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The Federation of Tax Administrators and the Multistate Tax Commission may receive confidential taxpayer information attained by the Arizona Department of Revenue as part of an information exchange for tax administration reasons. The Department of Revenue can also release information to the U.S. Treasury Department for use in the state income tax levy program and in the electronic federal tax payment system. Furthermore, under specified situations, confidential material may be disclosed in a state or federal judicial or administrative proceeding. Further regulations do apply. (Ch. 18, H.B. 2008, Laws 2006)


Under the Arizona job printing classification, sales of printing, engraving, embossing, or copying to a qualified motion picture production company for use in motion picture production are exempt. To be eligible for this deduction, at the time of sale, the motion picture production company must give the job printer its certificate that is issued pursuant to section 42-5009, subsection H, and that establishes its qualifications for the deduction. Additional provisions regarding the qualifications for motion picture tax incentives apply. (S.B, 1367, Laws 2006)


The Director’s review upheld an earlier decision that separately-stated photographer’s fees were subject to the state’s transaction privilege tax. Specifically, the photographer did not qualify for a “service in addition to a retail sale” exemption as the services provided by the photographer (site visits, set-up, taking photographs, rush processing) were activities that helped create the photographs for sale, not a “service in addition to a sale”. The Director stated that the dominant purpose of a photographer was to sell photographs which qualify as tangible personal property. The photographer also did not meet the requirements to qualify for a “service occupation or business” exemption as its business does not require a state sanctioned or issued license. (Case No. 200500067S-REV, July 17, 2006)


Under Arizona’s job printing classification, postage and freight are exempt from transaction privilege tax. The taxpayer must separately document the postage and freight on the purchaser’s invoice and in the taxpayer’s records to qualify for the exemption. In addition, sales of both postage and freight cannot exceed the actual postage and freight rate that is paid to the United States Postal Service or a commercial delivery service. (H.B. 2089)


The Department of Revenue has amended a regulation to clarify the taxability of sales of computer hardware or software. The modification clarifies that (1) gross receipts derived from changes of prewritten software for the specific use of an individual customer are not subject to tax if separately stated on the sales invoice and in the seller 's records; and (2) the method used to sell prewritten computer software to customers is irrelevant for taxation purposes. Some methods used to sell include using a tangible object such as a computer disk, CD-ROM, or through digital means (Arizona Regulation, R 15-5-154, amended September 10, 2005).



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