We’ve compiled some of the most frequently asked questions (FAQs) that City staff receives from customers about tax and licensing agreements when doing business in Chandler.
A TPT License is a Transaction Privilege Tax License commonly referred to as a sales tax, resale, wholesale, vendor or tax license.
All businesses operating in Chandler conducting taxable activity or that have use tax obligations must obtain a Transaction Privilege Tax License through the State of Arizona Department of Revenue.
Any business that meets the Chandler definition of a “Specialty license” i.e. Bingo, Massage, Mobile Food Unit, Off-Track Wagering/Amusements, Transient Merchant, Peddlers, Canvassers and Solicitors, Auctioneers, Junk Dealer, Pawnbrokers and Secondhand Dealers, Sexually Oriented Business, Escort, and Liquor will need a license. License applications are available from the Tax and License office by calling 480-782-2280, coming into the customer service office at 175 S. Arizona Ave., Suite A, or by downloading the application online.
Transaction Privilege Tax is a tax on the privilege of doing business in the City. It is imposed on the business engaging in the taxable activity rather than on the customer. Some activities that are considered services are taxable, please contact us for specifics related to your line of business. The tax applies to the gross receipts of the business less specifically allowed exemptions and deductions. Privilege (sales) tax revenues are used to finance the cost of various City services, such as Police, Fire, Parks & Recreation, or Streets.
License applications are available from the State of Arizona Department of Revenue, visiting the ADOR customer service office at 1600 West Monroe Phoenix, AZ 85007, or go online to go to AzTaxes.gov. The license application should be submitted with the appropriate annual license fee, currently $2 for most businesses. For businesses in a commercial location an Application for Certificate of Occupancy – Tenant Occupancy must also be completed and submitted. If the business is a home-based business, the Application for Zoning Clearance, Home Business is required.
Transaction Privilege Tax Licenses expire on December 31 of each year. You will be sent a renewal notice from ADOR to be completed and returned with the license renewal fee during the last portion of the calendar year.
You must notify ADOR in writing or online if you have location or mailing address changes.
- If your business is relocating a new license may be required. Contact the ADOR for the licensing specifics for your case.
- It is important to notify the ADOR office if your mailing address changes to ensure that you receive your tax returns and other documents sent by the ADOR
Yes. Privilege Tax Licenses are non-transferable. New owners of a business must apply for a new privilege tax license. Contact ADOR at 602-255-3381 or go to AZTaxes.
Yes. Privilege Tax Licenses are non-transferable. New owners of a business must apply for a new privilege tax license. Contact ADOR at 602-255-3381 or visit AZTaxes.
Examples of ownership changes include changing from sole ownership to a partnership, corporation or limited liability company (LLC); changing from a partnership to a corporation or LLC; addition or deletion of partners of a partnership; ownership of property changed to a trust; a corporation change requiring a new Federal ID number and any time there is a change in responsible parties involved in doing business together.
You must notify ADOR in writing if your business has been closed or sold so that your license can be cancelled. The notice of cancellation must include the reason for cancellation and the effective date. Any time a business activity ceases, or ownership of the business changes, the final tax return is due within 15 days from the effective date of the change.
Tax returns must be filed for all reporting periods even if there was no taxable activity.
The city’s privilege tax is computed on your gross receipts. “Making a profit” and “expenses” are applicable to income tax, but not Transaction Privilege Tax. Expenses are a cost of doing business and are not deductible in most cases. The tax is imposed on gross receipts less specifically allowed deductions and exemptions.
Yes. Before purchasing any business, you should require the seller to provide a “Letter of Good Standing” from the Arizona Department of Revenue. This document states there is no tax amount outstanding as of the date of issuance by the taxing jurisdiction.
It is unlawful (a crime) for any person knowingly or willingly to refuse to make a return or fail to remit the full amount of any tax or penalty and interest. Chandler Tax Code Section 62-580: Criminal Penalties.
It is the responsibility of the business to remit transaction privilege tax. Whether you collect it from your customers or not, the tax liability for all taxable business conducted in City of Chandler must be remitted.
Privilege (sales) taxes go to the General Fund and are used to support general operations and provide services to citizens. Get more general tax information.
Sales to most non-profit organizations are not exempt from tax. There is an exemption for sales to certain qualifying health care organizations. These organizations should be able to supply a copy of a letter from the Arizona Department of Revenue in support of their exemption.
A deduction is allowed for “sales for resale.” These are sales to another licensed merchant who is purchasing goods to be sold to their customers. To claim this deduction a signed exemption certificate should be obtained listing the purchaser’s city and state sales tax numbers, the business name, the nature of the business, and a statement that the goods are being purchased for resale in the course of business. This certificate should be reasonable and support the deduction.