Tag Archives: arizona retailers association

sales.tax

Arizona Business Community Supports HB2111

The undersigned organizations and businesses want to express their strong support for the passage of HB2111 with the floor amendment that will be offered by Senator Steve Yarbrough. This final amendment represents major concessions to address concerns that have been expressed by the city representatives.

This final amendment reflects the cities’ request for a separate online portal for the collection of sales taxes in the 18 non-program cities. In addition, the amendment reflects the cities’ demand to maintain the authority to audit single-location businesses in their city. Lastly, the amendment removes all of the changes to prime contracting tax except for the trade and service contractors.

While the Yarbrough amendment reflects major concessions to the cities that undermine some of the important reforms recommended by the Transaction Privilege (Sales) Tax Simplification Task Force, we believe this final proposal still reflects historic progress that deserves final passage.

The Senator Yarbrough floor amendment will provide for the following:

* Single Point of Administration – the Department of Revenue (DOR) will become the single point of administration and collection of TPT. However, at the request of the cities, there will be a separate online portal for the 18 non-program cities. Despite this concession, the cities remain opposed because they want to continue to require businesses making paper sales tax remissions to pay the state and city separately. Their proposal provides most small businesses no administrative relief from making multiple payments to multiple jurisdictions each month.

* Single and Uniform Audit – DOR will administer a standardized state audit program where all state and city auditors are trained and certified by DOR. Despite major concessions from the business community to allow cities to continue to audit local businesses, the cities continue to push for further changes that will undermine much needed reforms to standardize state and local audits.

* Trade/Service Contracting Reform – Service contractors working directly for an owner to maintain, repair, and replace existing property would pay tax on materials at retail and not be subject to the Prime Contracting Tax. During Task Force deliberations, the cities repeatedly conceded that this area of the prime contracting tax was problematic and should be changed. However, after almost a year of study and discussion, they have offered a change to the taxation of service contractors that provides no administrative relief and couples that change with a request that the state give the cities $80 million from use tax collections.

Arizona’s chaotic and dysfunctional sales tax system has been the subject of considerable controversy at the Capitol for over 30 years. The creation of the Task Force, as well as the appearance for the first time that the cities recognized the need for reform, gave Arizona businesses great hope that this system would finally be reformed. We strongly encourage state policymakers to pass a sales tax reform bill that is grounded in sound tax policy and focuses on reducing the extraordinary compliance costs on Arizona businesses.

Kevin McCarthy, President, Arizona Tax Research Association
Michelle Lind, Chief Executive Officer, Arizona Association of REALTORS
Bas Aja, Executive Vice President, Arizona Cattlemen’s Association
Glenn Hamer, President & CEO, Arizona Chamber of Commerce
Steve Macias, Chairman, Arizona Manufacturer’s Council
Francis McAllister, Chairman, Arizona Mining Association
Courtney LeVinus, Arizona Multihousing Association
Michelle Allen Ahlmer, Executive Director, Arizona Retailers Association
Steve Chucri, President/CEO, Arizona Restaurant Association
Rick Murray, Chief Executive Officer, Arizona Small Business Association
Steve Zylstra, President & CEO, Arizona Technology Council
Greg Turner, Vice President, Senior Tax Council, Council On State Taxation (COST)
Lisa Rigler, President, Small Business Alliance AZ
Todd Sanders, President & CEO, Greater Phoenix Chamber of Commerce
Tom Franz, President, Greater Phoenix Leadership
Connie Wilhelm, President, Home Builders Association of Central Arizona
Tim Lawless, Chapter President, NAIOP
Farrell Quinlan, Arizona State Director, NFIB
Ronald E. Shoopman, President, Southern Arizona Leadership Council
Scot Mussi, President, The Arizona Free Enterprise Club
Matt Beckler, Vice President, Treasurer & Chief Tax Officer, Apollo Group, Inc.
Steve Barela, State & Local Tax Manager, Arizona Public Service
Steve Trussell, Executive Director, Arizona Rock Products Association
Michael DiMaria, Director of Legislative Affairs, CenturyLink, Inc.
Gayle Shanks, Owner, Changing Hands Bookstore
Michelle Bolton, Director of Public Affairs, Cox Communications
Nikki Daly, Owner, Flair! Salons
David Karsten, President, Karsten’s Ace Hardware
Reuben Minkus, Minkus Advertising Specialties
PetSmart, Inc.
Tina Danloe, General Manager, Pima Ace Hardware
Molly Greene, Senior Government Relations Representative, Salt River Project
Les Orchekowsky, President & Co-Owner, Sierra Ace Hardware, Inc.
Ann Seiden, Administrator/Corporate Public Affairs, Southwest Gas Corporation
Joseph Hughes, Director of Government Affairs, U.S. Airways
Walgreens Co.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

online sales tax issue

Arizona Panel To Consider Online Sales Tax Issue

Online sales tax is supposed to be charged by companies that have an actual brick and mortar building located in Arizona. What about those that don’t have a physical presence in Arizona.

The issue of whether Amazon.com should be required to collect tax on online sales to Arizonans isn’t going away.

State legislators during their 2012 regular session considered but ultimately shelved proposals to force the Seattle-based online retailer to collect tax on its sales in Arizona.

But the issue is expected to resurface publicly in coming months when a newly appointed state task force considers making recommendations for legislative action on improving Arizona’s sales-tax system.

Gov. Jan Brewer didn’t specify online purchases as a topic for the task force to consider, but a senior Brewer aide who will lead the panel said the issue will be taken up under its charge to recommend ways to simplify the state’s sales-tax system.

“We’re likely to dedicate some significant time and resources to it,” said Michael Hunter, Brewer’s tax policy adviser and her chief legislative lobbyist.

Because of the simplification mandate and brick-and-mortar retailers’ complaints about no-tax competition from Amazon.com, “it’s going to have to come up,” agreed Kevin McCarthy, a task force member and head of a business-backed taxpayer advocacy group.

Meanwhile, the state apparently still has a $53 million tax assessment pending against the online retailer in confidential proceedings.

Arizonans are legally supposed to pay sales tax on purchases of goods bought from retailers that don’t collect tax, but few do.

Amazon contends it doesn’t have to collect sales tax from Arizonans because it doesn’t have a “physical presence,” such as stores, in the state. The company contends its so-called “fulfillment centers” — distribution warehouses that ship goods to customers — don’t count because they’re owned by a subsidiary.

The Arizona Senate on March 8 soundly rejected a bill that would have classified Amazon as an in-state retailer for tax purposes because the subsidiary has facilities in Arizona.

In some other states, fulfillment centers have led to Amazon agreeing to begin collecting sales tax. A recently announced agreement calls for Amazon to collect tax on sales in New Jersey starting next summer, the same time the company plans to begin building two new centers that will be its first in that state.

Michelle Ahlmer, Arizona Retailers Association executive director, said her group will push the task force to recommend that legislators pass a law next year requiring Amazon to collect sales tax by July 2013 at the latest.

“We don’t want a quick glossing over,” Ahlmer said. “There’s no way we can let this stay the way it is.”

Hunter said Brewer’s office didn’t take a yes-or-no position on the 2012 legislation but questioned whether a $53 million assessment against Amazon by the state Department of Revenue could be undermined.

Because the department contends Amazon already must collect tax, the task force needs to consider the impact of changing state law, he said.

It’s too early to discuss what the task force might recommend, Hunter added. “The message I want to deliver is we need to let the process unfold.”

Citing confidentiality requirements regarding taxpayers, Revenue Department spokesman Anthony Forschino declined to comment on the assessment.

Amazon representatives did not immediately respond to inquiries about the assessment. Amazon reports filed with the Securities and Exchange Commission have disclosed only the assessment’s existence, not a resolution.

In considering the defeated legislation, some Arizona legislators sided with retailers who argued Amazon’s no-tax status jeopardizes thousands of jobs at brick-and-mortar businesses.

One senator who opposed the bill said it could make recruiting businesses difficult if they worry they could be hurt by future changes in tax policy.

Other senators echoed an Amazon lobbyist’s testimony that the legislation would violate the Arizona Constitution’s prohibition on bills targeting specific individuals or companies.

After signing the May 11 order creating the tax force, Brewer said the online sales tax issue “is probably something we need to look into and determine what Arizona can do.” But she said it requires a national solution by the federal government.

“That’s where the buck stops on that issue,” Brewer said.

Find out more about Arizona state tax laws and online sales tax requirements at the State of Arizona Department of Revenue’s website aztaxes.gov.