Assigned to FIN AS PASSED BY COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
AMENDED
FACT SHEET FOR S.B. 1372
TPT; exemptions; motor vehicles; nonresidents
Purpose
Expands the transaction privilege tax (TPT) exemption and the municipal tax prohibition
on sales of motor vehicles to nonresidents of Arizona for use outside of Arizona to include the sale
of commercial motor vehicles that meet outlined criteria. Establishes a special five-day nonresident
permit (special five-day permit) for a nonresident who purchases an unregistered vehicle in
Arizona for removal to the purchaser's state of residence.
Background
The gross proceeds of sales or gross income derived from sales of motor vehicles to
nonresidents of Arizona for use outside of Arizona, if the motor vehicle dealer ships or delivers
the motor vehicle to a destination outside of Arizona, is exempt from the TPT imposed on the retail
classification (A.R.S. § 42-5061).
A city, town or special taxing district may not levy TPT or a sales, use or other similar tax
on the sales of motor vehicles to nonresidents of Arizona that are shipped or delivered by a motor
vehicle dealer for use outside of Arizona (A.R.S. § 42-6004).
A nonresident who purchases an unregistered vehicle in Arizona for removal to the
purchaser's state of residence must obtain a special 90-day nonresident registration permit. The
nonresident must obtain the 90-day nonresident registration permit by applying to the Arizona
Department of Transportation (ADOT) or a motor vehicle dealer and paying the necessary fees.
An affidavit must accompany the application and must contain a statement that: 1) the purchaser
is not a resident of Arizona; 2) the vehicle is purchased to be registered out of state within 90 days
after the issuance of the special 90-day nonresident registration permit; and 3) the vehicle is not
purchased for transfer to a resident of Arizona (A.R.S. § 28-2154).
A commercial motor vehicle is a motor vehicle or combination of motor vehicles designed,
used or maintained to transport passengers or property for a commercial enterprise that is not
exempt from statutory gross weight fees and that includes any of the following: 1) a single vehicle
or combination of vehicles with a gross weight of more than 26,000 pounds that is used for
intrastate commerce; 2) a single vehicle or combination of vehicles with a gross weight of more
than 10,000 pounds that is used for interstate commerce; 3) a school bus; 4) a bus; 5) a vehicle
designed to transport 8 or more passengers for hire; and 6) a vehicle used to transport hazardous
materials (A.R.S § 28-5201).
If the TPT exemption for motor vehicle sales to nonresidents for use outside the state results
in a decrease in TPT collections, there may be a corresponding fiscal impact to the state General
Fund. FACT SHEET – Amended
S.B. 1372
Page 2
Provisions
1. Expands the TPT exemption and the municipal tax prohibition on sales of motor vehicles to
nonresidents of Arizona for use outside of Arizona to include a commercial motor vehicle that
is a vehicle, trailer or semitrailer with a gross weight of more than 10,000 pounds that is used
or maintained to transport passengers or property for commercial enterprise.
2. Establishes a special five-day permit for a nonresident who purchases an unregistered vehicle
in Arizona for removal to the purchaser's state of residence.
3. Allows the special five-day permit to be issued in circumstances for which a 90-day
nonresident registration permit may be issued.
4. Allows ADOT to establish a fee by rule for each special five-day permit.
5. Applies the modified TPT exemption and municipal tax prohibition to taxable periods
beginning the first day of the month following the general effective date.
6. Contains a technical conditional enactment.
7. Makes technical changes.
8. Becomes effective on the general effective date or later, subject to the provisions of the
conditional enactment.
Amendments Adopted by Committee
• Removes the TPT exemption and the municipal tax prohibition for an automobile or truck that
is sold to a nonresident by a manufacturer or motor vehicle dealer in Arizona.
Senate Action
FIN 2/16/22 DPA 8-2-0
Prepared by Senate Research
February 17, 2022
MG/AN/slp