Centralized Licensing and Reporting of Arizona TPT Begins January 1, 2017

Effective January 1, 2017, the Arizona Department of Revenue (DOR) becomes the single point of administration and collection of transaction privilege tax (TPT). The transition to centralized licensing, reporting, and payment of state and city TPT to the DOR begins with the January 2017 tax return (due in February). When filing the January 2017 TPT return, all activity needs to be filed on a single return with the DOR regardless of where the taxable activity is located in Arizona. This results in a broadening of local nexus in Arizona since many cities previously were considered home rule authorities. Previously, businesses may have filed two or more TPT returns, one with the DOR and another with the city or cities where taxable activity occurred. If a business needs to file TPT returns but has an outstanding balance for tax periods prior to its January 2017 activity, those returns and payments must be filed and paid directly with the city where the business had taxable activity. To aid in the transition, the DOR has prepared deduction code bridges that link local codes with the standardized state codes. In addition, if your business previously used a TPT license number issued by a non-program city, that number will no longer be valid after December 31, 2016. Failure to renew the license may be subject to penalties. All fees are payable to ADOR using the license number issued by the department. The renewal fee is due at the time of renewal. The fees can be paid via AZTaxes.gov with e-check or ACH Debit if that option is already set up on the account. The effective date of Arizona’s TPT simplification had previously been delayed several times. For our previous news item, click here. (News Release, Arizona Department of Revenue, December 29, 2016)

Posted on January 3, 2017