Arizona Introduces Certification Process for Third-Party Service Providers in TPP Transaction Sourcing

On April 10, 2024, Arizona’s Governor signed H.B. 2382, establishing a new certification process for third-party service providers that assist with transaction privilege tax (TPT) sourcing. This law, effective by January 1, 2026, requires the Arizona Department of Revenue to create a voluntary certification program for these providers. Certified third-party service providers will help taxpayers accurately source transactions involving tangible personal property (TPP).

Under the new legislation, taxpayers using certified third-party service providers for TPP transactions will not be held liable for tax payment errors due to sourcing mistakes. Instead, the certified service provider will be responsible for the unpaid tax amount unless the error resulted from incorrect information provided by the Department.

The Department of Revenue will oversee and regulate the certification process, ensuring compliance through standards and a quality assurance program. Additionally, a list of certified third-party service providers will be available on the Department’s website. (Arizona  H.B. 2382, effective January 1, 2026)

Posted on May 28, 2024