Linen Sanitizing Machinery Is Tax-Exempt, Arizona Justices Rule

Equipment for sanitizing linens for health-care settings falls under an Arizona use tax exemption even if the company also leases those clean linens, the state high court ruled Tuesday.

“Here, because the industrial healthcare textile laundry facility changes the marketability of the textiles it markets, it qualifies” for the exemption, Justice John R. Lopez IV wrote for the unanimous court.

The ruling provides an analytical framework for defining “processing operation” in the text of the exemption statute, and “refocuses the scope of the exemption inquiry on the processing operation rather than the entire business,” the justices said.

The Arizona high ...