House of Representatives

HB 2457

sales tax; contractor's solar exemption

Sponsors: Representatives Graf, Pierce, Kraft et al

DPA	Committee on Energy, Utilities and Technology
DPA	Committee on Ways and Means
DPA	Caucus and COW
X	Third Read	This bill as amended contains a PROP 108 clause.
	As Passed the House

HB 2457 clarifies the current Transaction Privilege Tax (TPT) exemption for the installation of solar devices by contractors.

Current Status

Amended in the Committee on Energy Utilities and Technology by changing the sunset date for the TPT exemption for solar contractors from January 1, 2011 to December 31, 2003. HB 2457 passed the Ways and Means Committee with the same amendment, with a Prop 108 clause. The Ways and Means amendment was adopted in the Committee of The Whole.

History

In 1991, the Arizona Legislature enacted two transaction privilege tax exemptions applicable to solar energy devices, one was for sales of such devices under the retail classification, and the other was for the contractor's cost of the device installed under the prime contracting classification. At the time the exemptions were added, they were set to expire on December 31, 1996. However, the exemption under the retail classification was later amended to delete the expiration clause.

Laws 2000, Chapter 214, reinserted the exemption for the contractor’s retail cost of the device, and made the exemption applicable retroactively to January 1, 1997, with a sunset date of January 1, 2011 (the law did not include an exemption for the cost of installation of the device). Thus, HB 2457 amends the existing prime contracting exemption for solar energy devices to clarify that, both the sale and installation of the solar energy device, limited to a $5,000 deduction per contract, is exempt from the transaction privilege tax under the prime contracting classification.

JLBC has prepared a fiscal note on this bill. The estimated state impact for FY 2004 is $24,500.

Provisions

· Clarifies the transaction privilege tax (TPT) exemption for the gross proceeds or gross income derived from a contract to provide and install a solar device.

· Makes technical and conforming changes.

Amendments

EUT Amendments

· Changes the sunset date for the TPT exemption for solar contractors from January 1, 2011 to December 31, 2003.

Ways and Means Amendments

· Changes the sunset date for the TPT exemption for solar contractors from January 1, 2011 to December 31, 2003.

Adds a Prop 108 clause

The Ways and Means amendment was adopted in the Committee of The Whole.

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45th Legislature

Second Regular Session 2 April 6, 2002

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