Arizona – Court Of Appeals Case, Billboard Advertising Sales Exempt From TPT

Salt Report 3681– On July 16, 2015 the Arizona Court of Appeals filed a ruling that sales of billboard advertising were exempt from the transaction privilege tax.  As the result of an audit the Department of Revenue took the position that the sale of advertising on billboards fell within the scope of ARS 42-5071(A) as a lease or rental of tangible personal property.  The taxpayer disputed the determination arguing that sufficient possession and control had not been transferred to their customers in order to constitute a rental.  The key issue revolved around whether the customers of taxpayer had sufficient “possession and control” of the billboards in order to conclude a rental of TPP occurred.  The court agreed with the taxpayer that sufficient control of the billboards was not transferred and therefor a rental did not occur.  At present Arizona does not impose TPT on advertising and therefor no tax was due.  Judgment for the plaintiff.

Further Information:

No. 1 CA-TX 14-0006