Ariz. Rev. Stat. § 42-5067 – Pipeline classification

A. The pipeline classification is comprised of the business of operating pipelines for transporting oil or natural or artificial gas through pipes or conduits from one point to another point in this state. The pipeline classification does not include sales of natural gas or liquefied petroleum gas used to propel a motor vehicle.
B. The tax base for the pipeline classification is the gross proceeds of sales or gross income derived from the business, but the taxpayer shall deduct from the tax base the gross proceeds of sales or gross income derived from pipeline services to:
1. 1. Qualifying hospitals as defined in section 42-5001.
2. 2. A qualifying health care organization as defined in section 42-5001 if the oil or gas is used by the organization solely to provide health and medical related educational and charitable services.