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Tax Revenues Up Significantly

Arizona’s Department of Revenue is reporting increases in sales for the past month with collections of sales tax at more than   $3.6 billion.  The ADR’s Elaine Smith tells Flagstaff Business News the figures are a healthy increase from the previous year. Significant gains were reported in car sales and general retail merchandise.

MARCH 2011 Transaction Privilege and Use Tax Collections1 Major Categories

March 2011 $369,860,450

March 2010 $345,549,254

(Smith says last year’s figure seems higher than it should have been because of an anomaly in reporting of communications revenues.)

The values shown are based on the 5% state rate and 301 Education Tax, the 1% Temporary Tax or any county level taxes. Total Collections includes the remaining categories. The General Fund total is the portion of the Total Collections that are retained by the state. Each category may contribute a different percentage to the state General fund.

The remainder of this document attempts to provide further information about the categories listed above. All of the remaining information is in the form of taxable sales.

1 Collections are reported at the 5% State base rate level. These collections INCLUDE collections in the pre-existing contract categories in place from June 01, 2010 through September 30, 2010.

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Source: Arizona Department of Revenue, Office of Economic Research and Analysis.

The categories above constitute the major contributions

do not include monies raised for the 0.6% PropositionTRANSACTION PRIVILEGE AND USE TAX

A MONTHLY REPORT FROM THE ARIZONA DEPARTMENT OF REVENUE

In general, the sector or industry data provided in this report is derived from general NAICS categories. When a Transaction Privilege taxpayer applies for a license with the Department they self assign or are assigned a NAICS (North American Industrial Classification System) code to describe their main business function. For example, an Auto Dealer would likely be assigned the code 441100 and a Grocery Store would be assigned 445110. Information about NAICS codes can best be found at the Bureau of the Census website at www.census.gov .

As this data is considered, it is important to remember the timeline for collecting and reporting Transaction Privilege Tax. Sales that occur and taxes that are collected in December are reported to DOR in January. Because the money and returns are due to DOR near the end of January, after taking some time to process and reconcile the information received, DOR reports on those sales in late February. So, taxes collected from December sales are sent to DOR in January and reported by DOR in February. Because DOR received the money in January, they are reported as January taxable sales.

For businesses with relatively small tax liabilities, money and returns may only be required on a quarterly or annual basis. Quarterly returns for March, June, September and December are due in April, July, October and January. Similarly, annual returns through December are due in January.

In these reports quarterly data will only be shown when reporting for the fiscal quarter is complete. FYXQ1 includes returns received by the Department in July, August and September. FYXQ2 includes October, November and December. FYXQ3 includes January, February and March. And, FYXQ4 includes April, May and June.

Big Contributors

Of all the components considered in the process over the past several years, the largest components are the Motor Vehicle Dealers, Miscellaneous Retail, and General Merchandise in the retail sector; Residential Construction in the contracting sector; Electric Utilities in the utilities sector; and the whole Restaurant and Bar sector. The charts below show how they have been performing in comparison to each other.

 

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