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
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.
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!