AZ HB2587

Amends Arizona Revised Statutes Section 42-5061 to add a new provision (subsection Q) requiring that when tangible personal property is transferred to a customer as an inducement to enter into or continue a service contract, without the option of purchasing the property separately, the tax base includes gross proceeds from both the tangible property sale and the service contract sale.

Clarifies that the retail transaction privilege tax applies to bundled sales of merchandise and service contracts where the property cannot be purchased independently from the service contract.

Does not create new exemptions but rather ensures proper taxation of service contract bundled merchandise that was previously potentially subject to unclear treatment.