Arizona –Transaction privilege tax exemption for corporate affiliate real property leases extended to non-corporate affiliates

June 2013

Overview

Effective September 13, 2013, H.B. 2324 provides that income from real property leases between two businesses with at least 80% common ownership is exempt from county privilege and municipal transaction privilege taxes. The new law expands the existing county and municipal exemption to affiliated companies, businesses, and persons. Arizona taxpayers, particularly REITs, with a significant amount of intercompany leases involving non-corporate entities should be aware that income from such leases may be exempt from these taxes.

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Peter Michalowski
National SALT Practice Leader
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