Why did Arizona bill me registration fees for individual cities?
In our understanding from working with the Arizona Department of Revenue, Arizona's local taxes are broken down by both “program cities” and “non-program” cities, which makes Arizona registration a bit different than other states.
- Program cities are administered by the state of Arizona. You pay any Arizona state sales tax you collected, and any local sales tax you collected from buyers in program cities straight to the state of Arizona.
- Non-program cities are individually administered. This means that if you report a sale to a customer in one of these cities, the state of Arizona’s sales tax filing system will automatically enroll you for a sales tax registration in that non-program city. This usually comes with a fee, and that fee may be anywhere from a few dollars to up to $50.
Though this seems pretty complicated in comparison to other states, keep in mind that Arizona considers this a “simplification” from how things were done in the past.
- Prior to January 2017, if you made a sale to a buyer in a non-program city then you would also have been required to file individual tax returns with each individual non-program city.
- Arizona's sales tax simplification efforts for 2017 eliminated the separate city filings and allowed sellers to file a single return with the state, though sellers are still required to register for a TPT permit with each unique non-program city into which you make a sale.
*It's important to note that under Arizona legislation, municipal license fees are waived for both remote sellers and online marketplace facilitators. It follows that remote sellers are typically exempt from municipal license/registration fees in Arizona. Thus, if your sales tax account is billed for any of these fees -- and you are a remote seller -- we suggest reaching out directly out the state to ensure you are assigned the correct license type in Arizona, as well as if you - as a remote seller, are exempt from these fees, which can result in the removal of these registration fees from your account.