City of Peoria, a Municipal Corporation; and City of Phoenix, a Municipal Corporation…

Summary

The court held that separate interstate telecommunications involved in home-security monitoring cannot be aggregated into an intrastate transmission loop merely because the overall process begins and ends in Arizona. It also rejected the cities’ argument that the governing municipal-tax exemption reaches only services defined as interstate under federal law. The court vacated the court of appeals’ decision and remanded for that court to determine whether the taxes are imposed on taxable monitoring services rather than on telecommunications services.