Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Arizona.
April 21, 2025
Arizona Updates Agricultural Deduction on Equipment and Machinery
Authored by: Penny Sweeting, CPA and Ryan Schupp
Effective April 1, 2025, the Arizona Department of Revenue issued Ruling 25-1 updating the Transaction Privilege Tax (TPT) on agricultural machinery and equipment sales. Formerly, only new machinery and equipment would qualify for a gross income deduction. After April 1, 2025, gross income from the sale of agricultural equipment and machinery, both new and old, is deductible from the state’s retail sales tax. Furthermore, income from the lease or rental of agricultural equipment and machinery is deductible under the state’s personal property classification for state and county tax. The length of the lease or rental does not affect the deduction; previously, the lease or rental could be deducted if it was for at least two years.
If you have questions about transaction privilege tax, please reach out to a member of the Withum SALT Team.
November 25, 2024
Arizona Court Denies Tax Exemption for Linen Sanitization Equipment
Authored by: Courtney Easterday, MSA
On November 8, 2024, the Arizona Court of Appeals ruled against 9W Halo OPCO LLC (Angelica Textile Services) in a use tax dispute. Angelica argued that its machinery for sanitizing healthcare linens should be tax-exempt as a “processing operation.” The court disagreed, stating that Angelica’s definition was too broad and did not fit the common law definition of processing, which is defined as transforming raw materials. Consequently, the court upheld the denial of a use tax refund for the sanitization equipment.
If you have questions about sales tax exemptions, please reach out to a member of the Withum SALT Team.
Have Questions or Need Guidance?
For more information on this topic, please contact a member of our team.
Disclaimer: Please note that this information is readily available at this time and is subject to change, so please consult your Withum tax advisor.