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a. The tax rate shall be at an amount equal to two and three-tenths percent of the gross income from the business activity upon every person engaging or continuing in the business of selling tangible personal property at retail.

b. The burden of proving that a sale of tangible personal property is not a taxable retail sale shall be upon the person who made the sale.

c. Exclusions. For the purposes of this chapter, sales of tangible personal property shall not include:

1. sales of stocks, bonds, options, or other similar materials.

2. sales of lottery tickets or shares pursuant to Article 1, Chapter 5.1, Title 5, Arizona Revised Statutes.

3. sales of platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by regulation.

4. gross income derived from the transfer of tangible personal property which is specifically included as the gross income of a business activity upon which another section of this article imposes a tax, shall be considered gross income of that business activity, and are not includable as gross income subject to the tax imposed by this section.

5. sales by professional or personal service occupations where such sales are inconsequential elements of the service provided.

6. sales of cash equivalents. The gross proceeds of sales or gross income derived from the redemption of any cash equivalent by the holder as a means of payment for goods or services that are taxable under this article is subject to the tax. Cash equivalents means items or intangibles, whether or not negotiable, that are sold to one or more persons, through which a value denominated in money is purchased in advance and may be redeemed in full or in part for tangible personal property, intangibles or services. Cash equivalents include gift cards, stored value cards, gift certificates, vouchers, traveler’s checks, money orders or other instruments, orders or electronic mechanisms, such as an electronic code, personal identification number or digital payment mechanism, or any other prepaid intangible right to acquire tangible personal property, intangibles or services in the future, whether from the seller of the cash equivalent or from another person. Cash equivalents do not include either of the following:

A. Items or intangibles that are sold to one or more persons, through which a value is not denominated in money.

B. Prepaid calling cards or prepaid authorization numbers for telecommunications services made taxable by subsection (g) of this section.

d. Notwithstanding the provisions of subsection (a) above, when the gross income from the sale of a single item of tangible personal property exceeds ten thousand dollars ($10,000.00), the two and three-tenths percent (2.3%) tax rate shall apply to the first $10,000.00. For the amount greater than $10,000.00, the measure of tax shall be at a rate of two percent (2%).

e. When this City and another Arizona city or town with an equivalent excise tax could claim nexus for taxing a retail sale, the city or town where the permanent business location of the seller at which the order was received shall be deemed to have precedence, and for the purposes of this chapter such city or town has sole and exclusive right to such tax.

f. The appropriate tax liability for any retail sale where the order is received at a permanent business location of the seller located in this City or in an Arizona city or town that levies an equivalent excise tax shall be at the tax rate of the city or town of such seller’s location.

g. Retail sales of prepaid calling cards or prepaid authorization numbers for telecommunications services, including sales of reauthorization of a prepaid card or authorization number, are subject to tax under this section. (Ord. No. G-2976, § 5; Ord. No. G-3696, § 13; Ord. No. G-3969, § 6, 1996; Ord. No. G-4200, § 14, 1999; Ord. No. G-4214, § 8, 1999; Ord. No. G-4254, § 14, 2000; Ord. No. G-4987, §§ 14, 17(2), 18, 2007; Ord. No. G-5849, 2013; Ord. No. G-6073, 2015)

Note—With respect to activities under Section 14-460, the effective date shall be the date of delivery (or return) of the tangible personal property involved to the purchaser or customer.

*Code reviser’s note: Section 17 of Ordinance No. G-6073 provides: "The threshold amount of $10,000.00 as provided for in Section 14 (Phoenix City Code Section 14-460(d)) and Section 16 (Phoenix City Code Section 14-610(e)) shall be adjusted for inflation on a biennial basis starting on January 1, 2018 and continuing until the tax expires by using the Phoenix Area Consumer Price Index for the two prior fiscal years as determined by the Center for Business research at Arizona State University, or if this index is not available, the Consumer Price Index of the Department of Labor."