ARIZONA STATE SENATE
Phoenix, Arizona
direct use tax payments
Allows businesses to pay owed use taxes directly to the Department of Revenue (DOR).
Use taxes are imposed upon the purchaser of tangible personal property that is used, stored, or consumed in Arizona when the sale was not subject to the transaction privilege tax (TPT). Out-of-state vendors or utility businesses selling tangible personal property to Arizona purchasers are required to register with DOR for the collection of the use tax. If an out-of-state vendor is not registered with DOR to collect the use tax, the purchaser is required to register with DOR to collect the use tax.
Purchasers that are subject to TPT file their use tax obligation monthly with their TPT tax returns. Purchasers that are not subject to TPT, but owe use taxes, apply for a use tax license and pay use taxes on a monthly, quarterly, or annual basis. It is unclear whether taxes collected by an out-of-state vendor are sent back to Arizona or remitted to the vendor’s home state.
H.B. 2300 would allow liable purchasers to apply for a direct use tax payment permit. The permit would clarify to out-of state vendors that in-state purchasers accept the responsibility of paying taxes owed.
DOR states there is no fiscal impact associated with this legislation.
1. Allows purchasers that buy at least $500,000 worth of tangible personal property annually to pay use taxes to DOR
2. Specifies that a purchaser must apply for a permit and agree to self-assess use tax liability.
3. Requires DOR to issue a use tax permit to persons who meet the requirements.
4. Allows DOR to require a bond, if necessary, for persons who apply for a direct use payment permit.
5. Specifies that a use tax permit holder can issue a DOR prescribed certificate to any retailer until a holders permit is withdrawn or revoked.
6. Specifies that giving of a certificate relieves a retailer for use tax liability.
7. Specifies that DOR may post a list of taxpayers and the tax identification numbers on DOR’s web site.
8. Specifies that permit holders are liable for all use, taxes, interest and penalties relating to use taxes.
9. Provides for an effective date of tax periods beginning after December 31, 2002.
WM 2/12/02 DPA 6-0-0-4
3rd Read 4/04/02 54-0-6-0
Prepared by Senate Staff
April 11, 2002