What is TPT Simplification/HB 2111?
- Effective January 1, 2015, the Arizona Department of Revenue (DOR) will become the single point of administration and collection of State, county and municipal transaction privilege tax (TPT). Taxpayers will be able to file and pay on one form for all jurisdictions. There will also be an upgraded website (AZTaxes.gov) to file and pay your transaction privilege tax return.
Why do we need TPT simplification?
- Currently, the State of Arizona administers TPT for seventy-three cities, while eighteen Arizona cities separately administer their own taxes. That means business owners may need to file and pay the state then file another return and pay to a city the department does not collect for. Due to the enactment of HB 2111, there will now be one location to file and pay your return.
Who are the eighteen cities?
- Currently the following cities administer their own taxes: Apache Junction, Avondale, Bullhead City, Chandler, Douglas, Flagstaff, Glendale, Mesa, Nogales, Peoria, Phoenix, Prescott, Scottsdale, Sedona, Somerton, Tempe, Tucson, and Willcox. Effective January 1, 2015, the Arizona Department of Revenue (DOR) will become the single point of administration and collection of State, county and municipal transaction privilege tax (TPT) for these eighteen cities as well as the other 73 cities in Arizona.
Who is impacted?
- Business owners that file and pay transaction privilege taxes with DOR and any city in Arizona.
When does this start?
- The effective date of the bill is January 1, 2015. This means businesses who file their January 2015 TPT-1 in February 2015 will be reporting and paying TPT for all jurisdictions to the Department of Revenue only.
What changes will business owners expect?
HB 2389 changes which become effective January 1, 2015 include:
- Taxpayers who file for more than one location must e-file their tax return
- All taxpayers will receive an annual renewal notice this fall from DOR. If you conduct business in a city that has a renewal fee, you will pay DOR the renewal fee(s).
- TPT licenses will be valid for one calendar year. This means you will need to renew your license annually with DOR.
- If you do not renew your city TPT license timely, you may be penalized up to $25.
- If your business has multiple locations or under multiple names and files a consolidated tax return, you will be required to pay only one municipal TPT renewal fee for each jurisdiction.
- If your business operates in multiple locations or under multiple names and does not file a consolidated tax return, you will be required to pay a license renewal for each location in each jurisdiction.
- There will no longer be the e-signature document required when registering on AZTaxes.gov. This means you will no longer need to mail in a signature card when you register for AZTaxes.gov.
HB 2283 changes the due date on TPT returns starting after 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.
HB 2288 changes the filing frequency threshold. Taxpayers with small liabilities may be able to file less often. You will receive a notice from the Department regarding the details. Please wait for the notice before adjusting your filing frequency.
Other things to look for in the coming months:
- New TPT-1
- New Streamlined Joint Tax Application
- Improved AZTaxes.gov for electronic filing
Governor’s TPT Simplification Task Force page