City of Phoenix v. Arizona Rent-A-Car Systems, Inc.

OPINION

NOYES, Judge.

The tax court granted summary judgment to Appellee Arizona Rent-A-Car Systems, Inc. (“Budget”), holding that refueling charges paid by customers who returned cars with less than full gas tanks were not taxable as gross income from Budget’s car rental business. We conclude that refueling charges are an integral part of Budget’s car rental business, and therefore taxable as gross income from that business. We reverse the tax court, vacate its opinion, and remand with directions to enter judgment in favor of the City.

The City of Phoenix audited Budget for the period April…