Ariz. Admin. Code § 15-5-905

Current through Register Vol. 30, No. 24, June 14, 2024

Section R15-5-905 - Products Shipped Out of Arizona

A. A person engaged in the business of mining that ships a nonmetalliferous mineral product out-of-state without making a sale in Arizona shall include in the tax base the market value of the nonmetalliferous mineral product before it enters interstate commerce.

B. Unless otherwise provided in subsection (D), the taxpayer shall calculate the market value of a nonmetalliferous mineral product shipped out-of-state in the following manner:

1. Establish the total selling price of the product outside Arizona.

2. Deduct, from the total selling price, costs incurred out-of-state that increase the value of the product. These costs include:

a. The cost of actual freight paid, as provided in R15-5-908, to the point of sale outside Arizona;

b. The refining or processing cost incurred before the first sale; and

c. The cost of sales commissions, paid or accrued, in connection with the sale.

C. The market value of the product shipped out-of-state shall not include the cost of processing if the processor has paid the Arizona transaction privilege tax on the gross proceeds of sales or gross income derived from the processing. (See R15-5-904.)

D. A taxpayer may compute the market value of a nonmetalliferous mineral product shipped out-of-state in any manner that accurately reflects the value of the nonmetalliferous mineral product at the point it enters interstate commerce if the taxpayer gives prior written notification to the Department and the Department approves the computation method.

Ariz. Admin. Code § R15-5-905

Amended effective March 18, 1981 (Supp. 81-2). Amended effective June 18, 1987 (Supp. 87-2). Amended by final rulemaking at 6 A.A.R. 2952, effective July 18, 2000 (Supp. 00-3).