On June 25, Arizona Governor Jan Brewer signed HB 2111 into law, which modifies, among other things, the administration and reporting associated with Arizona's Transaction Privilege Tax ("Sales Tax") through the following reforms:
- Consolidation of filing via enabling a single filing with the State of Arizona through an online portal as opposed to filing individual municipalities;
- Consolidation of state-level auditing into Arizona’s Department of Revenue; and
- Decreasing the taxing and auditing authority of individual municipalities.
Prior to these reforms, the Tax Foundation ranked Arizona's Sales Tax last in the country in the context of small business because of "uneven tax rates around the state, and heavy taxation of business inputs." After the reforms, however, the Tax Foundation published the following:
The new tax reform does not solve all of Arizona’s problems: tax pyramiding will continue, and business input taxes will continue to make Arizona’s tax code excessively burdensome on many businesses. But HB 2111 is a real step in the right direction.
This brief overview of some important considerations associated with Arizona's Transaction Privilege Tax is by no means comprehensive. Always seek the advice of a competent professional when making important financial and legal decisions.
Douglas K. Cook is an attorney with over 40 years of experience. Although Cook & Cook's office is located in Mesa, Arizona, the attorneys at Cook & Cook represent clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.
