So if I downloaded from my iPad to my iPhone through iTunes sync is that considered a purchase? It was through that iCloud button?

iCloud button is used to re-download already purchased items

iPad > iCloud or iTunes > iPhone = Transfer

There is no syncing from one iDevice to another.

All syncing is done via iTunes on the computer as all the users content should exist there.

As already stated, content can be downloaded directly to any of the users devices via iCloud. This is not syncing.