State Tax Commission v. Peck

In State Tax Commission v. Peck, 106 Ariz. 394, 395, 476 P.2d 849, 850 (1970) the Arizona Supreme Court interpreted the terms "leasing" and "renting" to determine whether TPT applied to income derived from a self-service laundromat and a self-service car wash. The court relied upon the following definition of "to rent" from Webster's Third International Dictionary: "'(1) to take and hold under an agreement to pay rent,' or ' (2) to obtain the possession and use of a place or article for rent.'" Id. at 396, 476 P.2d at 851. In Peck, the court applied a statutory predecessor to 42-5071, which also assessed a tax on the activity of "leasing or renting tangible personal property for a consideration." Peck, 106 Ariz. at 395, 476 P.2d at 850. Applying this definition, the court in Peck concluded that both the laundromat and the car wash were in the business of renting tangible personal property and therefore subject to TPT. Peck, 106 Ariz. at 396, 476 P.2d at 851. Notably, the court reasoned that: There is no question that when customers use the equipment on the premises of the plaintiffs herein, such customers have an exclusive use of the equipment for a fixed period of time and for payment of a fixed amount of money. It is also true that the customers themselves exclusively control all manual operations necessary to run the machines. In our view such exclusive use and control comes within the meaning of the term 'renting' as used in the statute. Id.