Skip to main content

Customer Notice: Due to COVID-19, ADOR's in-person lobby services are by appointment only and in compliance with local municipal and county face covering policies.

Arizona has moved the individual income taxes deadline to May 17, 2021, without penalties and interest. The deadline for first quarter tax year 2021 individual estimated tax payments remains April 15, 2021.

taxes
Arizona
Department of Revenue
    • Home
    • Business
    • E-File Services
    • Forms
    • News & Notices
    • Reports, Statistics and Legal Research
    • Tax Credits
    • Transaction Privilege Tax (TPT)
    • View My 1099-G
    • Unclaimed Property
    • Contact Us
  • Home
  • Business
  • E-File Services
  • Forms
  • News & Notices
  • Reports, Statistics and Legal Research
  • Tax Credits
  • Transaction Privilege Tax (TPT)
  • View My 1099-G
  • Unclaimed Property
  • Contact Us
  • About
  • Contact Us
  • Site Map
  • Subscribe
  • facebook
  • twitter
  • linkedin
  • Home
  • Exclusion of combined taxes from gross income; itemization; notice; limitations
  • Transaction Privilege Tax
    • Quick Reference
    • Adult Use Marijuana
      • Definitions and Frequently Asked Questions
      • Filing Requirements
    • Aircraft Use Tax
    • Commercial Lease
    • Contracting Guidelines
      • MRRA Contracting
      • Modification Contracting
      • MRRA v Modification Summary
      • Speculative Builder
      • Contracting Examples
      • Contracting Forms
      • Contracting FAQs
    • Deduction Codes
    • Due Dates
    • Do I Need a TPT License?
    • License Compliance Program
    • Location Based Reporting
    • Online Lodging Marketplace
    • Model City Tax Code
      • Appendices
      • City Profiles
      • Index of Articles and Regulations
      • MCTC Archive
      • Municipal Tax Code Commission
        • MTCC Updates
        • MTCC Members
        • MTCC Past Agendas & Minutes
      • Municipal Tax Hearing Office Archive
      • Options by City
      • Rate and Code Updates
    • Motor Vehicle Sales
    • Nexus Program TPT
    • Reporting Guide
    • Residential Rental Guidelines
      • For Property Owners
      • For Property Management Companies (PMC)
      • Residential Rental Licensing Requirements and Processes
      • What Residential Rental Income is Taxable?
    • Retail Sales Subject to TPT
      • Arizona-Based Sellers without Storefront
      • In-State Sellers
      • Out-of-State Sellers
        • Economic Threshold
        • FAQ - Remote Sellers and Marketplace Facilitators
        • Filing Requirements
        • Liability Relief
        • Licensing and Renewal Requirements
        • Marketplace Facilitators/Remote Sellers Tax Rates
    • Special Events, Craft Shows & Trade Shows
      • Promoters of Special Events
      • Vendors
    • Tax Factoring
    • Tax Rate Table
    • TPT Audit
    • TPT License
      • Applying for a TPT License
      • AZTaxes User Access
      • License Fees, Cancellation and Other Changes
      • Renewing a TPT License
      • TPT Filing Frequency
      • Updating a TPT Account
    • TPT Exemptions
    • TPT Forms
    • TPT Rulings, Procedures and Notices
    • TPT Refund
    • TPT Updates
    • Use Tax Direct Payment Permit Holders

Exclusion of combined taxes from gross income; itemization; notice; limitations

Print Friendly, PDF & Email
Section Number: 
250.00

*This information is for Model City Tax Code purposes only

MCTClogo.png

Model City Tax Code

 

a) When tax is separately charged and/or collected. The total amount of gross income shall be exclusive of combined taxes only when the person upon whom the tax is imposed shall establish to the satisfaction of the Tax Collector that such tax has been added to the total price of the transaction. The taxpayer must provide to his customer and also keep a reliable record of the actual tax charged or collected, shown by cash register tapes, sales tickets, or other accurate record, separating net transaction price and combined tax. If at any time the Tax Collector cannot ascertain from the records kept by the taxpayer the total or amounts billed or collected on account of combined taxes, the claimed taxes collected may not be excluded from gross income, unless such records are completed and/or clarified to the satisfaction of the Tax Collector.

(1) Remittance of all tax charged and/or collected. When an added charge is made to cover City (or combined) Privilege and Use Taxes, the person upon whom the tax is imposed shall pay the full amount of the City taxes due, whether collected by him or not, and in the event he collects more than the amount due he shall remit the excess to the Tax Collector. In the event the Tax Collector cannot ascertain from the records kept by the taxpayer the total or amounts of taxes collected by him, and the Tax Collector is satisfied that the taxpayer has collected taxes in an amount in excess of the tax assessed under this Chapter, the Tax Collector may determine the amount collected and collect the tax so determined in the manner provided in this Chapter.

(2) Itemization. A taxpayer, in order to be entitled to exclude from his gross income any amounts paid to him by customers for combined taxes passed on to the customer, must prove that he has provided his customer with a written record of the transaction showing at a minimum the price before the tax, the combined taxes, and the total cost. This shall be addition to the record required to be kept under subsection (a) above.

(b) When tax has been neither separately charged nor separately collected. When the person upon whom the tax is imposed shall establish by means of invoices, sales tickets, or other reliable evidence, that no added charge was made to cover combined taxes, the taxpayer may exclude tax collected from such income by dividing such taxable gross income by 1.00 plus a decimal figure representing the effective combined tax rate expressed as a fraction of 1.00.

 

< Back to Index Articles and Regulations

Arizona
Department of Revenue
  • Contact Us
    • Report an AZTaxes Issue
    • Report a Web Issue
    • FAQs
    • Locations and Services
    • Mailing Addresses
    • Customer Satisfaction Surveys
    • Report Tax Fraud
Arizona Department of Revenue
(602) 255-3381
1600 West Monroe Street
Phoenix, AZ 85007
  • facebook
  • twitter
  • linkedin
  • Subscribe for Updates
  • Site Map
    • Forms
    • Where's My Refund?
    • AZTaxes.gov
  • News & Notices
  • Report Tax Fraud
  • Privacy
  • Accessibility
  • Careers