Arizona Use Tax

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January 8, 2018

In hopes of receiving more tax revenue, Arizona is concocting a public relations campaign that will persuade the state’s residents to send the tax collector money whenever an Arizonian buys something out of state. This new plan covers tax amounts for situations where the Arizona resident buys these items online or from a store while they are on vacation.

This procedure is a new fill-in-the-blank form that is created by the Department of Revenue. On this form, shoppers will insert the dollar amount that they have spent. From there, the form will compute what is owed to the state by taking the dollar amount and multiplying the total by 5.6%, which is the state tax.

This is akin to when a person purchases an item from a brick-and-mortar shop in Arizona. When a purchase is made, the retailer automatically adds the appropriate local taxes. Following the roll-out of this new tax form, online retailers such as Wal-mart, Target, and Amazon will now include the state’s “transaction privilege tax.”

Department spokesman, Ed Greenberg, spoke about this new endeavor stating, “The intent of the form is to improve customer service for Arizonans using the use tax payment program.”

According to Greenberg, this new form is meant to help the citizens of Arizona comply with the law. In turn, this will make the Department of Revenue’s job easier as well. The end result will be more money for the state.

Greenberg continued, “The use tax was instituted to protect Arizona sellers who otherwise would be at a competitive disadvantage when it comes to out-of-state sellers.”

What complicates the process for those who followed tax laws prior to this form is that if Arizonians buy products while on vacation, even if the purchase is in a state that has no tax, the Arizona resident is expected to pay the state tax. On top of that, they are required to pay the local tax of where they live on that item. If the purchase is made in a state with a lower tax, which for example Hawaii boasts a 1.6% tax, the Arizona resident would be expected to pay the difference to meet Arizona’s state taxes. Again, they are also expected to pay the local tax as well.

There is no minimum on this new tax. No matter how low the dollar amount is, Arizona still expects their cut. So, if you are purchasing a $5 souvenir while on holiday, Arizona wants it 28 cents.

Greenberg summed up the endeavor, “It all circles back to the reason for the use tax being instituted.  That was to level the playing field as much as possible ... and protect Arizona sellers so they’re not at a competitive disadvantage.”


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