Jurisdictions in Arizona may opt for a tiered rate structure for single-item purchases over a certain dollar amount. Each jurisdiction sets the price in which the tiered rate structure goes into effect, and the tax rate levied on the single-item for their jurisdiction. The tiered rate may be placed on the price of the entire single-item or the portion over the price where the tiered rate structure goes into effect.
For cities in which tiered rates “single-item over” applies, the entire sale applies to the “single-item over” code/rate. Unlike “portion over,” any deductions amounts may be applied to the full amount of the sale. See filing examples.
For cities with “portion over” tiered rates, apply the regular retail code/rate to the amount up to the portion over amount. The portion over code/rate is then applied to the difference between over the “portion over” amount and the total price. Any deduction amounts must be prorated. See filing examples.
To determine what constitutes a “single-item” under the retail classification:
- A single-item does not refer to multiple transactions on a single invoice.
- A single-item does not include taxes, add-ons or sales price adjustments.
- A single-item does not include other related transactions (e.g., the sale price of a car, plus the extended warranty and tax).
- If a retailer does not break down related costs but instead invoices one lump sum, this entire amount is considered the single-item and subject to the application of the tiered rate calculation.
- If the invoice is an itemized invoice, the tiered rate application must be calculated separately on each individual item.