VATLive > Blog > US Sales Tax > US Arizona enacts remote seller tax and marketplace collections

US Arizona enacts remote seller tax and marketplace collections

Arizona is set to impose tax obligations on out-of-state sellers, plus marketplace facilitator collections duties. The new rules come into place 1 October 2019.

Remote sellers will be required to remite Arizona’s transaction privilege tax (TPT) for their sales to local consumer to the Arizona Department of Revenue. TPT is charged on the retailer, unlike sales taxes in other US states which are charged on the consumer.

There will be an initial annual sales registration threshold of $200,000, falling to $100,000 by 2021. Once over the threshold, the seller must apply for a TPT licence to start collecting the tax.

Marketplaces which help facilitate remote third-party sellers’ transactions in Arizona will be obliged to collect TPT if transactions on the marketplace are above $100,000 per annum. This includes the marketplace’s own transactions in addition to remotes sellers’ transactions on their platform.

Arizona is following the majority of US states in introducing out-of-state retailer and marketplace tax obligations following the 2018 Supreme Court Wayfair vs South Dakota ruling. This replaced the physical nexus benchmark to taxing with the economic nexus test – merely selling from another state will trigger taxing obligations.

Latest American news

US Wyoming marketplace sales tax collections

February 18, 2019

Wyoming is to require marketplaces to collect out-of-state Sellers’ sales tax from 1 July 2019. This is based on the 2019 South Dakota v Wayfair Supreme Court ruling, imposing ‘economic nexus’ sales tax liabilities on sellers not located in a state for the first time.

US New York implements Wayfair Sales Tax rule

January 16, 2019

The New York state tax department published on 15 January 2019 guidance on the immediate requirements for out-of-state sellers to register and charge Sales Tax.

US Texas Sales Tax economic nexus

January 3, 2019

Texas has become the latest US state to implement Sales Tax obligations on out-of-state (non-resident) merchants. This follows the 2018 South Dakota vs Wayfair Supreme Court ruling obliging remote sellers without a presence in a state to charge and remit local Sales Tax.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
VATlive newsletter

Sign up for our free newsletter stay up-to-date with the latest tax news.

VAT Voice

Sign-up to VAT Voice, Avalara’s monthly round-up about VAT and legislation updates to help you stay ahead of the curve.