What is transaction privilege tax?
The Arizona Transaction Privilege Tax (TPT) is commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Arizona transaction privilege taxes are imposed on persons engaged in certain business classifications, including retail sales. What this means is that various business activities are subject to state, county and/or city transaction privilege tax (TPT). Please refer to www.azdor.gov for more information.
What is a Tax Jurisdiction Code?
A jurisdiction is the taxation authority that imposes the tax. An area, city, municipality, county, country with its own distinct regulations for taxation is a tax jurisdiction. Each jurisdiction is identified by a tax jurisdiction code.
Why does the City of Phoenix require a Tax Jurisdiction Code? I am just registering as a vendor to supply goods and/or services.
The city of Phoenix is not a tax-exempt entity, therefore we strive to maintain the accuracy of the taxes paid to vendors. The tax jurisdiction is the only way for our financial system to maintain that accuracy.
What Tax Jurisdiction Code should I choose when registering for procurePHX?
When registering for procurePHX, please select your local taxing jurisdiction to which your business reports and files taxes. Most times, this will be city of the business' place of business where the transaction takes place. If your business has more than one location, please indicate the taxing jurisdiction for the location for which you have registered.
For example, if your business operates within Phoenix and the transactions occur in Phoenix, then choose the Phoenix tax jurisdiction. The Phoenix jurisdiction also accounts for the state and county taxes to calculate the total tax rate.
If the city does not collect local taxes you may not see it listed. In this case select the county as your tax jurisdiction.
Please note if you select "Use Tax-No State or Phoenix License" as your tax jurisdiction, you are implying that your business has no nexus within the state of Arizona. In this case, the city of Phoenix is required to accrue and remit Use Tax to the State of Arizona for taxable transactions. Although no action is required on your part, the city of Phoenix will review all invoices to ensure no taxes are being invoiced.
