As a result of action taken during Arizona’s recently concluded legislative session, the state is making significant changes to the TPT (Transaction Privilege Tax). The changes include the following:

Simplified Municipal TPT Filing Process: Beginning January 1, 2014, taxpayers will no longer be required to file TPT returns with each municipality where the taxpayer does business. Under House Bill 2111 (“H.B. 2111”), signed into law by Governor Jan Brewer on June 25, 2013, the Department of Revenue (“Department”) will create an online portal to collect transaction privilege and affiliated excise taxes. The online portal will become the sole point for licensing, filing a return, and paying transaction privilege and affiliated excise tax for all state, county, and municipal jurisdictions. Also effective January 1, 2015, cities and towns that levy a local TPT must enter into agreements with the Department to provide for unified and coordinated auditing programs. Taxpayers with locations in two or more Arizona cities or towns will no longer be audited by multiple municipalities; rather, the state will conduct multi-jurisdictional audits.

Rate Change: The TPT rate has dropped from 6.6% to 5.6% on June 1, 2013, and the state rate for transient lodging dropped from 6.5% to 5.5%. The new tax rates will be reported to the Department beginning with the June 2013 TPT-1 due in July 2013. For quarterly filers, activity from June 1, 2013 through June 30, 2013 will be based on the decreased rate, and activity from April 1, 2013 through May 31, 2013 will be reported on a second row of the return. The annual filers will follow the same format on their December 2013 returns. Read More