Phoenix, AZ 251 West Washington, 85003

Amendments or Special Provisions:

1. Food for Home Consumption will be reduced from two percent (2%) to one percent (1%) effective January 1, 2014, with a further reduction to zero percent (0%) effective April 1, 2015. .

2. Impose a 0.5% rate on advertising.

3. Impose a 2.7% rate on telecommunications; 4.7%.  (Effective February 1, 1998)

4. Impose a 2.7% rate on utilities.

5. Impose a 2.7% rate on wastewater removal services. (Effective June 8, 1988)

6. Impose an additional 5.3% bed tax.

7. Jet fuel taxed at $.00732 per gallon.

8. Amendment to Sec. 310 as follows: (Effective January 20, 1988) (Expires on December 31, 2014)

Sec. 14-310. Licensing: annual license fee; transferability; display; penalties; residential property provisions; cancellation; renewal; late application provisions; actions.

(a) The Privilege License shall be valid unless cancelled or revoked under the provisions of Section 14-320 or by surrender of the license by the licensee or expiration through cessation by the licensee of the business activity for which it was issued.

(b) The Privilege License shall be nontransferable between owners, and shall be on display to the public in the licensee's place of business. Closure of one business location in order to relocate the same business entity at a new business location will not require a new license fee.

(c) Any licensee who permits his license to expire through cancellation as provided in Section 14-320, by his request for cancellation, by surrender of the license, or by the cessation of the business activity for which the license was issued, and who thereafter applies for a license, shall be granted a new license as an original applicant, shall pay the application license fee imposed by Section 14-300, and the annual license fee imposed herein. Any licensee who loses or misplaces his Privilege License which is still in effect shall be charged the current application license fee for each reissuance of a license.

(d) In addition to the license application fee imposed under Section 14 -300, and excepting those persons paying the annual license fee imposed under (f) and (g) of this Section, each person licensed under this Chapter shall pay an annual license fee of fifty dollars ($50.00) for each license held by such person. Such fee shall be due and payable no later than January 31 of each year. Such annual fee must be paid to and received by the Tax Collector by the due date. However, any application for a license to report solely under the business activity of use tax is exempt from the annual license fee until applicant is required to report under any other business activity.

(e) Any licensee who fails to renew his license on or before the date provided in (d) above shall be deemed to be operating without a license following such due date, and shall be subject to all penalties imposed under this Chapter against persons required to be licensed and operating without a license. The non-licensed status may be removed by payment of an annual license fee in the amount of one hundred fifty percent (150%) imposed under (d) above, and the payment of a nonrefundable application fee required under Section 14-300. The $25 license fee increase may be waived by the Tax Collector in the circumstances listed in Section 14-540(e).

(f) Notwithstanding the provisions of (d) above, a person who is engaged in the rental of residential real property, other than transient lodging, shall pay an annual license fee of two dollars ($2.00) per residential unit with an annual cap of fifty ($50.00) dollars per license (excluding units primarily used for transient lodging) per year. The due date for such fees shall be as set forth in (d) above, and such fee shall be nonrefundable. Any licensee required to pay an annual fee under this subsection, who fails to pay same by said due date shall be deemed to be operating without a license after such date, and subject to all penalties imposed under this Chapter against persons required to be licensed and operating without a license. The non-licensed status may be removed by payment of a penalty of an additional one dollar ($1.00) per unit per year, and the annual license fee, and the payment of a nonrefundable application fee required under Section 14-300. The $1.00 penalty per unit may be waived by the Tax Collector for the circumstances listed in Section 14-540(e).

(g) Notwithstanding the provisions of subsections (d) and (f) above, a person engaged in the rental, leasing or licensing of nonresidential property shall be subject to the additional tax imposed by Section 14-446 hereunder in lieu of an annual license fee for such nonresidential rental, leasing or licensing activity only. In the event that a licensee engaged in such nonresidential rental, leasing or licensing activity is also engaged in other business activities at such location or locations, which other activities are subject to a tax imposed by this Chapter, such licensee shall pay the annual license fee imposed by (d) herein with respect to each such other business activity in addition to the tax on rental, leasing or licensing activity imposed herein and under Section 14-446.

(h) If any person required to be licensed under this Chapter fails to obtain a license on or before the conducting of any business activity requiring such license, such person shall be subject to a penalty in the amount of one hundred fifty percent (150%) of the applicable fee for each event or period of time for which such fee would have been imposed from and after the date on which such activity commenced until paid. This penalty shall be in addition to any other penalty imposed under this Chapter and must be paid prior to the issuance of any license. This penalty may be waived by the Tax Collector for the circumstances listed in Section 14-540(e).

(i) Notwithstanding the failure of any person to apply for a license and to remit all fees and penalties, if any, imposed herein, such person conducting a business activity subject to licensing without obtaining a license, shall be liable to the city for all applicable fees and penalties and shall be subject to the provisions of Sections 14-580 and 14-590, to the same extent as if said fees and penalties were taxes and penalties under such Sections.

(j) (Reserved)

(k) No request for waiver of penalty under subsections (e), (f) and (h) above may be granted unless written request for waiver is received by the Tax Collector within forty-five (45) days following the imposition of penalty. Any taxpayer aggrieved by the refusal to grant a waiver under subsections (e), (f) and (h) above may appeal under the provisions of Section 14-570 provided that such petition of appeal is received by the Tax Collector within forty-five (45) days of the taxpayer's receipt of notice by the City that waiver has been denied.

9. Section 14-315 is added as follows: (Effective January 20, 1988) (Expires on December 31, 2014)

Sec. 14-315. Transient privilege licenses.

Notwithstanding the provisions of Section 14-300, a person who will be engaged in business for a period of thirty (30) days or less, may be issued a transient privilege license, which shall be valid only for a thirty (30) day period following the application date, upon payment of a transient application and license fee of twenty-five ($25.00) dollars in lieu of all other fees imposed under this Article. In the event that a person obtaining and operating a business activity by virtue of a transient privilege license, continues to conduct said business beyond the thirty (30) days set forth in such license, such person shall be deemed to be conducting a business activity in the city without a valid privilege license, and shall be subject to all penalties imposed on such activity under this Chapter. In addition thereto, such person shall not be relicensed with either a privilege license under the provisions of Section 14-300, or a further temporary license under the provision of this Section without paying all other applicable application fees and annual fees.

10. Section 14-407 is added as follows:

Sec. 14-407. Advertising: assignment of contractual liability to remit advertising taxes; conditions; requirements; suspension of liability; reinstatement of liability; suspension of limits of actions.

(a) General conditions. Subject to all other provisions of this Section, the right of a taxpayer to enforce a contractual obligation of a customer to reimburse him for taxes imposed upon the gross income from local advertising in Section 14-405 may be assigned to the City for collection if all of the following conditions are met:

(1) there exists a legally enforceable agreement between the media and the person liable for the payment to the media for the advertisement ("advertiser"), requiring said advertiser to reimburse the media for any tax imposed upon the media by the City for local advertising; and

(2) the advertiser fails to reimburse the media for such tax within ninety (90) days of billing therefor; and

(3) such failure can be documented to the satisfaction of the Tax Collector.

(b) Assignment. Subject to the provisions for reinstatement set forth in this Section, the right to enforce the tax reimbursement provisions provided in subsection (a)(1) above may be assigned by the media, as provided by Regulation, after the ninety (90) day period provided in subsection (a)(2) above, and the liability of the media to pay such tax shall be suspended until the advertiser has paid the tax or the liability of the media has been reinstated as provided by this Section.

(c) Reinstatement due to administrative or judicial review. In the event that it is determined, in the manner provided in this Chapter, by the Hearing Officer in any action for administrative review or by the courts in judicial review of such administrative review, that the alleged liability of the advertiser to reimburse the media is barred by any defense, affirmative or otherwise, which would have existed between the media and the advertiser, the assignment to the City provided in this Section shall be cancelled, and the suspended liability of the media will be reinstated upon issuance of a judgment or order by said court, or upon delivery of a ruling by the Hearing Officer, establishing such defense.

(d) Suspension of limitations. For the purposes of this Section only, the limitation of actions provided elsewhere in this Chapter shall not apply to tax liabilities assigned or reinstated by this Section, and the City may initiate either an assessment or a court action at any time up to four (4) years following the assignment of such taxes to the City, or four (4) years after the ruling, judgment, or order establishing the reinstatement of such tax liability to the media.

11. Section 14-446 is added as follows: (Effective January 20, 1988)

Sec. 14-446. Additional tax on non-residential rental business activity.

In addition to the taxes levied under Section 14-445, there is hereby levied and shall be collected by the Tax Collector an additional tax in an amount equal to one tenth of one percent (0.1%) of the gross income from the business activity of any person engaged in rental, leasing or licensing of nonresidential property or property units.

12. Section 452 is added as follows: (Effective May 3, 1989)

Sec. 14-452. Rental, leasing, and licensing for use of tangible personal property: additional tax upon short-term motor vehicle rental.

(a) In addition to the taxes levied as provided in Section 14-450, there is hereby levied and shall be collected an additional tax in an amount equal to two percent (2%) of the gross income from the business activity of any person engaging or continuing in the business of leasing, licensing for use, or renting any motor vehicle with a gross vehicle weight of less than twelve thousand (12,000) pounds for a term of not more than thirty-one (31) calendar days, such term to be determined as follows:

(1) if prior to or at the commencement of the lease, license or use of the motor vehicle, the lessor and lessee have agreed in writing that, excluding charges for mileage and damage, the primary consideration shall be a fixed amount based upon the time for such lease, license or use, the term shall be determined by the total period for which such fixed amount is or was charged or paid for such motor vehicle use; or,

(2) in all other cases, the term shall be deemed to begin upon the date of first possession or use of said vehicle and to conclude when such possession or use ceases.

(b) Gross income from transactions specified in Subsection 14-450(c) shall be exempt from the Privilege Taxes imposed by this Section.

13. Section 14-485 is added as follows: (Effective June 8, 1988)

Sec. 14-485. Wastewater Removal Services

(a) The tax rate shall be an amount equal to two and seven tenths percent (2.7%) of the gross income from the business activity upon every person engaging or continuing in the business of providing wastewater removal services from premises, locations, or facilities located within the city limits of Phoenix by means of sewer lines or similar pipelines.

(b) The tax imposed by this section shall not apply to gross income relating to the providing of wastewater removal services from a qualifying hospital, qualifying community health center or a qualifying health care organization.

14. Regulation 14-270.1 is amended by adding subsection (d) as follows: (Effective June 8, 1988)

(d) providing wastewater removal to consumers or ratepayers, by means of sewers or pipeline, or by any other method.

15. Regulation 14-310.1 is added as follows: (Effective January 20, 1988) (Expires on December 31, 2014)

Reg. 14-310.1. Proration of initial annual license fees.

(a) Licensees, subject to the provisions of Section 14-310(d), whose initial application for a privilege license is received by the Tax Collector after January 1, 1988, will be subject to an initial annual license fee imposed by Section 14-310(d) on a proration schedule as follows:

BUSINESS START DATE	APPLICABLE LICENSE FEE
January 1 - March 31	$50.00
April 1 - June 30	37.50
July 1 - September 30	25.00
October 1 - December 31	12.50

(b) Licensees, subject to the payment of the annual license fee imposed by Section 14-310(f) for residential real property, whose initial application for a privilege license is received by the Tax Collector after January 1, 1988, will be subject to an initial annual license fee imposed by Section 14-310(f) on a proration schedule as follows:

BUSINESS START DATE	APPLICABLE LICENSE FEE
January 1 - March 31	$2.00 (per unit)
April 1 - June 30	1.50 (per unit)
July 1 - September 30	1.00 (per unit)
October 1 - December 31	31 .50 (per unit)

16. Regulation 14-310.2 is added as follows: (Effective January 20, 1988) (Expires on December 31, 2014)

Reg. 14-310.2. "Casual" exemption of activities from the licensing requirements of Section 14-310.

Individuals, other than those engaging in rental of real property, may be considered as engaged in "casual" activities, and not subject to the annual license fee imposed under Section 14-310, provided that they are engaged in activities such as the private sale of personal automobiles, garage sales, and the sale of homemade artifacts, on no more than three separate occasions during any calendar year.

17. Regulation 14-310.3 is added as follows: (Effective January 20, 1988) (Expires on December 31, 2014)

Reg. 14-310.3. Annual license fee for persons engaged in providing transient and non-transient lodging.

(a) For the purposes of payment of the annual license fee imposed by Section 14-310, and this regulation, "primarily used for transient lodging" shall mean actual use of that particular lodging unit as transient lodging at or exceeding eighty-five percent (85%) of total use.

(b) For the purposes of subsections 14-310(b) and (b) only, it shall be presumed that each lodging unit is not primarily used for transient lodging and is therefore subject to the two dollar ($2.00) per unit annual fee, until the contrary is established by the licensee to the satisfaction of the Tax Collector.

(c) A person who is engaged in providing both transient and non -transient lodging shall:

(1) The two dollar ($2.00) per unit annual license fee for each unit not primarily used for transient lodging; plus

(2) The fifty dollar ($50.00) per location annual license fee for each location where he is providing units primarily used for transient lodging.

18. Regulation 14-407.1 is added as follows:

Reg. 14-407.1. Advertising: assignment of taxes.

(a) For the purpose of effectuating the assignment provisions of Section 14-407, and in order for a person subject to the tax on local advertising to qualify for a suspension of tax liability upon such gross income from local advertising when the advertiser has failed to reimburse the taxpayer for taxes due, the taxpayer must submit to the Tax Collector all of the following:

(1) sufficient evidence to indicate that the advertiser has failed or refused to pay the separately stated and billed City Privilege Tax in question when paying for the advertisement in question and

(2) evidence of the amount of tax unpaid; and

(3) either of the following:

(A) a properly executed written contract for the advertisement in question obligating the advertiser to reimburse the media for the separately stated City privilege Tax on local advertising.

(B) a published rate card, schedule, proposal, availabilities sheet, or confirmation notice which was in effect and distributed by means recognized in the industry as establishing advertising rates applicable to the advertisement in question which clearly states that all billings for advertising or that the billing in question will have City Privilege Tax added thereto.

(b) Examples of sufficient evidence to establish the amount of unpaid City tax as a deduction for this Section:

(1) a rate card for the advertising in question stating that City tax will be added to all billings, plus an invoice showing the City tax as a separately itemized charge to the principal amount, plus a copy of the remittance of the taxpayer paying only the principal amount and not the tax.

(2) an invoice showing the City tax as a separately itemized charge to the principal amount, plus correspondence from the advertiser to the media indicating that as a matter of policy it refuses to pay any added tax on advertising.

(c) Reporting requirements.

(1) All taxpayers shall report "assigned taxes" as a deduction in the reporting period occurring ninety (90) days after payment of advertising income (with non-payment) of taxes occurs; and

(2) The amount of gross income from local advertising to which such to-be-assigned taxes relate must be included and reported as part of the gross receipts of the taxpayer and itemized as "Assigned Taxes - Advertising" as a deduction from such receipts on the taxpayer's return; and

(3) The documentation required by Section 14-407 to support the claim of assignment of taxes must accompany the return claiming such assignment as a deduction.

19. Regulation 14-460.1 (a) is amended as follows: (Effective June 8, 1988)

(10) wastewater removal services, per Section 14-485.

20. Regulation 14-200.1 (a) is amended to read: (Effective April 20, 1994)

(a) Refundable deposits shall be includable as gross income of the taxpayer for the month in which the deposits are forfeited by the lessee.

(b) Nonrefundable deposits for cleaning, keys, pet fees, maintenance, or for any other purpose are deemed gross income upon receipt.

21. Section 14-445 is amended by adding a new (n) to read: (Effective April 20, 1994)

(n) Notwithstanding the provisions of Section 14-200(b), the fair market value of one (1) apartment, in an apartment complex provided rent free to an employee of the apartment complex is not subject to the tax imposed by this Section. For an apartment complex with more than fifty (50) units, an additional apartment provided rent free to an employee for every additional fifty (50) units is not subject to the tax imposed by this Section.

22. A new Section 14-265 is added to read: (Effective July 1, 1994)

Sec. 14-265. Tax credit offset for cable license fees.

Notwithstanding all other provisions of the Phoenix City Code, there shall be allowed as an offset, up to amount of tax due from a cable operator licensed under Chapter 5, Phoenix City Code, arising from its business activities relating to or forming a part of its cable system operation under such license by such operator, and taxable under Article IV of this chapter; any amounts paid to the City for cable license fees.

23. Interest rate on Refunds

Section 14-560 (d) reads:

(d) Interest shall be allowed at the rate of interest earnings on the City of Phoenix's treasurer's pool for the period of time the cash was held. Interest shall be calculated from the time of the refund claim made to the City by the taxpayer.

24. Effective 1/1/16, this City has a 2% rate on the portion of a single item of tangible personal property that exceeds $10,000. The portion of the single item, under $10,000 is taxed at the retail rate of 2.3%.

25. On August 25, 2015, voters approved Prop 104 which led to the adoption of Ordinance S-41591 and Ordinance G-6073. These ordinances allowed for a two-level tax structure for “big ticket” items under retail and use tax. This went into effect on January 1, 2016. The threshold was set at $10,000, but the ordinances also required that this threshold will be adjusted for inflation on a biennial basis beginning January 1, 2018. The results of the inflation analysis determined that the threshold will be increased by $303, bringing the new total to $10,303. The business class codes will now be 167 for retail over the threshold and 169 for use tax over the threshold. These changes will be effective January 2018.