Out-of-state sellers must now begin collecting transaction privilege tax (TPT) in the state of Arizona.
A remote seller that makes direct sales to Arizona customers and ships products into the state, but does not itself have a physical presence in Arizona will pay the tax to the Arizona Department of Revenue (ADOR). A remote seller is required to pay TPT if in the current or previous calendar year annual gross proceeds or gross income derived from direct sales into Arizona is more than $200,000 in 2019, $150,000 in 2020, and $100,000 in 2021 and beyond.
The tax also requires a marketplace facilitator, which is any business facilitating the sale of goods by listing or advertising items on behalf of others, to collect and remit TPT if in the current or previous calendar year annual gross proceeds of sales or gross income through its platform exceeds $100,000 into Arizona.
For remote sellers and marketplace facilitators, the next key date will be November 1, 2019, when they will begin formally filing and paying their TPT for the October reporting period.
To assist businesses from other states comply with the remote seller tax, the Arizona Department of Revenue E-Commerce Compliance and Outreach (ECCO) team is in place to answer any questions about the legislation and the licensing and registering process. Additionally, ADOR specialists are providing guidance to Arizona-based retailers about other states with remote seller programs. The ECCO team can be reached Monday to Friday from 8 a.m. to 5 p.m. (MST) by phone 833-293-7253 (833-AZeSale) or by email email@example.com.
The Department of Revenue also has a dedicated section on its website – www.azdor.gov/out-of-state-sellers – that has information on the legislation, TPT requirements, frequently asked questions, examples and other information.
On May 31, 2019, remote seller legislation was signed into law, which was the result of a 2018 ruling by the U.S. Supreme Court in South Dakota v. Wayfair. The decision allows states to require out-of-state businesses without a physical presence to collect and remit tax on sales from transactions in their state.
For more information on the Arizona Department of Revenue, visit https://www.azdor.gov.