Next Phase in Electronic Filing and Paying Goes into Effect Jan. 1, 2021
Beginning January 1, 2021, the transaction privilege tax electronic (TPT) filing and paying threshold lowers to $500.
Under legislation enacted in 2017, businesses with an annual TPT and/or use tax liability of $500 or more during the prior calendar year will be required to file and pay electronically starting in February 2021 for the January reporting period.
E-filing and paying are more secure and faster for taxpayers and critical for ADOR to deliver a more results-driven, customer-focused management system.
Taxpayers also save money through e-filing by becoming eligible to receive an enhanced accounting credit. Taxpayers filing TPT electronically during a calendar year are able to claim an accounting credit of 1.2 percent of the state tax due, with the total calendar year credit limit of $12,000.
Is there a penalty for not filing and paying electronically?
Penalty for not filing and paying TPT electronically:
- Penalty of 5% of the tax amount due for filing a paper return. The minimum penalty is $25, including filings with zero liability.
- Penalty of 5% of the amount of payment made by check or cash.
- Penalty of 4.5% of the tax required to be shown on the return for each month or fraction of a month the return is late. There is a minimum of $25 and a maximum 25% of the tax due or $100, per return, whichever is greater.
If the business’ estimated annual combined Arizona, county, and municipal TPT liability is less than $2,000, consider adjusting the filing frequency to annually. If the change to annual filing is made in 2020, the change will occur for the 2021 filing period. This reduces the possibility of delinquent returns and payments by decreasing the filing occurrences.
To file and pay online, a business must be registered on (www.AZTaxes.gov) and use Automated Clearance House (ACH) Debit, e-check, or credit card as a payment method to comply with electronic funds transfer payment requirements.
Last Chance for 2021 Transaction Privilege Tax License Renewals
TPT licenses are valid for one calendar year, from January 1 through December 31. Licenses renewed within the calendar year must still be renewed at the start of the following calendar year.
Taxpayers must renew the license before carrying on with business in Arizona. Failure to renew or renewals after January 1 will incur penalties and/or late fees.
Out-of-state businesses without a physical presence in Arizona must renew their TPT licenses if they have more than $100,000 in sales to Arizona customers in the current or prior calendar year.
ADOR strongly encourages taxpayers to renew online via AZTaxes.gov for easier renewals and faster processing. State law requires taxpayers with multiple business locations to renew their TPT license electronically.
Taxpayers no longer in business must cancel their license, and can do so through AZTaxes.gov or by submitting a Business Account Update Form with a cancel effective date. This will ensure account history remains in good standing.
How to renew your license on AZTaxes.gov
- Go to www.AZTaxes.gov
- Log in using your username and password.
- Click “License Renewal” in the ‘Action’ section of your Business List or select “License Renewal” on the left-hand navigation bar.
(You will need the pertinent information for renewal, any changes, payment information, and your e-signature PIN.)