Glossary · Institutions & Instruments
Model City Tax Code
In short
The shared rulebook Arizona cities use for their own privilege tax. Near-uniform across cities, but each city chooses among optional provisions, so treatment still varies.
In full
Arizona cities levy their own privilege tax on top of state and county tax. Rather than each city writing its own code, they work from a shared model. The wording is mostly the same city to city, but cities pick and choose optional provisions, so what is taxable in one city may not be in the next.
The MCTC is adopted by Arizona cities and towns. ADOR maintains the official copy and publishes amendments once the Municipal Tax Code Commission approves them. The Commission also resolves disputes between cities over which one is entitled to a tax. Model Options and Local Options are the variable provisions, published with a chart of which city adopted what.
Two contracting classifications exist only here, with no state or county counterpart: Speculative Builder at § 416 and Owner-Builder at § 417. The deduction for the fair market value of land, reported under deduction code 734, is available only in cities that adopted Local Option #N, which replaces § 416(b)(2) — a concrete case of why the city matters.
A.R.S. §§ 42-6001, 42-6003, 42-6052; MCTC §§ 416, 417 and Local Option #N; ADOR Speculative Builder page