AZ SB1505

Amends Arizona tax law to clarify that gas transportation services are subject to transaction privilege tax, reversing previous exemptions for utilities that transport natural gas purchased from third-party suppliers.

Modifies section 42-5063 to specify that the manufacturing/smelting business exemption from utilities classification tax "applies" rather than "does not apply" to gas transportation services.

Updates section 42-5159 to apply the same gas transportation services tax treatment to use tax, ensuring consistent taxation across different tax provisions.

Clarifies section 42-6012 regarding municipal taxation of natural gas delivery, requiring cities and towns to either tax or fully exempt gas transportation services in the same manner as other utility sales.

Effective upon signature; bill was approved by the Governor on May 19, 2016.