AZ Sales Tax 101 States

Changes to Arizona Sales Tax Filing for 2015

by Mark Faggiano

Arizona Sales Tax

Earlier this year we wrote about the simplification of Arizona sales tax. (Note: Arizona calls their version of sales tax “transaction privilege tax.”) The changes would have made it simpler to register for a sales tax license in Arizona and simplify sales tax filing in the Grand Canyon State.

We say “would have,” though, because these simplifications have hit a snag.

According to a recent notice published by the Arizona Department of Revenue, “Due to the complexity in incorporating the City’s requirements into the Department’s information technology system, ADOR will not be the single point of licensing, filing and payment of all TPT on January 1, 2015, as originally planned.”

Let’s breakdown what this means for you as a seller.

No Simplified Arizona Sales Tax Filing (Yet)

As of now, the state of Arizona and 18 cities within the state all administer their own sales tax. For Amazon FBA sellers, this means registering for an Arizona sales tax permit as well as a permit from the city of Phoenix (due to the Amazon fulfillment centers located in Phoenix).

The new changes were supposed to simplify this process and allow sellers to only register at one central point – with the state of Arizona. But this couldn’t be accomplished in time. That said, 3 cities that formerly administered their own sales tax no longer do. If you formerly had a sales tax permit in these cities, you no longer have to treat them as separate and distinct as of January 1, 2015. These three cities are now part of the central Arizona system:

  • Bullhead City
  • Somerton
  • Wilcox

If you do business and have a permit in the other 15 cities, though, nothing changes for you yet. The state of Arizona hopes to bring all cities under their central system by January 1, 2016.

All Sales Tax Payers Must Renew Arizona Permits

If you’re registered in Arizona, you should have received a mailing in November asking you to renew all of your Arizona sales tax permits. This is a free process unless anything about your business has changed, such as:

  • A change to your business name or DBA
  • A change in your business location address
  • Adding reporting jurisdictions
  • Adding business or rental locations

Renewals are due on January 1st, 2015 and sales tax permits must be renewed by January 1st each year onward.

Arizona Sales Tax Filing Frequency Changes

Now for some better news. Starting in 2015, if your annual Arizona sales tax liability is less than $2,000 you can pay annually. If your sales tax liability is between $2,000 and $8,000 you may file and pay quarterly. To make the change, call the Taxpayer Information and Assistance unit at 602-255-2060 or toll free within Arizona at 1-800-843-7196 after January 1, 2015.

Arizona Sales Tax Due Date Changes

If you file by mail, your return must be received by your taxing authority on or before the last business day of the month. This is regardless of the postmark date, so be prepared.

Audit Changes

We hope you never have to deal with this one, but if you’re the subject of a sales tax audit, you will now be audited by state trained staff and an audit will cover all cities in Arizona in which you do business.

Fortunately, Arizona did outline a timeline for further simplification. We’ll keep you updated here as Arizona continues to make changes with the taxpayer in mind.

Do you have questions or comments about Arizona sales tax? Start the conversation in the comments!

  • EBH

    Have you guys heard any updates to this? I found this on the azdor website (https://www.azdor.gov/TPTSimplification/About.aspx):

    The Arizona Department of Revenue (ADOR) and Arizona’s Cities and
    Towns continue to work together to achieve the goal of simplifying the
    manner in which taxpayers report and pay their Transaction Privilege Tax
    (TPT). Due to the complexity in incorporating the City’s requirements
    into the Department’s information technology system, ADOR will not be
    the single point of licensing, filing and payment of all TPT on January
    1, 2016, as originally planned.

    For 2016, taxpayers will continue to file transaction privilege taxes to
    the state and most municipalities as they do today. Sedona will become a
    Program City as of January 1, 2016 (Program Cities
    are the cities for which the ADOR licenses and collects TPT). Taxpayers
    located in Sedona will report and pay their TPT to the State. The
    cities of Apache Junction, Avondale, Chandler, Douglas, Flagstaff,
    Glendale, Mesa, Nogales, Peoria, Phoenix, Prescott, Scottsdale, Tempe,
    and Tucson will continue to administer their own privilege taxes.

    • This is the same update we’ve seen. I’m hoping for a little more info before I write up a new blog post, but it looks like the simplification isn’t happening right now.

  • Pingback: Changes to Arizona Sales Tax for 2016()

  • Boone Family

    I’m also wondering if anything has changed as I try to navigate starting a business here in Flagstaff…. Any updates now that January 1, 2016 has come and gone?

    • Hi There,

      Unfortunately, Arizona again made the announcement that they would not be simplifying for the beginning of 2016: http://taxjar.wpengine.com/arizona-sales-tax-changes-2016/ Sorry to be the bearer of bad news on this one!

      • Boone Family

        NO problem. I’m not really surprised. 🙂

        • Neither were we. (Sadly!)

        • Neither were we. (Sadly!)

      • Boone Family

        NO problem. I’m not really surprised. 🙂

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