Assigned to FIN                                                                                               FOR CAUCUS & FLOOR ACTION

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

REVISED

FACT SHEET FOR H.B. 2457

 

sales tax; contractor’s solar exemption

 

 

Purpose

 

Exempts, from the transaction privilege tax (TPT), the gross proceeds of sales or gross income derived from contracts to provide solar energy devices. Clarifies the deduction cap applies to the contract rather than each solar energy device.

 

Background

 

In 1991, the Arizona State Legislature enacted two TPT exemptions applicable to solar energy devices. One was for the sale 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. When the exemptions were added, both exemptions were set to expire on December 31, 1996. However, the expiration of the TPT exemption under the retail classification has since been eliminated. In 2000, the Legislature reauthorized the TPT exemption for prime contractors and made the exemption applicable retroactively to January 1, 1997 (Laws 2000, Chapter 217). This exemption is set to expire on January 1, 2011.

 

H.B. 2457 provides a TPT exemption for the gross proceeds of sales or gross income derived from contracts to provide and install solar energy devices. This bill also clarifies the deduction cap applies to the contract rather than each solar energy device.

 

According to Joint Legislative Budget Committee staff estimates, this legislation will increase General Fund revenues by $21,500 in FY 2003-2004 and by $43,000 in FY 2004-2005 and thereafter.

 

Provisions

 

1.      Exempts, from TPT, the gross proceeds of sales or gross income derived from contracts to provide and install solar energy devices.

 

2.      Clarifies that the $5,000 deduction cap applies to the contract instead of each solar energy device.

 

3.      Provides for a general effective date.

 

 

 

 

 

 

Amendments Adopted by Committee

 

1.      Delays, from December 31, 2003 to January 1, 2011, the sunset of the TPT exemption for the gross proceeds of sales or gross income derived from contracts to provide and install solar energy devices.

 

2.      Removes the Proposition 108 clause.

 

House Action                                                              Senate Action

 

EUT                 1/30/02            DPA        9-0-0-1        FIN                  4/15/02     DPA     6-1-1-0

WM                 3/28/02            DPA        9-0-0-1

3rd Read             4/8/02                        46-4-10-0

 

 

Prepared by Senate Staff

April 16, 2002