US sales tax (Arizona)

[Jeff Harrison]

----- Original Message ----

> From: Richard Kreiss <rkreiss at gccconsulting.net>
> > -----Original Message-----
> > From:  filepro-list-bounces+rkreiss=verizon.net at lists.celestial.com
> >  [mailto:filepro-list-bounces+rkreiss=verizon.net at lists.celestial.com]  On
> > Behalf Of Shane Gray
> > Sent: Wednesday, June 22, 2011 10:11  PM
> > To: 'filePro Mailing List'
> > Subject: OT: US sales tax  (Arizona)
> > 
> > G'day all.  Being in Australia, we haven't had  much to do with US sales
> taxes
> > and our own taxation system was  simplified to use a VAT (GST) here about
> 10
> > years ago.
> > 
> > We now have an Australian based client opening up a  manufacturing
> > operation in Phoenix, Arizona.
> > 
> > We would  appreciate confirmation that our understanding of tax on sales as
> >  following is correct:
> > 
> > 
> > Sales to Private  Consumers
> > 
> > A privilege tax (PT) (commonly referred to as a sales  tax) is imposed on
> all
> > sales within the state (Arizona) to private  consumers - it consists of 3
> > percentages:
> >                          -  State
> >                          - County
> >                          - City
> > 
> > The same PT  is applied to ALL sales to all private consumers in Arizona
> (or
> > does  this change based on ZIP code to determine county & city?)

Unfortunately, this is much more complicated that it seems - also more 
complicated than it should be.  For sales within Arizona you will have the fixed 
state sales tax, you will need to know the county to determine the county tax, 
and I think you will need to know the zip code and city and also whether or not 
the customer is within the city limits - for the local/city tax.  There are many 
3rd party programs available that will calculate the tax for you - based on 
various variables.

> > 
> >  No PT is applicable to sales to other states to private consumers.
> > 

Well, sales tax may be applicable - or not.  Assuming you do not have any 
employees in any other states I don't think you will need to collect sales tax 
for the other states.  However, I think it would be the responsibility of the 
customer to pay them if applicable.  I don't know if you would be liable for at 
least calculating it - I don't think so as Amazon doesn't calculate it for me.

> > 
> > Sales to other Businesses (Vendors)
> > 
> > PT is  charged to vendors within state (Arizona) unless vendor has  supplied
> an
> > Arizona Resale Certificate (Form 5000A) in which case  they are exempt from
> > PT.

I believe you will need to have a copy of a current certificate on file - in 
case of an audit.

[snip]
> > 
> > Use Tax (UT)
> > 
> >  Where vendor sells product for client's in-house use (not for resale)  e.g.
> > office consumables, the vendor charges a USE tax (UT). Where UT is  charged
> > from another state, there is a liability to pay state (Arizona)  the
> difference
> > between UT charged and state's UT rate - if the other  state's UT is less
> than
> > Arizona's UT. If higher UT charged by other  state, than no credit is
> applicable.
> > 
> > Is the above  correct?

I don't know.  My understanding was that if an item is not purchased for resale 
- (or if you don't have a resale certificate)then it is fully taxable.

> > 
> > Are there any other taxes on sales that are  applicable?
> > 
Other than state, county and city - that should be about it.  Be aware though 
that tax can be conditional depending on what the item is.  For example food is 
tax exempt in most states I believe.  Of course not all food - junk food will 
usually be taxed for example.  Sometimes clothing will be tax exempt.  Sometimes 
there may be an extra tax for certain items - such as certain taxes on Tires for 
example.  You are beginning to see why there are 3rd party programs for this?
 
> > Thanks
> > Shane.
> 
> Based on my experience  after living in New York, I would guess that this is
> not based on zip code as  in city can have more than one zip code.
> 
> My assumption is that the state  tax is fixed throughout the state; the
> county tax can vary from county to  county.  The city tax would be fixed
> within the city but can vary from  city to city.
> 

Even within a city it can vary - you need to at least know if they are "within 
the city limits" - even then it is not perfect, but I would guess it would get 
you what you need 99.9% of the time.  My address may say Tampa, but if so I 
could certainly live outside the city limits where the Tampa tax (if there were 
one :-) )  is not applicable.  The ADP Taxware program that my company uses has 
various geocodes that ADP defined which break up the zip codes into discrete 
areas within each zip - they then tax based on these geocodes - as well the many 
other factors that I mentioned previously.

> Therefore, I would not use the zip code for calculating  what tax to charge.
> 
Right!

Good Luck.

Jeff Harrison
jeffaharrison at yahoo.com
Author of JHExport and JHImport