State Transaction Privilege Tax Reforms Begin in July

ADORPHOENIX – Businesses filing and paying transaction privilege tax (TPT) in Arizona have new procedures to follow beginning July 1, 2016, according to the Arizona Department of Revenue.

Required by law, the new procedures are aimed at simplifying how businesses report and pay TPT and by the end of 2016 will help to establish the department as a single point of contact for all TPT transactions in the state.

“Traditionally, the Department of Revenue has administered TPT for the counties and all but a few cities that have chosen to administer their own TPT programs. By this fall, the department will administer TPT for all jurisdictions to simplify the TPT system for taxpayers while ensuring local jurisdictions receive the correct tax dollars they are owed,” Director David Briant said.

The most significant change, Briant said, requires all businesses to use location-based reporting when submitting TPT returns to ensure cities receive accurate distribution of taxes collected.

Two new forms (TPT-EZ and TPT-2) are available to accommodate location-based reporting for reporting periods beginning on or after June 1, 2016. The TPT-EZ is a simplified tax form for businesses with one location or jurisdiction. The TPT-2 replaces the outdated TPT-1 for use by multi-location or multi-jurisdiction businesses. The department will no longer accept TPT filings using the TPT-1 form for reporting periods beginning on or after June 1, 2016.

In addition, Briant said the law now requires businesses with more than one physical location in Arizona to file tax returns electronically via www.AZTaxes.gov. The department has stepped up its outreach to taxpayers to help them understand and comply with the law’s requirements.

“Our mission is to serve Arizona taxpayers,” Briant said. “We’re working hard to simplify how taxpayers report and pay TPT, which accounts for approximately 54% of the roughly $14 billion of tax revenue Arizona collects per year.”

Taxpayers can register to receive updates from the department by email or text message. To subscribe, visit www.azdor.gov and click on “GET THE LATEST INFORMATION.”

Taxpayers with questions about the upcoming TPT changes may contact the department at 1-844-698-9176 or email AskTPT@azdor.gov.