Tax Compliance - Privilege (Sales) Tax


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Effective July 1, 2013 the Model City Tax Code was revised to broaden the exemption for certain related- party commercial leases. The Municipal Tax Code Commission approved this change in response to recent legislation.

What this means:
"The gross income on rental of commercial real property is exempt from privilege tax if the property is rented to affiliated companies, businesses, persons or reciprocal insurers in which either the lessor or lessee holds at least eighty percent (80%) of the voting shares of the affiliated corporation or of the other interests in the affiliated company, business or person."

Please note that this only applies to transactions beginning July 1, 2013 (Reporting period of 07/01/2013-07/31/2013 due to AZDOR by 08/20/2013) - prior transactions do not qualify under the law and were taxable.

Maricopa County commercial lease tax on these leases will remain taxable until September 13, 2013. You will need to continue to submit the MAR 013 category for the .005% tax through September 12, 2013 on the monthly reporting form (TPT-1).


Effective June 1st, 2013 the temporary STATE tax rate will expire. Beginning June 1, 2013 the STATE tax rate will be 6.3% - GILBERT rate stays the same at 1.5%. The total COMBINED rate will be 7.8% - down from 8.8%. Please refer to the State publication for detailed information on this change.

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Olsen, JohnTax Compliance ManagerFinance & Management(480) 503-6991
Jackson, KathleenTax Compliance AnalystFinance & Management(480) 503-6946
Kramar, LindaTax Compliance SpecialistFinance & Management(480) 503-6852
Bedsun, RobertTax Compliance AnalystFinance & Management(480) 503-6925