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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 Assessment withdrawn. 1203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