Arizona Sales Tax Filing Changes, January 2015
- Mar 5, 2014 | Gail Cole
Beginning January 1, 2015, it will be simpler for businesses to file Arizona’s transaction privilege tax (TPT). That’s because the Arizona Department of Revenue will become the single point of administration and collection for Arizona state and local TPT.
Currently, 18 cities in Arizona administer their own taxes and the Arizona Department of Revenue administers TPT for the state’s remaining 73 cities. This situation has the potential to create a tax filing nightmare for anyone doing business in multiple Arizona cities. For example, a retailer selling into 10 program cities (administered by the department) and all 18 self-administering cities could have to file at least 19 different returns per quarter. Yikes.
Governor Jan Brewer (R) and other lawmakers recognized the need to simplify Arizona’s tax system, which is considered by many to be one of the country’s most complex. The Transaction Privilege Tax Simplification Task Force was created in 2012 to study the issue and brainstorm ideas. HB 211 grew out of the task force’s recommendations.
Enacted last year, HB 211 simplifies “the administration of Arizona’s transaction privilege tax in order to alleviate taxpayer confusion, relieve businesses from unnecessary compliance costs and to improve, at both the state and local level, the coordination of the revenue collection and audit function through the implementation of a single, unified, collection and audit system, thereby increasing voluntary compliance.”
Although HB 211 does not require remote sellers without nexus (the connection that triggers a tax collection responsibility) to collect and remit in the state, it will make filing significantly simpler for all filers. And should the federal government pass an online sales tax law such as the Marketplace Fairness Act of 2013 (which would allow states with simplified sales tax regulations to require certain remote retailers to collect and remit sales tax), Arizona will be well-positioned to take advantage of it. The Marketplace Fairness Act of 2013 was approved by the Senate in May 2013 and is slotted for a hearing in the House Judiciary Committee as soon as weather permits.
Transaction privilege tax simplification begins January 1, 2015. Mark your calendars.