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How to Use an Arizona Resale Certificate
February 2, 2017
When you buy products for resale in the state of Arizona, you can avoid paying sales tax on some items by presenting an Arizona Resale Certificate.
Because Arizona has a “transaction privilege tax (TPT)” rather than a sales tax, it can be a bit more confusing to use a resale certificate in Arizona than it is in other states. This quick guide will give you the lowdown on how to buy products for resale in Arizona. It will also advise what to do you if you’re a retailer and presented with an Arizona Reseller Certificate.
If you Wish to Use an Arizona Resale Certificate
A lot of confusion comes from Arizona’s Transaction Privilege Tax (TPT)—which isn’t a sales tax even though it’s usually thought of as a sales tax. TPT is a tax on the vendor for the privilege of doing business in Arizona and is applied for specific business activities such as retail sales, commercial leasing, and many other business activities.
Here’s how it works:
- You the seller apply for an Arizona TPT license from the Arizona Department of Revenue (DoR) and/or the cities from which you operate, as detailed in the account setup instructions. (If you are already registered for an Arizona TPT license you can skip this step. Keep in mind that if you have an Arizona TPT permit you’ll also need to collect sales tax from your Arizona buyers.)
- Complete AZ Form 5000A – Arizona Reseller Certificate including the TPT license number assigned by the Arizona Department of Revenue.
- Present vendors with a copy of this certificate when you wish to purchase items for resale. Note that you will need to complete Section D – Description of Property Being Purchased.
Arizona’s Department of Revenue requires businesses to renew their TPT license at the beginning of the year. If you plan to get a TPT license make sure you add a task to your calendar to renew your TPT after January 1st each year.
If You’re Presented with an Arizona Resale Certificate
If you are a retailer with nexus in Arizona and your buyer gives you an Arizona Reseller Certificate when buying items for resale, here are a few checks you need to make before completing the transaction:
- Verify that the certificate has been completed, including Section D – Description of Property Being Purchased.
- Verify the TPT license number from the Reseller Certificate using this AZ DoR site. (You can find out how to verify a resale certificate in every state here.)
- Keep each Arizona Reseller Certificate that you receive on file in case of an audit.
If you’re a buyer or seller who interacts with Arizona Reseller Certificates, the AZ DoR invites you to call them at (844)-698-9176 if you have questions. I called them while researching this guide and found them to be very helpful.
We always love to get the conversation going here at TaxJar, so if you’d like to share your experience or have related questions, please post below!
Ready to automate sales tax? To learn more about TaxJar and get started, visit TaxJar.com/how-it-works.