HB 2447
Initials JB Page 1 Appropriations
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
HB 2447: TPT; exemption; motor vehicle manufacturers
Sponsor: Representative Martinez, LD 16
Committee on Appropriations
Overview
Permits a manufacturer or new dealer that is owned, operated or controlled by the manufacturer
or one of its affiliates or subsidiaries to issue a special 10-day non-resident registration permit for
non-residents purchasing an unregistered vehicle in this state to be taken out of the state.
Exempts the sale of motor vehicles to non-residents of this state by a manufacturer or new dealer
from the Transaction Privilege Tax (TPT), sales or other similar tax if the non-resident purchaser
has obtained a special 10-day non-resident registration permit.
History
A non-resident who purchases an unregistered vehicle in this state for removal from this state to
the purchaser's state of residence must obtain a special 90-day non-resident registration permit
for the vehicle. The non-resident will obtain the 90-day special permit by applying to the Arizona
Department of Transportation (ADOT), to an authorized third party or motor vehicle dealer. The
non-resident must pay a $15 fee for each special 90-day non-resident registration. An affidavit in
a form prescribed by the Director of ADOT must accompany the application and contain the
following statements:
1) the purchaser is not a resident of this state. The non-resident is required to present to
ADOT, the authorized third-party or vehicle dealer a driver's license or other evidence
prescribed by ADOT's director showing that the purchaser is not a resident of this state;
2) the vehicle is purchased to be registered out of the state within 90-days after the issuance
of the special permit;
3) the vehicle is not purchased for transfer to a resident of this state; and
4) other information the director of ADOT deems necessary.
At the time of application for a special 90-day non-resident registration permit, the non-resident
must submit proper evidence of ownership of the vehicle. The special 90-day non-resident
registration permit is only valid for 90 days from the date of issuance and will be in the form
prescribed by the Director of ADOT. (A.R.S. §§ 28-2003, 28-2154).
The sale of motor vehicles to non-residents of this state for use outside this state is exempt from
TPT, sales or another similar tax if:
1) the motor vehicle dealer ships or delivers the motor vehicle to a destination outside this
state; and
2) the vehicle, trailer or semitrailer has a gross vehicle weight of more than 10,000 pounds
and is used or maintained to transport property in the furtherance of interstate commerce
or otherwise meets the definition of commercial motor vehicle (A.R.S. § 42-6004)
A Joint Legislative Budget Committee (JLBC) fiscal note for this act estimates the loss of current
revenues to be minimal, since the primary Arizona-based manufacturer currently delivers its
vehicles to out-of-state purchasers, and those sales are already exempt from TPT. If the Arizona-
based manufacturer begins to permit the drive-outs allowed by the 10-day non-resident HB 2447
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registration permit, the JLBC estimates the state would incur a forgone revenue loss of between
$0 to $2.6 million.
Provisions
1. Allows a manufacturer or new dealer that is owned, operated or controlled by the manufacturer
or one of its affiliates or subsidiaries (new dealer) to issue a special 10-day non-resident
registration permit (Sec. 3)
2. Requires the manufacturer or new dealer to send an electronic record of a 10-day non-
resident registration permit to ADOT. (Sec. 3)
3. Restricts a manufacturer or new dealer from issuing a 10-day non-resident registration permit
unless the permit is recorded in ADOT's electronic records. (Sec. 3)
4. Exempts the sale of motor vehicles to non-residents of this state if the manufacturer or new
dealer ships or delivers the motor vehicle to a destination outside the state or the non-resident
purchaser has obtained a 10-day non-resident registration permit from the TPT, sales or other
similar tax. (Sec. 5)
5. Prohibits a manufacturer, new dealer or one of its affiliates from issuing, assigning or
delivering a 10-day non-resident registration permit to any person unless the person:
a) obtains the 10-day non-resident registration permit following requirements outlined in
statute;
b) completes the affidavit required to accompany the permit application in a form prescribed
by the director of ADOT or the form prescribed by the Department of Revenue (DOR) for
the certificate used to establish the satisfaction of the criteria necessary to qualify for the
sale of a motor vehicle;
c) presents a current valid driver's license issued by another state containing an address
outside of this state to the manufacturer or new dealer;
d) provides any other information reasonably and uniformly required by ADOT; and
e) for FY 24, issue not more than 500 10-day non-resident registration permits, the limit
increases by 10% each FY thereafter. (Sec. 3)
6. Directs the manufacturer or new dealer that issues a 10-day non-resident registration permit
to affix or insert on the face of each permit the dates of issuance and expiration and the make
and vehicle identification number of the vehicle. The permit is prohibited from having the name
or address of the person who purchased the vehicle in a position that is legible from outside
the vehicle. (Sec. 3)
7. Requires a manufacturer or new dealer that issues 10-day non-resident registration permits
to maintain a record in a form prescribed by the director of ADOT of all 10-day non-resident
registration permits issued by the manufacturer or new dealer and a record of other
information on the issuance of the permits that ADOT or DOR requires. (Sec. 3)
8. Stipulates that the manufacturer or new dealer must keep each record for at least three years
after the date of entry of the record (Sec. 3)
9. Instructs the manufacturer or new dealer to allow the directors of ADOT or DOR full and free
access to the records during regular business hours. (Sec. 3)
10. Specifies the electronic record is written notice of the removal of the vehicle from this state for
use in the purchaser's state of residence and relives the dealer or authorized third party of
liability. (Sec. 3)
11. States that if a purchaser registers the vehicle in this state 365 days after the issuance of the
10-day non-resident registration permits, the purchaser is liable in an amount equal to any HB 2447
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tax, penalty and interest that the dealer or authorized third party would have been required to
pay under applicable law. (sec. 3)
12. Requires a manufacturer or new dealer to inform the purchaser in writing the purchaser's
liability at the time the 10-day non-resident registration permit is issued. (Sec. 3)
13. Specifies subsequent registration or use of the vehicle in this state does not create a cause
of action against a dealer or authorized third party that complied with applicable law. (Sec. 3)
14. Directs ADOT and DOR to jointly develop and prescribe forms for the manufacturer or new
dealer and the purchaser to complete for the proper administration and enforcement of this
act. (Sec. 3)
15. States that compliance with this act allows delivery of the vehicle to a non-resident purchaser
in this state and retains the applicable deductions. (Sec. 3)
16. Permits a non-resident who purchases an unregistered vehicle in this state from the
manufacturer or new dealer to purchase a 10-day non-resident registration permit (Sec. 2)
17. Stipulates the non-resident must apply to the manufacturer or new dealer for a 10-day non-
resident registration permit. (Sec. 2)
18. Requires an affidavit accompanying the non-resident registration permit application to state
that the vehicle is purchased to be registered out of state within 10 days after the issuance of
the 10-day non-resident registration permit. (Sec. 2)
19. Outlines requirements for a 10-day non-resident permit application. (Sec. 2)
20. States a 10-day non-resident registration permit is valid for only 10 days from the date of
issuance and will be in a form prescribed by the director of ADOT. (Sec. 2)
21. Authorizes ADOT to establish a fee by rule for a 10-day non-resident registration permit. (Sec.
1)
22. States that sales of a motor vehicle if the manufacturer or new dealer ships or delivers the
motor vehicle to a destination outside the state or the non-resident purchaser has obtained a
10-day non-resident registration permit are not included in the TPT tax base. (Sec. 4)
23. States this act applies to taxable periods beginning on or after the first day of the month
following the general effective date. (Sec. 6
24. Makes technical and conforming changes. (Sec. 1, 4-5)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☒ Fiscal Note