E-Services for Businesses in Arizona
For businesses, filing electronically is a requirement under certain circumstances. The following criteria determines which Arizona taxpayers must remit their taxes electronically:
- Withholding Tax - Any taxpayer with $125 average quarterly liability for withholding tax during the prior tax year.
- Transaction Privilege Tax – Any taxpayer with $500 prior tax year liability.
- Tobacco Luxury Tax – Arizona licensed distributors are required to submit all documents (including returns) and make all payments electronically through Arizona Luxury Tax Online (ALTO).
- Fiduciary, Partnership, and Corporate - Arizona income returns must be filed for taxable years beginning from and after December 31, 2019.
For businesses, paying electronically is a requirement under certain circumstances.
- Corporate Estimated Tax Payments - Any corporation with $500 prior tax year liability.
Failure to comply with the electronic filing and payment requirements may result in penalties.
| Year | E-File and E-Pay Threshold |
|---|---|
| 2020 | $5,000 annual transaction privilege tax and use tax liability |
| 2021 | $500 annual transaction privilege tax and use tax liability |
| (Pursuant to A.R.S. § 42-5014 and 42-1129) |
Penalty for not filing and paying TPT electronically:
- Penalty of 5% of the tax amount due for filing a paper return. The minimum penalty is $25, including filings with zero liability.
- Penalty of 5% of the amount of payment made by check or cash.
- Penalty of 4.5% of the tax required to be shown on the return for each month or fraction of a month the return is late. There is a minimum of $25 and a maximum 25% of the tax due or $100, per return, whichever is greater.
(Pursuant to A.R.S. § 42-1125)
For more information on business e-filing requirements, see ADOR Pub 650.
AZTaxes.gov
The state of Arizona provides a website that enables business taxpayers to file and pay state taxes online. Users can file withholding and transaction privilege taxes, make corporate income, withholding and transaction privilege tax payments, verify the status of tax licenses, consult answers to tax questions frequently asked of the state and more—all electronically from one location.
Thousands of Arizona businesses are already enrolled at www.AZTaxes.gov because of the following:
- It saves time and money;
- Taxpayers no longer have to make last minute trips to the bank or Post Office, deal with lost checks or miss deadlines.
- Taxpayers are in total control of initiating tax payments securely through this site.
For additional information, visit www.AZTaxes.gov.
Accounting Credit
Electronic filing and paying saves money.
- Electronic TPT filers are able to claim an accounting credit of 1.2 percent of the tax due, up to a maximum credit of $12,000, during a calendar year.
- Paper TPT filers are able to claim an accounting credit of 1 percent and a total calendar year credit of $10,000.
Taxpayers who do not file all their TPT returns electronically for the calendar year do not qualify for the increased accounting credit.
| Business Code | Taxable Activites | Accounting Credit Rate for Paper Filers (STATE TAX ONLY) | Accounting Credit Rate for Electronic Filers (STATE TAX ONLY) |
|---|---|---|---|
| 002 | Mining–Nonmetal | .0313% | .0375% |
| 004 | Utilities | .056% | .0672% |
| 005 | Communications | .056% | .0672% |
| 006 | Transporting | .056% | .0672% |
| 007 | Private (Rail) Car | .056% | .0672% |
| 008 | Pipeline | .056% | .0672% |
| 009 | Publication | .056% | .0672% |
| 010 | Job Printing | .056% | .0672% |
| 011 | Restaurants and Bars | .056% | .0672% |
| 012 | Amusement | .056% | .0672% |
| 014 | Personal Property Rental | .056% | .0672% |
| 015 | Contracting–Prime | .056% | .0672% |
| 017 | Retail | .056% | .0672% |
| 019 | Severance–Metalliferous Mining | .025% | .03% |
| 025 | Transient Lodging | .055% | .066% |
Electronic Funds Transfer Program
Since Jan. 1, 1993, the state of Arizona has required certain taxpayers to remit payments due through the electronic funds transfer (EFT) system. Electronic funds transfer requires the taxpayer to send payments electronically rather than writing and mailing a check. It has proven to be a safe, efficient payment system that allows the state to use techniques that banks and businesses have used for years. Payments move almost instantaneously through this system from taxpayers’ accounts into the State Treasury, ensuring that payments are received by the due date.
TPT Bulk Filing Options
The state of Arizona allows taxpayers to electronically file and pay their transaction privilege tax returns using approved tax preparation software. There are two options to file:
- Returns can be filed through the software products or tax professionals approved for this program.
- Taxpayers can upload a file created by the approved tax preparation software on AZTaxes.gov.