Arizona

Arizona

Standard rate: 

5.6% – 11.2%

Reduced rate:

Sales tax-free products and services:

Who is obliged to register sales tax:

When you sell in Arizona to Arizona purchasers you need to be registered in Arizona to collect and pay sales tax.

Threshold:

Starting October 1, 2019, remote dealers with sufficient physical or economic presence for establishing nexus in Arizona need to be registered to collect and pay sales tax in Arizona. This includes online sellers or remote sellers that have the $100,000 in annual Arizona gross sales.

Merchant thresholds by state

Marketplace thresholds by state

The special rules are applicable for the SAAS business.

Software as Service Tax Thresholds by state

Online Marketplaces:

If all your sales in Arizona come from online marketplaces, in this case you can’t register for paying sales tax in Arizona. Your marketplace promoter pays the sales tax itself.

Registration procedure:

You can register online on the Arizona Department of Revenue.

Sales tax payment and filing date: 

Depending on your tax liability, determine your filing frequency – either annual monthly or quarterly:

Annual – $0 to $2000
Quarterly – $2000 to 8000
Monthly – $8000 and up

Sales tax returns are always due to the 20th day of the month following the broadcasting period.  If the filing due date falls on a weekend or holiday, sales tax is due the next day. Quarterly filing periods end on the last days of January, April, July, October.

Penalty and interest:

Taxpayers who missed filing an electronic return will be subject to a fine of 5 percent of the tax amount due for filing a paper return. The minimum penalty is $25, including filings with zero obligation.

Taxpayers required to pay electronically will be subject to a penalty of 5 percent of the load of payment made by check or cash.

Taxpayers who file their tax return late will be subject to a late file penalty of 4.5 percent of the tax required to be shown on the return for each month, or fraction of a month, the return is late. There is a minimum of $25 and a maximum 25 percent of the tax due or $100, per return, whichever is bigger.

Exemption:

For certain business positions, transactions are not subject to TPT. The department has created exemption certificates to document non-taxable transactions. This establishes a ground for state and city tax deductions or exemptions. It is to be filled out fully by the purchaser and furnished to the vendor at the time of the sale.