Bodco Bldg. Corp. v. Arizona State Tax Comm'n

In Bodco Bldg. Corp. v. Arizona State Tax Comm'n, 5 Ariz. App. 589, 429 P.2d 476 (1967), the Court determined that a bank's wholly-owned subsidiary engaged in the "business of office buildings," as defined by A.R.S. section 42-1314(A)(2) (repealed), by leasing buildings to the bank to use as banking facilities and was therefore obligated to pay transaction privilege taxes on its rental income. 5 Ariz. App. at 590, 592, 429 P.2d at 477, 479. In its discussion, the court rejected the subsidiary's contention that the legislature only intended to tax rental income from buildings that contain multiple offices for rent to several tenants. Id. at 593, 429 P.2d at 480. Rather, the court focused on how the property was used and concluded that lessors of buildings used by a single tenant for offices could be taxed pursuant to former A.R.S. section 42-1314(A)(2). Id.