Arizona Laws 42-5044. Nexus; out-of-state businesses; threshold; applicability; rulemaking; reporting; definition
A. Notwithstanding any other law, any person that conducts business in an activity classified under section 42-5061 with purchasers in this state is engaging or continuing in business in this state, is subject to this article and shall pay the taxes levied under this article, section 42-5061 and chapter 6 of this title and any duly enacted special district transaction privilege taxes imposed under title 48 on retail sales of tangible personal property if the person meets either of the following criteria in the previous or current calendar year:
Terms Used In Arizona Laws 42-5044
- Business: includes all activities or acts, personal or corporate, that are engaged in or caused to be engaged in with the object of gain, benefit or advantage, either directly or indirectly, but does not include either:
(a) Casual activities or sales. See Arizona Laws 42-5001
- Department: means the department of revenue. See Arizona Laws 42-1001
- Engaging: when used with reference to engaging or continuing in business, includes the exercise of corporate or franchise powers. See Arizona Laws 42-5001
- Gross income: means the gross receipts of a taxpayer derived from trade, business, commerce or sales and the value proceeding or accruing from the sale of tangible personal property or service, or both, and without any deduction on account of losses. See Arizona Laws 42-5001
- Gross proceeds of sales: means the value proceeding or accruing from the sale of tangible personal property without any deduction on account of the cost of property sold, expense of any kind or losses, but cash discounts allowed and taken on sales are not included as gross income. See Arizona Laws 42-5001
- Marketplace: means a physical or electronic place, platform or forum, including a store, booth, internet website, catalog or dedicated sales software application, where products, including tangible personal property, are offered for sale. See Arizona Laws 42-5001
- Marketplace seller: means a person that makes retail sales through any physical or electronic marketplace that is operated by a marketplace facilitator. See Arizona Laws 42-5001
- Month: means a calendar month unless otherwise expressed. See Arizona Laws 1-215
- Person: means a natural person, individual, proprietor, proprietorship, company, corporation, organization, association, joint venture, partner, partnership, trust, estate or limited liability company, the federal or state government, a political subdivision of a state or any other legal entity or combination of entities that owns, controls or has possession of real or personal property. See Arizona Laws 42-11001
- Remote seller: means a person that sells products for delivery into this state and that does not have a physical presence or other legal requirement to obtain a transaction privilege tax license in this state other than because the person's business exceeds the threshold provided in section 42-5044. See Arizona Laws 42-5001
1. If the person is a remote seller, the gross proceeds of sales or gross income derived from the remote seller’s business with customers in this state pursuant to section 42-5061 that is not facilitated by a marketplace facilitator is more than the following:
(a) For calendar year 2019, $200,000.
(b) For calendar year 2020, $150,000.
(c) For calendar year 2021 and for each calendar year thereafter, $100,000.
2. If the person is a marketplace facilitator, the gross proceeds of sales or gross income derived from the marketplace facilitator’s business on its own behalf or on behalf of at least one marketplace seller with customers in this state pursuant to section 42-5061 is more than $100,000.
B. For the purpose of determining whether a person meets any of the criteria prescribed in subsection A of this section, all affiliated persons shall be aggregated.
C. If the threshold provided in subsection A of this section was not met in the previous calendar year and is met partway through the current calendar year, the person shall obtain a transaction privilege tax license from the department once the threshold is met and begin remitting the tax on the first day of the month that starts at least thirty days after the threshold is met for the remaining of the current year and the next calendar year. If the person does not meet the threshold in the next calendar year, the person is not required to remit the transaction privilege tax for the calendar year following that calendar year and may cancel the person’s transaction privilege tax license. If the threshold is met in a subsequent calendar year, the person shall remit the transaction privilege tax pursuant to this section.
D. The department may adopt rules pursuant to Title 41, Chapter 6 to carry out this section.
E. A marketplace facilitator shall report the tax due under this section from transactions facilitated on behalf of marketplace sellers. A marketplace facilitator may report the tax due under this section with the tax collected from transactions made directly by the marketplace facilitator on a combined tax return or on a separate return.
F. For the purposes of this section, "affiliated person" means a person that, with respect to another person, either:
1. Has an ownership interest of more than five percent, whether direct or indirect, in that other person.
2. Is related to the other person because a third person, or a group of third persons that are affiliated persons with respect to each other, holds an ownership interest of more than five percent, whether direct or indirect, in the related persons.