AZ Department of Revenue to Require Electronic TPT Filing and Paying in 2019

  |  December 3, 2018

In 2019, the Arizona Department of Revenue (ADOR) will be taking another step in its ongoing drive to provide enhanced customer service through electronic filing and paying.

E-filing and paying is more secure and faster for taxpayers and critical for ADOR to deliver a more results-driven, customer-focused management system that produces enhanced services for Arizonans. Increasing electronic payments frees up additional ADOR resources to process tax returns and payments of all types much faster. It also further strengthens tax fraud prevention measures and enhances the taxpayer experience.

Most importantly for taxpayers, electronic filing and paying saves money. Taxpayers filing electronically are eligible to receive up to a $2,000 reduction of tax due, thanks to the enhanced annual accounting credit for e-filing.

To file and pay online, a business must be registered to use www.AZTaxes.gov and use Automated Clearance House (ACH) Debit as a payment method to comply with electronic funds transfer (EFT) payment requirements. Filing online means faster processing and fewer errors. For more information, visit azdor.gov.

What’s happening?

Effective January 1, 2019, businesses with an annual transaction privilege tax (TPT) and use tax liability of $10,000 or more (reduced from $20,000 in 2018) during the prior calendar year will be required to file and pay electronically starting in February, 2019 for the January reporting period.

How does the increased accounting credit of up to $2,000 work?

Taxpayers filing TPT electronically during a calendar year are able to claim an increased accounting credit from 1 percent to 1.2 percent. This increases the total calendar year credit limit from $10,000 to $12,000. For taxpayers who file paper TPT returns, the accounting credit remains unchanged at 1 percent and a total calendar year credit of $10,000.

Is there a penalty for not filing and paying electronically?

  • Taxpayers required to file an electronic return will be subject to a penalty of 5 percent of the tax amount due for filing a paper return.
  • Taxpayers required to pay electronically will be subject to a penalty of 5 percent of the amount of payment made by check or cash.

There is also an update to the penalty for late filing. Under recent legislation, all late filing penalties will be a minimum of $25, including for filings with zero liability.

For more information on transaction privilege tax, including TPT filing and paying requirements, go to: azdor.gov/transaction-privilege-tax-tpt.

Effective dates for future TPT e-file/e-pay for businesses that have the following liabilities in the previous calendar year:

  • $5,000 beginning January 1, 2020
  • $500 beginning January 1, 2021.

For more information on the Arizona Department of Revenue visit: www.azdor.gov. Please contact Thomas Herrick or James Ortiz, 602-730-3688, in REDW’s Tax Department, with any questions on this announcement.

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