The State of Arizona and its Cities and Towns continue to work together to achieve the goal of simplifying the manner in which taxpayers report and pay their Transaction Privilege Tax (TPT). We want to ensure that there is a smooth transition in reporting and paying all TPT transactions. Working toward this end, the Arizona Department of Revenue is requiring all State TPT taxpayers to renew their licenses with the Department and continue to renew their licenses with the appropriate City.
Both the State and the Cities are committed to making this transition as easy as possible. We are confident these changes will make it easier for Arizona businesses to report their State, County and City TPT taxes. When you receive a form from the State and/or City, please read the instructions for completing the form(s), and submit all forms to the proper taxing jurisdiction by the due date indicated. It is very important that you return the completed form and payment, if applicable, to the correct entity for handling and processing. We thank you for helping us to make “TPT Simplification” a success.
You will continue to file your transaction privilege taxes to the state and municipalities as you are today. Non-program cities will administer their own renewals, licensing and payments through 2015. Beginning January 1, 2016, the Arizona Department of Revenue will become the single point of administration and collection of State, county and municipal transaction privilege tax.
Every business licensed with the Arizona Department of Revenue is required to renew their Arizona transaction privilege tax license. The license is valid for one calendar year and must be renewed annually. The renewal is due January 1, 2015. There is no State renewal fee. You must complete and submit this form to the Arizona Department of Revenue even if you do not have any changes.
Certain changes to a Transaction Privilege Tax (TPT) license are subject to a fee of $12 per location for the State license and any applicable City license fees. The following changes are subject to the $12 State license fee and any city:
- Business name or DBA change
- Business location address change
- Addition of reporting jurisdictions
- Additional business or rental locations
In addition to the Arizona renewal form, you may receive a separate renewal notice if you have a city license in the following cities: Apache Junction, Avondale, Bullhead City, Chandler, Douglas, Flagstaﬀ, Glendale, Mesa, Nogales, Peoria, Phoenix, Prescott, Scottsdale, Sedona, Somerton, Tempe, Tucson, and Willcox. It is important that you complete and return all city renewal forms and payment(s) specific to your business to the appropriate entities.
Your renewal notice will be sent separately within the next month. If you do not receive your notice by December 31, 2014, please call 602-542-5027. It may take up to forty five days to process your renewal.
Prime Contracting Changes
Effective January 1, 2015, nonconstruction, or service contactors, are exempted from prime contracting on both the state and city levels.
Sales of materials to “service contractors” are subject to tax if:
1. The contractor works directly for property owner, and
2. Does maintenance, repair, replacement or alteration of existing property
All other contracting activity remains taxable under the current statutes..
Contractors are not required to obtain TPT licenses if they solely perform contracts with either:
a) the owners of real property or
b) the owners of the improvements to real property
for the maintenance, repair, replacement or alteration of existing property.
Filing Frequency Changes
Effective January 1, 2015, if your annual transaction privilege tax liability is less than $2,000, you may file and pay annually; if your annual transaction privilege tax liability is between $2,000 and $8,000, you may file and pay quarterly. Otherwise, your transaction privilege taxes are due monthly. Please contact the Department if you would like to change your filing frequency.
Due Date Changes
Effective January 1, 2015, for all taxpayers who elect not to file electronically, TPT returns must be received by the Department on or before the second to last business day of the month. This includes returns filed by mail or hand delivered to the Arizona Department of Revenue.
Single source audits will become effective January 1, 2015. This means an audit will be conducted by state trained staff and will include any cities in which you conduct business.
Standardized Business Codes
Beginning January 1, 2015, there will be one list of business codes for the State/county and cities. For example, if you currently file retail at the state/county level (business class 017), you will file business code 017 for the city in which you conduct business in. The standard list will be available at www.azdor.gov.
Standardized Deduction Codes
Beginning January 1, 2015, there will be one list of deduction codes for the State/county and cities. You may no longer use deduction codes 888 or 999. Use of these codes will be disallowed and penalties and interest may apply. The standardized list will be available at www.azdor.gov.
Other things to look for in the upcoming months
- Geo Coding “look up” functionality by January 1, 2015
- Bulk filing by jurisdiction by January 1, 2015
- New joint tax application (JT-1) with geo coding: July 1, 2015
- Enhanced AZTaxes.gov e-file system: October 1, 2015
- New TPT-1 for filing monthly TPT returns which will allow taxpayers to report data by business location: October 1, 2015
- Bulk filing capabilities for taxpayers to file by business location: October 1, 2015
- Location-based reporting: October 1, 2015
- An electronic license renewal process for all taxpayers, including non-program city taxpayers between October and December, 2015