prior to

   December 6, 1976.

   Taxpayer engaged in taxable activity rather than                                                             0172

   a casual activity in having one lease per one

   commercial property.

   Failure to file based on bona fide belief, penalty                                                              0225

   not justified. Justified after Taxpayer purchased

   another Comm. Prop. and failed to pay Tax.

   Casual activity, Pre and Post December 1976.                                                               0285

   Rental income from one commercial property is                                                              0513

   taxable between Dec 7, 1976 and March 15,

   1983.

   Renting more than one unit of commercial                                                                      0662

   Leasing unit of commercial real property taxable                                                             0687

   even if only an investment and partners do not

   make money. Doing business doesn't require

   Taxpayer responsible for payment of Privilege                                                                 1197

   Tax even if he has only one commercial rental

   property.

   Taxpayer did not meet the single unit                                                                             1277

   Taxpayer, a partnership, was not subject to the                                                              1287

 

                                                                 Issue                      42.00

 

   Taxpayer's corporation and sole proprietorship                                                                1328

 

                                                                 Issue                      42.50

 

   Taxpayer's who were not contractors cannot be                                                              0538

   taxed under the owner-builder provisions of the

   Code.

   Taxpayer was an owner-builder when it improved                                                             0574

    Azteca Plaza, but not a "prime contractor" since

   it didn't sell property within two years.

   Partnership not an owner-builder because it was                                                             0602

   not a contractor, even though partner did the

   contracting.

   Owner of real property improved by others who                                                               0614

   did all contracting work was not taxable on sale

   of property within two years of completion.

   Taxpayer not an owner builder because it                                                                       0615

   received no contracting receipts on sale of

   project constructed by another.

   Limited partnership joint venturer that built on                                                                 0651

   joint venture's land was not an owner-builder

   because it built on another's land.

   Revenue from sale of property, shown partly to                                                               0671

   be for service and non-contracting agreements,

   not taxable to owner-builder.

   Owner of property who performed no contracting                                                             0671

   activity & received no income not an owner

   builder & not liable for use tax.

   Taxpayer who performed no contracting activity                                                              0696

   or received no contracting compensation is not

   an owner-builder.

   Owner of improved property which does engage                                                              0697

   in contracting activity or receive contracting

   compensation is not an owner-builder.

 

                                                                 Issue                      42.50

 

   Owner of real property improved by others are                                                                 0701

   not taxable on sale of such property as owner

   builder.

   Owner of real property improved by others are                                                                 0702

   not taxable on sale of such property as owner

   builder.

   Owner of real property improved by others are                                                                 0703

   not taxable on sale of such property as owner

   builder.

   Old code - taxpayer not a contractor, therefore                                                               0713

   General partner of partnership not liable as                                                                     0760

   owner-builder even though it was contractor.

   Partner was an "outsider" following CAP 602.

   General partnership held not liable as                                                                            0766

   owner-builder which hired independent

   contractor to construct building.

   City's recommendation that owner-builder                                                                       0776

   assessment be abated is adopted by hearing

   officer.

   Owner of real property improved by others not                                                                 0804

   taxable on sale of such property as owner

   builder.

   Taxpayer's evidence did not establish that it                                                                   0808

   hired a contractor and wasn't an owner builder.

   Taxpayer could not establish that it hired a                                                                     0817

   contractor for construction work and was held

   liable as a prime contractor.

 

                                                                 Issue                      42.50

 

   A taxpayer becomes an owner-builder by                                                                       0832

   constructing, or having constructed,

   improvements to real property. Signing a

   Code Sec. 14-100 [Owner-Builder] legislatively                                                               0832

   Intent to make profit or gain irrelevant to                                                                         0832

   speculative builder status. Tax liability results

   when speculative builder definition is met.

   "By or through others" language of 14-100                                                                      0832

   [Owner-Builder] does not require an agency

   relationship.

   A taxpayer can be an owner-builder and                                                                         0891

   Application of Code Sec. 14-417 owner builder                                                                0891

   tax is retroactive under case facts.

   Code Sec. 14-100 and 14-416 are not                                                                            0891

   Code speculative builder provisions do not apply                                                             0891

   retroactively. Code only relies on antecedent

   facts.

   Imposition of owner-builder tax is not made in the                                                           0891

    event of a sale. Rather, tax is imposed upon

   construction transactions.

   Under Code Sec. 14-416, the sale of land with                                                                0891

   grading, installation of utilities, paving is

   improved land and subject to speculative builder

 

                                                                 Issue                      42.50

 

   An owner-builder's sale of his personal residence                                                            1164

 

                                                                 Issue                      42.70

 

   Taxpayer, a restaurant, failed to prove that it had                                                            0560

    partnership arrangement with video game

   owner.

   Taxpayer is not a partnership because it has no                                                             1151

   Partner's individual income may be considered                                                               1237

   for casual commercial lease purposes.

 

                                                                 Issue                      43.00

 

   Repair items nor equipment used in plant to                                                                   0229

   clean uniforms exempt under 14-50(a)(9)

   because such operations not Taxpayer primary

 

                                                                 Issue                      44.00

 

   Prime contractor versus consulting agent.                                                                      0289

   Owner builder.                                                                                                             0379

   Taxpayer's use of subcontractor form did not                                                                  0631

   change its status as a prime where it failed to

   show a prime was in control of the project.

 

                                                                 Issue                      45.00

 

   It was found that taxpayer has not met its burden                                                           0256

   of proving that sales to some job printers were

   sales for resale.

   Sales definition.                                                                                                           0294

   Applying printed letters to drawings through                                                                    0515

   typesetting process is taxable typesetting activity

   under Sec 14-2 (a)(4).

   Mounting designs on foam cork or wall for                                                                      0515

   presentation to clients not taxable activity under

   Sec 14-2(a)(4).

   Testimony at hearing supported finding that                                                                    0515

   camera work was not part of printing process and

    therefore not taxable under 14-2(a)(4).

   Use tax held not to apply to printing plates of                                                                 0554

   taxpayer lithographer who