Arizona Defines ‘Substantial Nexus’ for Out-of-State Businesses Under TPT Rules

• The Arizona Department of Revenue has issued a ruling on transaction privilege tax
• The ruling explains how Arizona determines if an out-of-state business has substantial nexus for tax purposes
• Businesses do not need a physical location in Arizona to be subject to the transaction privilege tax
• Out-of-state businesses can be taxed if they engage in taxable activities within Arizona and have substantial nexus by physical presence
• Remote sellers and marketplace facilitators can be subject to the tax if they have economic nexus, defined as annual gross proceeds or income from Arizona over $100,000
• The ruling includes examples of activities that would establish physical or economic nexus, making a business liable for the transaction privilege tax

Source: allynintl.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---