The proposed bill, SB1556, 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, calculated as the average of all municipal tax rates from the previous fiscal year, starting in 2025. This simplifies tax compliance by enabling remote sellers to pay a uniform rate instead of varying rates for each municipality. Additionally, the bill establishes a framework for remote sellers to communicate through their home state tax agency for tax remittance, provided that other states extend comity for tax administration.

Furthermore, the bill modifies the sales threshold for remote sellers, shifting from gross proceeds to taxable sales, and requires those exceeding $100,000 in taxable sales to remit TPT starting January 1 of the following year, rather than the first day of the month after the threshold is met. It also introduces a compliant purchaser certificate, allowing 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, the bill aims to streamline tax processes for remote sellers and reduce administrative burdens while encouraging other states to adopt similar measures.

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