Arizona hasmodified the exemption criteria for the “qualified manufacturing or smelting business”exemption as it applies to the state’s transaction privilege and use tax deduction of electricity and natural gas sales. A “qualified manufacturing or smelting business” means a business that does one of the following:
The definition of manufacturing has also been modified to include processing or fabricating but it now excludes publishing and packaging.
Effective August 6, 2016, a vendor must accept a certificate establishing a deduction in good faith. If the purchaser cannot establish the accuracy and completeness of the information provided in the certificate, then the purchaser is liable for the transaction privilege tax that the vendor would have been required to pay if the vendor had not accepted the certificate.If however, the vendor has reason to believe that a certificate is not accurate or complete, the vendor will not be relieved of the burden of proving the exemption applies. (H.B. 2676, Laws 2016, effective January 1, 2017 unless otherwise specified)