The Arizona Department of Revenue collects the tax on behalf of the county and most cities; however, many of the larger cities in Arizona administer and collect their own privilege taxes. These cities are referred to as non-program cities. Sales in the non-program cities must be reported directly to the applicable city. The state and county taxes must still be reported and remitted to the state. Scottsdale, Ariz. Is a non-program city.
The State of Arizona has aggressively cut business taxes to lower the cost of doing business by offering:
- No corporate franchise tax
- No income tax on dividends from out-of-state subsidiaries
- No worldwide unitary tax
- No sales tax on manufacturing equipment
- 80 percent sales factor for corporate income tax, ramping up to a 100 percent option over time
Recent legislation has also reduced Arizona’s corporate income tax rate by 30 percent, reduced Arizona’s commercial property assessment ratio, and increased personal property tax exemptions by 15 percent.