Transaction Privilege Tax changes starting January 1, 2015

There are big changes ahead for the transaction privilege tax (TPT) in Arizona that will become effective January 1, 2015.  Business owners will need to make adjustments to make sure they are properly reporting their TPT.

Under the current system, the State of Arizona is responsible for collecting TPT for 73 cities, while 18 other cities administer their own taxes.  This means that businesses are often required to file multiple returns if they do business in any of the cities not administered by the state.

In an effort to simplify the process, the Arizona Department of Revenue (DOR) will now be the single point- of-contact for TPT returns, payments, and audits starting January 1, 2015.  Along with this major change there are several other changes that business owners should be aware of:

– After January 1st, taxpayers will be able to file and pay on one form for all jurisdictions.

– There will be an upgraded website (AZTaxes,gov) that will allow all taxpayers to file and pay online (signature cards are no longer required to register on this website).

– If you file TPT for more than one location, the DOR will require you to e-file your TPT return rather than paper file.

– The DOR will be sending out annual renewal notices this fall.  If you conduct business in a city that has a renewal fee, you will now pay the DOR rather than the city.

– Penalties up to $25 may be incurred for not timely renewing a TPT license.

– Businesses with multiple locations or names that file a consolidated TPT return will only be required to pay one municipal renewal fee per jurisdiction.

– Business with multiple locations or names that do not file a consolidated TPT return will be required to pay the municipal renewal fee for each location within a jurisdiction.

– Due dates for TPT returns will change after January1, 2015 for any taxpayers who elect not to e-file,  The return and payment must now be received by the DOR on or before the second to last business day of the month.

– Filing frequencies may change for certain taxpayers with small tax liabilities.  The DOR will be sending out notices regarding this change.

Please contact our office if you have any questions pertaining to the new changes in the Transaction Privilege Tax.

Sincerely,

Sigrist, Cheek, Potter & Huyser, PLLC