Arizona Revises Publication 622, Business Basics: A Guide to Taxes for Arizona Businesses

October 26, 2018 Tom Hospod

The Arizona Department of Revenue has revised Publication 622, Business Basics: A Guide to Taxes for Arizona Businesses. There are a few changes of which taxpayers should take note:

  • Explanation of accounting credit for reporting sales – only applicable to state transaction privilege tax or severance tax
  • Section added regarding use tax to be paid for merchandise purchased as an exempt sale for resale that is subsequently used by the business and on purchases from an out-of-state vendor for use in Arizona
  • Explanation of reporting transaction privilege tax – including changes that affect the TPT license and making payments via EFT
  • Information regarding the waste tire fee
  • Further explanation regarding withholding requirements:
    • Withholding of Arizona income tax is required for retailers; and lessors registered with ADOR who sell businesses or individuals who hire employees
    • Withholding percentages are based on gross taxable wages. “Gross taxable wages” is the amount that meets the federal definition of “wages” contained in Internal Revenue Code § 3401
    • Generally, gross taxable wages are reported in box 1 of the employee’s federal Form W-2 at the end of the calendar year

The publication also contains contact information for relevant agencies in Arizona involved in employer reporting.

About the Author

Tom Hospod

Tom Hospod is a member of the Tax Research Team for the Direct Tax division at Sovos Compliance, where his main areas of focus are Tax Withholding and Automatic Exchange of Information (AEOI). Prior to Sovos, Tom worked as a legislative aide in the Massachusetts House of Representatives. He also has experience in securities law—focusing on broker-dealer disputes and representing clients in FINRA arbitration. Tom is a member of the Massachusetts Bar, earned his B.A. from Boston College and his J.D. from the University of Miami.

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