What is Transaction Privilege (Sales) & Use Tax?
Transaction privilege tax is commonly referred to as a sales tax. However, it is a tax on the privilege of doing business in Arizona, imposed on the business. While a business may pass the tax on to the consumer, the business is responsible for reporting and remitting the appropriate tax on their business activity.
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Tax Reporting Requirements & Payment of Tax
Businesses are required to report and pay Phoenix privilege sales tax on their taxable business activity on a monthly, quarterly, or annual frequency. Reporting frequency is based upon taxable gross income. You may request a change in filing frequency after you have established a minimum of 6 months of reporting history. All new accounts must file monthly for a minimum of six months prior to requesting a change in filing frequency.
|Reporting Frequency||Annual Taxable Gross Income||Due Dates|
|Annual||$0 to $4,999||January 20th of each year|
|Quarterly||$5,000 to $49,999||20th of the month following the reporting quarter (Example: March 2011 return is due by April 20, 2011)|
|Monthly||$50,000 or greater||20th of the month following the end of the month (Example: January 2011 return is due by February 20, 2011)|
- The return is delinquent if not received before the close of business on the last business day of the month. Postmarks are not proof of timely filing. A tax return is due even if you have zero receipts. Please mark the applicable "no activity" box on the tax return form.
Penalty & Interest
A late return is subject to a penalty of 5% per month until filed. The late tax balance is subject to a one-time 10% penalty. Total penalties cannot exceed 25% of the tax due. A delinquent tax balance is also subject to interest on the balance at the end of each month from the month the tax becomes delinquent. See interest rates.