The proposed bill, SB1325, introduces significant changes to the transaction privilege tax (TPT) system for remote sellers in Arizona. It allows remote sellers to opt for a single municipal tax rate instead of paying varying rates for each municipality, starting in calendar year 2024. This single rate will be determined as the average of all municipal tax rates from the previous fiscal year. Additionally, the bill mandates that remote sellers with over $100,000 in taxable sales must remit TPT based on taxable sales rather than gross proceeds, and they will begin remitting taxes from January 1 of the following year if they meet the threshold midyear.

Furthermore, the bill establishes provisions for a central clearinghouse for tax administration, allowing remote sellers to communicate through their home state tax agency for tax remittance to Arizona, provided that another state tax agency extends comity. It also introduces a compliant purchaser certificate, enabling purchasers to pay TPT directly to the Arizona Department of Revenue, relieving remote sellers of the obligation to collect and remit the tax for those sales. Overall, these changes aim to simplify tax compliance for remote sellers and enhance cooperation between state tax agencies.

Statutes affected:
Introduced Version: 42-1054, 42-5009.01, 42-5044, 42-6018, 42-5001, 42-5061
Senate Engrossed Version: 42-1054, 42-5009.01, 42-5044, 42-6018, 42-5001, 42-5061