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Beyond financial numbers, one of the confusing parts of navigating both the federal and Arizona tax systems is the abundance of acronyms and numbers. Two examples of these acronyms are TPTs and EIN. Many businesses and organizations will have both. They each serve an important but different purpose.

Most businesses in Arizona require a transaction privilege tax (TPT) license to operate. Where a business is located in Arizona, however, can affect its overall tax rate. Each local government is responsible for setting its local rates. This is why county and city TPT rates can vary.

To avoid being convicted of tax evasion, taxpayers need to report income related to all activities. This is regardless of the activity’s legality. 

The Foreign Account Tax Compliance Act (FATCA) was passed to reduce tax evasion through offshore accounts and other financial interests outside of the United States. The law involves anyone who pays taxes, including foreign nationals and foreign governments required to pay taxes in the U.S. FATCA certification is a way to ensure taxpayers are complying with these new requirements.

The Model City Tax Code's (MCTC) twin goals are to encourage uniformity of local taxes, which benefits businesses, while still respecting each city and town’s right to determine its tax code.  

With the rise of independent contractors as part of the workforce, businesses may be unsure of when a worker qualifies as an employee and when they qualify as an independent contractor. For tax purposes, failing to classify a worker properly can lead to penalties and fines.  

Cryptocurrency remains an evolving area of law for taxes. A 2023 ruling answered only one of the many questions that surround the relationship between cryptocurrency and taxes. 

Arizona requires remote sellers to collect and remit TPT when they reach certain transaction thresholds. This law covers both remote sellers and marketplace facilitators. 

Retail businesses that sell medical marijuana and adult use recreational marijuana must pay the transaction privilege tax (TPT). Unlike other retail businesses, marijuana dispensaries must first apply for and receive a license from the Arizona Department of Health Services (ADHS). 

Peer-to-peer (P2P) platforms for car sharing are subject to the transaction privilege tax (TPT) in Arizona. The state defines a P2P platform as a business that enables individuals to rent a vehicle. If renting a car is a side gig, it’s unlikely to require a TPT license. If renting a car is an individual’s primary source of income, it may require a TPT license. 

The Streamlined Sales Tax Project (SSTP), also referred to as the Streamlined Sales and Use Tax Agreement (SSUTA), is an effort to simplify the collection of sales and use taxes in the United States. The goal of SSTP is to minimize differences between state tax systems. 

When an audit occurs parallel to civil and criminal investigations, it’s referred to as a reverse eggshell audit. In these cases, a criminal tax investigation is disguised as a civil audit, and taxpayers may not be immediately aware that their audit is part of a criminal investigation. 

In May 2023, the Third Circuit of the Court of Appeals held that intended tax loss should be used in sentencing calculations for tax crimes rather than actual tax loss. This means that, for sentencing purposes, a judge can consider what might have been lost if a defendant had been successful in their tax crime. 

When a business plans to shutter permanently, it will need to cancel its Transaction Privilege Tax (TPT) license. Not canceling a TPT license can lead to fines and penalties. 

Every year, the IRS publishes its list of the top tax scams known as the Dirty Dozen. The IRS publishes these to help taxpayers be aware of and, hopefully, avoid them.

April 15 is tax day in 2025. The majority of taxpayers file in the last month before the deadline, meaning the coming weeks are busy for tax professionals.

In the United States, all businesses are required to pay employment taxes. This means they withhold money from employees' paychecks and send it to the federal government. Businesses may use a variety of ways to avoid paying employment taxes. These are a few of the more common ways that employers attempt to avoid their tax responsibility. 

Each industry has its own TPT exemptions. Businesses should focus on Arizona’s industry-specific guidelines to determine if they fall under any exemptions. Some business transitions aren’t subject to Arizona’s Transaction Privilege Tax (TPT).

In Arizona, custom-built homes or other improved real estate may be subject to the state’s speculative builder tax. Sellers will fall under the tax when they either improve the property themselves or contract out for renovation or building services.

The speculative builder tax applies to the sale of improved properties in Arizona. Arizona exempts the sale of primary and vacation residences that meet certain criteria. 

Form 8300 deals with reporting cash payments that are over $10,000. The IRS requires that all businesses that receive over $10,000 in cash during a tax year must report it to the IRS.  

Section 163(j) limits deductions on business interest expenses. This limitation applies to all businesses with the exception of some small businesses.

During the pandemic, the federal government passed the Employee Retention Credit (ERC) program. Fraud and invalid claims forced the IRS to suspend the program in September 2023. A business can appeal a denial from the IRS.

Section 1202, or the Qualified Small Business Stock Exclusion (QSBS), allows shareholders of eligible businesses to realize capital gains without paying tax. The goal of this law is to increase and encourage investment in small businesses. There are certain criteria that the shareholder and business must meet to qualify under Section 1202.