Beginning in September 2024, Arizona revised its transaction privilege tax (TPT) laws. These changes specifically apply to individuals under the age of nineteen who do business in Arizona.

Anyone who is under nineteen years old and operates a business occasionally isn't required to have any license or permit from a city or county to operate a business. The Arizona Department of Revenue (ADOR) recommends that anyone with questions about local regulations contact their local city or county.

The second change involves anyone under nineteen years old who operates a business regularly. If that business has revenue of less than $10,000 for a calendar year, the individual doesn't need to have a TPT license. They also don't have to pay any special district transaction privilege taxes.

Cancelling TPT License

For individuals under nineteen years old who already had a TPT license, if their business generates less than $10,000 in a calendar year, they may cancel that TPT license beginning Oct. 1.

The responsibility falls on the business owner or the adult listed on their TPT license to cancel it. Individuals who fail to cancel the TPT license in time may face penalties and fees. This is the case even though they're no longer required to have a TPT license.

These laws don't affect anyone under the age of nineteen who has a business that generates more than $10,000 in a year. In these cases, the business will still be required to have a TPT license.

One question that the new law doesn't address is the timeline for filing for a TPT license if a business's gross income exceeds $10,000 in a calendar year. It also doesn't explicitly state any deadlines for filing for a TPT license once an individual ages out of this rule.

Individuals should also keep in mind that if a business owner is a minor, an adult must also be on the TPT license.

Get Help From a Certified Tax Law Specialist

If you have questions about new tax laws, including the new TPT license requirements, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.