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(a) Tax rate. The tax rate shall be at an amount equal to two and six-tenths (2.6) percent of the gross income from the business activity upon every person engaging or continuing in the business of providing telecommunication services to consumers within this city.
(1) Telecommunication services shall include:
a. Two-way voice, sound, and/or video communication over a communications channel.
b. One-way voice, sound, and/or video transmission or relay over a communications channel.
c. Facsimile transmissions.
d. Providing relay or repeater service.
e. Providing computer interface services over a communications channel.
f. Time-sharing activities with a computer accomplished through the use of a communications channel.
(2) Gross income from the business activity of providing telecommunication services to consumers within this city shall include:
a. All fees for connection to a telecommunication system.
b. Toll charges, charges for transmissions, and charges for other telecommunications services; provided that such charges relate to transmissions originating in the city and terminating in this state.
c. Fees charged for access to or subscription to or membership in a telecommunication system or network.
d. Charges for telephone, fax, or Internet access services provided at an additional charge by a hotel business subject to taxation under section 19-444.
(3) Gross income from the business activity of providing telecommunication services to consumers within this city shall not include:
a. Charges for installation, maintenance, and repair of telecommunication equipment which are subject to the provisions of sections 19-415, 19-416, or 19-417 (construction contracting); 19-445 (real property rental); 19-450 (tangible personal property rental); or 19-460 (retail sales); depending upon the nature of the work performed.
(4) Mobile equipment. In cases where the customer is being provided telecommunication services to receiving/ transmission equipment designed to be mobile in nature (for example, mobile telephones, portable hand-held two-way radios, paging devices, etc.), the provider shall, for the purposes of the tax imposed by this section, determine whether such provider's customers are "within this city" by the billing address of the customer, provided that such address is a permanent residence or business location of the consumer within the State.
(b) Resale telecommunication services. Gross income from sales of telecommunication services to another provider of telecommunication services for the purpose of providing the purchaser’s customers with such service shall be exempt from the tax imposed by this section; provided, however, that such purchaser is properly licensed by the city to engage in such business.
(c) Interstate transmissions. Charges by a provider of telecommunication services for transmissions originating in the city and terminating outside the state are exempt from the tax imposed by this section.
(d) (Reserved).
(e) (Reserved).
(f) Prepaid calling cards. Telecommunications services purchased with a prepaid calling card that are taxable under section 19-460 are exempt from the tax imposed under this section.
(g) Internet access services. The gross income subject to tax under this section shall not include sales of internet access services to the person’s subscribers and customers. For the purposes of this subsection:
(1) “Internet” means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio.
(2) “Internet access” means a service that enables users to access content, information, electronic mail or other services over the internet. Internet access does not include telecommunication services provided by a common carrier.
(h) Alarm monitoring services. The gross income subject to tax under this Section shall not include sales of monitoring services relating to an alarm system as defined in A.R.S. Section 32-101.
(i) Over-The-Top services. The gross income subject to tax under this section shall not include sales of over-the-top services. For the purposes of this paragraph "over-the-top services" means audio or video programming services that are received by the purchaser by means of an internet connection, regardless of the technology used, that include linear or live programming and that are generally considered comparable to programming provided by a radio or television broadcast station and includes related on demand programming provided at no additional charge, regardless of whether the services are provided independently or packaged with other audio or video programming.
(j) Notwithstanding the tax rate identified elsewhere in this section, an additional tax in an amount equal to one-tenth of one (0.1) percent of the gross income from any business activity taxable under this section is imposed pursuant to Chapter IV, Section 5 of the Charter of the City of Tucson.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8783, § 1, 12-2-96; Ord. No. 9322, § 11, 11-22-99; Ord. No. 9652, § 7, 1-14-02; Ord. No. 10361, § 11, 12-19-06, eff. 1-1-07; Ord. No. 11479, § 1, 8-8-17; Ord. No. 11485, eff. 8-8-17; Ord. No. 11518, eff. 1-23-18; Ord. No. 11936, § 14, 7-12-22)
Editor’s note – Section 14 of Ord. No. 11936, adopted July 12, 2022, provides for an effective date of July 24, 2014, for subsections (a)(2) and (h), and the remainder having an effective date of July 1, 2019.
(a) The tax rate shall be at an amount equal to two and six-tenths (2.6) percent of the gross income from the business activity upon every person engaging or continuing in the business of providing the following forms of transportation for hire from this city to another point within the state:
(1) Transporting of persons or property by railroad; provided, however, that the tax imposed by this subsection shall not apply to transporting freight or property for hire by a railroad operating exclusively in this state if the transportation comprises a portion of a single shipment of freight or property, involving more than one railroad, either from a point in this state to a point outside this state or from a point outside this state to a point in this state, for purposes of this paragraph, “a single shipment” means the transportation that begins at the point at which one of the railroads first takes possession of the freight or property and continues until the point at which one (1) of the railroads relinquishes possession of the freight or property to a party other than one (1) of the railroads.
(2) Transporting of oil or natural or artificial gas through pipe or conduit.
(3) Transporting of property by aircraft.
(4) Transporting of persons or property by motor vehicle, including towing and the operation of private car companies, as such are defined in Article VII, Chapter 14, Title 42, Arizona Revised Statutes; provided, however, that the tax imposed by this subsection shall not apply to:
a. Gross income subject to the tax imposed by Article IV, Chapter 16, A.R.S. Title 28.
b. Gross income derived from the operation of a governmentally adopted and controlled program to provide urban mass transportation.
c. Reserved.
d. Reserved.
(b) Deductions or exemptions. The gross proceeds of sales or gross income derived from the following sources is exempt from the tax imposed by this section:
(1) Income that is specifically included as the gross income of a business activity upon which another section of Article II imposes a tax, that is separately stated to the customer and is taxable to the person engaged in that classification not to exceed consideration paid to the person conducting the activity.
(2) Income from arranging amusement or transportation when the amusement or transportation is conducted by another person not to exceed consideration paid to the amusement or transportation business.
(3) Any amount attributable to fees collected by transportation network companies issued a permit pursuant to A.R.S. Section 28-9552.
(4) Transporting for hire persons by transportation network company drivers on transactions involving transportation network services as defined in A.R.S. Section 28-9551.
(5) Transporting for hire persons by vehicle for hire companies issued a permit pursuant to A.R.S. Section 28-9503.
(6) Transporting for hire persons by vehicle for hire drivers on transactions involving vehicle for hire services as defined in A.R.S. Section 28-9501.
(c) The tax imposed by this section shall not include arranging transportation as a convenience to a person’s customers if that person is not otherwise engaged in the business of transporting persons, freight or property for hire. This exception does not apply to businesses that dispatch vehicles pursuant to customer orders and send the billings and receive the payments associated with that activity, including when the transportation is performed by third party independent contractors. For the purposes of this Subsection, ‘arranging’ includes billing for or collecting transportation charges from a person’s customers on behalf of the persons providing the transportation.
(d) Notwithstanding the tax rate identified elsewhere in this section, an additional tax in an amount equal to one-tenth of one (0.1) percent of the gross income from any business activity taxable under this section is imposed pursuant to Chapter IV, Section 5 of the Charter of the City of Tucson.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8958, § 6, 9-22-97; Ord. No. 9322, § 12, 11-22-99; Ord. No. 10361, § 12, 12-19-06, eff. 1-1-07; Ord. No. 11479, § 1, 8-8-17; Ord. No. 11485, eff. 8-8-17; Ord. No. 11518, eff. 1-23-18; Ord. No. 11936, § 15, 7-12-22)
Editor’s note – Section 15 of Ord. No. 11936, adopted July 12, 2022, provides for an effective date of Sept. 1, 2016.
(a) Tax Rate. The tax rate shall be at an amount equal to two and six-tenths (2.6) percent of the gross income from the business activity upon every person engaging or continuing in the business of producing, providing or furnishing utility services, including electricity, electric lights, current, power, gas (natural or artificial), or water to:
(1) Consumers or ratepayers who reside within the city.
(2) Consumers or ratepayers of this city, whether within the city or without, to the extent that this city provides such persons utility services, excluding consumers or ratepayers who are residents of another city or town which levies an equivalent excise tax upon this city for providing such utility services to such persons.
(b) Exclusion of Certain Sales of Natural Gas to a Public Utility. Notwithstanding the provisions of subsection (a) above, the gross income derived from the sale of natural gas to a public utility for the purpose of generation of power to be transferred by the utility to its ratepayers shall be considered a retail sale of tangible personal property subject to sections 19-460 and 19-465, and not considered gross income taxable under this section.
(c) Resale Utility Services. Sales of utility services to another provider of the same utility services for the purpose of providing such utility services either to another properly licensed utility provider or directly to such purchaser's customers or ratepayers shall be exempt and deductible from the gross income subject to the tax imposed by this section, provided that the purchaser is properly licensed by all applicable taxing jurisdictions to engage or continue in the business of providing utility services, and further that the seller maintains proper documentation, in a manner similar to that for sales for resale, of such transactions.
(d) Reserved.
(e) Exclusion of Sales of Utility Services to Nonprofit Primary Health Care Facilities. The tax imposed by this section shall not apply to sales of utility services to a qualifying hospital, qualifying community health center or a qualifying health care organization, except when sold for use in activities resulting in gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512.
(f) [Exclusion of Sales of Natural Gas or Liquefied Petroleum Gas.] The tax imposed by this section shall not apply to sales of natural gas or liquefied petroleum gas used to propel a motor vehicle.
(g) [Exceptions to Tax.] The tax imposed by this section shall not apply to:
(1) Revenues received by a municipally owned utility in the form of fees charged to persons constructing residential, commercial or industrial developments or connecting residential, commercial or industrial developments to a municipal utility system or systems if the fees are segregated and used only for capital expansion, system enlargement or debt service of the utility system or systems.
(2) Revenues received by any person or persons owning a utility system in the form of reimbursement or contribution compensation for property and equipment installed to provide utility access to, on or across the land of an actual utility consumer if the property and equipment become the property of the utility. This exclusion shall not exceed the value of such property and equipment.
(h) [Alternative Fuel.] The tax imposed by this section shall not apply to sales of alternative fuel as defined in A.R.S. § 1-215, to a used oil fuel burner who has received a department of environmental quality permit to burn used oil or used oil fuel under A.R.S. Section 49-426 or Section 49-480.
(i) The tax imposed by this section shall not apply to sales or other transfers of renewable energy credits or any other unit created to track energy derived from renewable energy resources. For the purposes of this paragraph, "renewable energy credit" means a unit created administratively by the Corporation Commission or governing body of a public power utility to track kilowatt hours of electricity derived from a renewable energy resource or the kilowatt hour equivalent of conventional energy resources displaced by distributed renewable energy resources.
(j) The tax imposed by this section shall not apply to the portions of gross proceeds of sales or gross income attributable to transfers of electricity by any retail electric customer owning a solar photovoltaic energy generating system to an electric distribution system, if the electricity transferred is generated by the customer's system.
(k) Reserved.
(l) Notwithstanding the tax rate identified elsewhere in this section, an additional tax in an amount equal to one-tenth of one (0.1) percent of the gross income from any business activity taxable under this section is imposed pursuant to Chapter IV, Section 5 of the Charter of the City of Tucson.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 6938, § 14, 4-25-88; Ord. No. 8784, § 8, 12-2-96; Ord. No. 9069, § 1(11), 6-15-98; Ord. No. 11183, § 4, 6-17-14, eff. 1-1-07; Ord. No. 11219, § 3, 12-9-14, eff. 1-1-15; Ord. No. 11479, § 1, 8-8-17; Ord. No. 11485, eff. 8-8-17; Ord. No. 11518, eff. 1-23-18)
(a) The tax rate shall be an amount equal to zero percent (0%) of the gross income from the business activity upon every person engaging or continuing in the business of providing wastewater removal services by means of sewer lines or similar pipelines to:
(1) Consumers or ratepayers who reside within the city.
(2) Consumers or ratepayers of this city, whether within the city or without, to the extent that this city provides such persons wastewater removal services, excluding consumers or ratepayers who are residents of another city or town which levies an equivalent excise tax upon this city for providing such wastewater removal services to such persons.
(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.
(Ord. No. 11183, § 11, 6-17-14, eff. 1-1-13)
DIVISION 5.
ADMINISTRATION
ADMINISTRATION
(a) The administration of this article is vested in the tax collector, except as otherwise specifically provided, and all payments shall be made to the tax collector.
(b) The tax collector shall prescribe the forms and procedures necessary for the administration of the taxes imposed by this article.
(c) Except as provided in this section, no rule or regulation shall be adopted until approved by formal action of the city council.
(d) (Reserved).
(e) The unified audit committee shall publish uniform guidelines that interpret the Model City Tax Code and that apply to all cities and towns that have adopted the Model City Tax Code as provided by A.R.S. Section 42-6005.
(1) Prior to finalization of uniform guidelines that interpret the Model City Tax Code, the unified audit committee shall disseminate draft guidelines for public comment.
(2) Pursuant to A.R.S. Section 42-6005(d), when the state statutes and the Model City Tax Code are the same and where the Arizona department of revenue has issued written guidance, the department's interpretation is binding on cities and towns.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8440, § 17, 1-23-95; Ord. No. 8784, § 9, 12-2-96; Ord. No. 9652, § 8, 1-14-02)
Editors Note: It should be noted that the provisions of Ord. No. 9641 become effective retroactive to January 1, 2002.
(a) Except as specifically provided, it shall be unlawful for any official or employee of the city to make known information obtained pursuant to this article concerning the business financial affairs or operations of any person.
(b) The city council may authorize an examination of any return or audit of a specific taxpayer made pursuant to this article by authorized agents of the federal government, the State of Arizona, or any political subdivisions.
(c) The tax collector may provide to an Arizona county, city, or town any information concerning any taxes imposed in this article relative to the taxing ordinances of that county, city, or town.
(d) Successors, receivers, trustees, personal representatives, executors, guardians, administrators, and assignees, if directly interested, may be given information by the tax collector as to the items included in the measure and amounts of any unpaid tax, interest, and penalties required to be paid.
(e) Upon a written direction by the city attorney or other legal advisor to the city designated by the city council, officials or employees of the city may divulge the amount and source of income, profits, leases, or expenditures disclosed in any return or report, and the amount of such delinquent and unpaid tax, penalty, or interest, to a private collection agency having a written collection agreement with the city.
(f) The tax collector shall provide information to appropriate representatives of any Arizona city or town to comply with the provisions of A.R.S. Section 42-6003, A.R.S. Section 42-6005, and A.R.S. Section 42-6056.
(g) The tax collector may provide information to authorized agents of any other Arizona governmental agency involving the allocation of taxes imposed by section 19-435 upon publishing and distribution of periodicals.
(h) The tax collector may provide information regarding the enforcement and collection of taxes imposed by this article to any governmental agency with which the city has an agreement.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 9569, § 1, 6-18-01)
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