Starting January 1, 2015, revisions to Arizona’s Transactional Privilege Tax (TPT) took effect. The TPT and retail tax laws are codified in A.R.S. § 42-5001- 42-6210. The Arizona Department of Revenue has tagged these revisions as “TPT Simplification.” The goal was to centralize TPT collection, auditing, business/deduction codes through the Arizona Department of Revenue. Unfortunately, AZDOR will not be a single point of licensing, filing, and payment due to the “complexity in incorporating the City’s requirements into the Department’s information technology system.” (TPT Simplification) However, the requirement to comply with the TPT is still in full effect as of January 1, 2015.
Aside from the failure to accomplish the main goal of the TPT, what are the changes the new TPT brings? According to the AZDOR website:
- License for state and cities is valid for one year and must be renewed by January 1 of each year.
- Standardized deduction and business codes.
- Prime Contractors who only enter contracts with owners of real property to maintain, repair, replace, or alter property (not modify) do not need to have a TPT license and only pay retail tax on at the point of purchasing new material.
- Property owners must obtain their own TPT license per location in locations that levy an excise tax. Property Management companies can no longer obtain licenses on behalf of the property owner.
While many aspects of the changes to the TPT may improve/simplify the TPT collection process, the implications of this new law are just unfolding and may cause difficulty in application. Please do not hesitate to contact an attorney at Udall Shumway PLC if you have any questions regarding your obligations under the new TPT requirements.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please feel free to contact Timothy F. Coons at 480.461.5370, log on to udallshumway.com, or contact an attorney in your area.