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Arizona Internet Sales Tax and Retailers

  • Apr 5, 2012 | Susan McLain

The Arizona Senate recently shot down Senate Bill 1338 (SB 1338), an Internet sales tax and nexus bill, a few weeks ago. But now there is another Internet sales tax and nexus bill also stalled: Senate Bill 1170 (SB 1170).

SB 1170 started out as a “multimedia production incentives” bill and has since been modified to include wording regarding “presumption to obtain [transaction] privilege license.”

The bill states that a person is presumed to have “…sufficient Arizona business activity requiring a TPT License to assess and collect the appropriate tax, if any commonly controlled person maintains a distribution or fulfillment center, warehouse, office or similar location in-state that facilitates the delivery of merchandise sold by that person to consumers.”

The new wording also, “[a]pplies this new section of law the earlier of September 1, 2013 or the effective date of federal legislation that permits states to require sellers to collect sales taxes on goods and merchandise to in-state purchasers, regardless of the seller’s locations.”

Retailers in Arizona want the Governor “…to get involved in their quest to tax online sales.” They “…hope to breathe some life” into SB 1170 as they feel the “…current tax system is unfair to brick-and-mortar businesses.”

Shop owners seem to find themselves “…in the awkward position of serving as a showroom for people who later buy online, saving themselves the 6.6 percent sales tax and local sales taxes.” They provide instruction, product information and assistance but since customers say they are “just looking,” they leave the store without buying. Many retailers suspect the customer goes home and purchases the product they just demonstrated online.

The Arizona Retailers Association is calling for Governor “…Brewer to broker a deal that would levy sales tax on Amazon while waiving the $53 million tax bill the state sent the online retailer last year.” According to AZCentral.com, that is just what SB 1170 does.

Governor Brewer’s spokesperson, Matthew Benson says the Governor “…would like to see the federal government address [the situation].”

Despite the Governor’s conviction that the federal government should handle the matter, Michelle Ahlmer, executive director of the Arizona Retailers Association feels “…that more than half of states now tax online purchases and that Arizona needs to join the crowd. Retailers believe this will increase pressure on Congress to impose a national standard for online taxation.”

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”