42-5072. Mining classification;
definition
A. The mining classification is comprised of the business of mining, quarrying or
producing for sale, profit or commercial use any nonmetalliferous mineral product that
has been mined, quarried or otherwise extracted within the boundaries of this state
described in article I, section 1, Constitution of Arizona.
B. The tax base for the mining classification is the gross proceeds of sales or
gross income derived from the business. The gross proceeds of sales or gross income
derived from sales described under section 42-5061, subsection A, paragraph 27 and
subsection J, paragraph 2 shall be deducted from the tax base.
C. The tax base includes the value of the entire product mined, quarried or
produced for sale, profit or commercial use in this state, regardless of the place of
sale of the product or of the fact that deliveries may be made to points without this
state. If, however, the sale price of the product includes freight, the sale price shall
be reduced by the actual freight paid by any person from the place of production to the
place of delivery.
D. In the case of a person engaged in business classified under the mining
classification all or part of whose income is derived from service or manufacturing
charges instead of from sales of the products manufactured or handled, the tax base
includes the gross income of the person derived from the service or manufacturing charge.
E. If a person engaging in business classified under the mining classification
ships or transports all or part of a product out of this state without making sale of the
product or ships his product outside of this state in an unfinished condition, the value
of the product or article in the condition or form in which it existed when transported
out of this state and before it enters interstate commerce is included in the tax base,
and the department shall prescribe equitable and uniform rules for ascertaining that
value. In determining the tax base, if the product or any part of the product has been
processed in this state and the proceeds of such processing have been included in the tax
base of the processor under this chapter, the person may deduct from the value of the
product when transported out of this state the cost of such processing.
F. A person who conducts a business classified under the mining classification may
be deemed also to be engaged in business classified under the retail classification to
the extent the person's activities comprise business under the retail classification if
the tax is paid at the rate imposed on the retail classification by section 42-5010. If
the transaction is not subject to taxation under the retail classification, the
transaction shall be included in the tax base under this section.
G. For the purposes of this section, "nonmetalliferous mineral product" means oil,
natural gas, limestone, sand, gravel or any other nonmetalliferous mineral product,
compound or combination of nonmetalliferous mineral products.
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