Arizona Tax Filing and Reporting Finally Simplified

by TaxJar November 1, 2020

Updated July 1st, 2016

After a couple of false starts spanning several years, Arizona is finally simplifying it’s transaction privilege tax (TPT) system. In Arizona, TPT is the equivalent of sales tax in most other states.

The state hasn’t released much hard news yet, but this post will go over what we know for now.

What do these Arizona tax changes mean for online sellers?

Changes to TPT reporting

According to a press release from the Arizona Department of Revenue, sellers will now be required to use “location-based” reporting when submitting TPT returns to ensure accurate distribution of taxes to counties, cities and other local jurisdictions. We’ll know more about this on July 5th when Arizona releases their new filing form TPT-2.

Changes to TPT filing

To accommodate these changes, the state of Arizona is releasing two new forms for Arizona filers to use. These forms should be used for filing for taxable periods on or after June 1, 2016.

TPT-EZ – Businesses with one location or jurisdiction in Arizona should use this form. (Arizona TPT-EZ instructions)

TPT-2 – This form replaces TPT-1 and is for businesses with multiple locations or jurisdictions within the state. Businesses with more than one location or jurisdiction in the state must also file Arizona TPT returns electronically.

In the past, online sellers with no physical location in the state were required to file “use tax.” It is not yet clear how these sellers should file after these updates. We plan to update here very soon with that information.

Future changes to Arizona TPT registration

If you’re familiar with Arizona, you know that in the past the state required sellers to register with the state and with each “non-program city” where the state didn’t administer tax. An out-of-state seller in Arizona may have found herself registered in 10+ different cities in Arizona.

While a change to these regulations isn’t in place yet, according to Arizona Department of Revenue Director David Briant, they are coming in the fall. Stay tuned to the TaxJar blog for more as the state makes new announcements.

Do you have questions or comments? Start the conversation in the comments or over at our Facebook group Sales Tax for eCommerce Sellers.

The basics of US sales tax

Learn the fundamentals of sales tax.

Watch the video