Arizona Eliminates Annual Renewals for Certain Nonprofit Sales Tax Exemptions

Effective 91 days after the close of the current legislative session, Arizona nonprofit organizations that qualify for exemptions to the state’s Transaction Privilege Tax will no longer be required to annually re-certify their exempt status. In Arizona, limited exemptions from Transaction Privilege Tax are available for community health centers, qualifying health care organizations, qualifying hospitals, and organizations with education programs for mentally and physically handicapped persons, and can only be claimed by these organizations once they have received a letter of exemption from the department. These exemptions have historically been valid for a 12 month period, but now will be valid until the organization informs the department they no longer qualify. The new law also holds organizations liable for any tax due if they fail to inform the Department of Revenue that they no longer qualify.

(Arizona S.B. 1230)

Posted on April 25, 2023