State SealARIZONA HOUSE OF REPRESENTATIVES

 

SB 1099: liability threshold; estimated TPT payments

PRIME SPONSOR: Senator Fann, LD 1

BILL STATUS: Ways & Means

 

Legend: DOR – Department of Revenue TPT- transaction privilege tax Amendments – BOLD and Stricken (Committee)

Abstract

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRelating to payment of TPT liability.

Provisions

1.       Increases the minimum TPT liability amount for which a business entity is required to report and pay an estimated tax payment in June from $1,000,000 to:

a.       $1,500,000 in 2019;

b.       $2,000,000 in 2020;

c.        $3,000,000 in 2021;

d.       $4,000,000 in 2022; and

e.       $5,000,000 in 2023 and each year thereafter. (Sec. 1)

2.       Makes a technical change. (Sec. 1)

Current Law

A business entity that reports and pays income tax that has an annual total tax liability of $1,000,000 or more in the preceding calendar year or can reasonably estimate such liability in the current year, is required to report on the form prescribed by DOR and pay an estimated tax payment by the last business day before June 20th. The estimated tax liability is to be credited against the taxpayer's liability for the month of June of the current calendar year and is equal to half of the actual tax liability for May of the current year or the actual tax liability of the first 15 days of June of the current year. In July of each year, those taxpayers that made estimated payments in the preceding month may subtract the amount of June's estimated payment from their July tax bill (A.R.S. § 42-5014).

Additional Information

TPT is imposed on a vendor for the privilege of conducting business in Arizona. Under this tax, the seller is responsible for remitting to the state the entire amount of tax due based on the gross proceeds or gross income of the business. While the tax is commonly passed on to the consumer at the point of sale, it is ultimately the seller’s responsibility to remit the tax. TPT is broken down into 16 different classifications, one of which is the retail classification. The retail classification is comprised of businesses selling tangible personal property at retail.

 

 

 

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Fifty-third Legislature                  SB 1099

Second Regular Session                               Version 1: Ways & Means

 

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