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Arizona Revised Statutes Title 42. Taxation § 42-5044. Nexus; out-of-state businesses; threshold; applicability; rulemaking; reporting; definition

Current as of January 01, 2025 | Updated by Findlaw Staff

A. Notwithstanding any other law, any person that conducts business in an activity classified under § 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, § 42-5061 and chapter 6 of this title  1 and any duly enacted special district transaction privilege taxes imposed under title 48  2 on retail sales of tangible personal property if the person meets either of the following criteria in the previous or current calendar year:

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 § 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 § 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  3 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.

1 Section 42-6001 et seq.
2 Section 48-101 et seq.
3 Section 41-1001 et seq.
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Cite this article: FindLaw.com - Arizona Revised Statutes Title 42. Taxation § 42-5044. Nexus; out-of-state businesses; threshold; applicability; rulemaking; reporting; definition - last updated January 01, 2025 | https://codes.findlaw.com/az/title-42-taxation/az-rev-st-sect-42-5044/

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