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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
online lodging marketplace; local taxation
Purpose
Requires taxes imposed on online lodging marketplaces and online lodging operators to be uniform with all other taxpayers engaging in the same activity.
Background
Laws 2016, Chapter 208 allowed for the voluntary registration of online lodging marketplaces with the Arizona Department of Revenue (ADOR) for the payment of taxes levied by the state and local governments with respect to online lodging transactions. An online lodging marketplace is defined as providing a digital platform through which an unaffiliated third party, such as an online lodging operator, receives compensation for renting accommodations to an occupant. An online lodging operator is a person who rents lodging to an occupant, including a transient, through an online lodging marketplace (A.R.S. § 42-5076).
Online lodging marketplaces that are registered with ADOR pay a transaction privilege tax (TPT) levy of 5.5 percent (A.R.S. § 42-5010). Online lodging marketplaces must also report the taxes monthly and remit the aggregate total amounts for each of the respective taxing jurisdictions. Additionally, the state shall not require a list of individual online lodging operators to be provided by registered online lodging marketplaces (A.R.S. § 42-5014).
Laws 2018, Chapter 189 required, beginning on January 1, 2019, online lodging marketplaces to register with ADOR for a TPT payment license to pay the state or any subdivision thereof the taxes due from affiliated online lodging operators.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the city, town or other taxing jurisdiction tax imposed on online lodging marketplaces and online lodging operators to be uniform with all other taxpayers engaging in the same activity.
2. Specifies that a city, town or other taxing jurisdiction may levy a TPT or sales, use, franchise or other similar tax or fee on an online lodging marketplace from any activity subject to tax under the Model City Tax Code with the tax base for an online lodging marketplace being limited to gross proceeds of sales or gross income derived from the business measured by the total amount charged for an online transient lodging transaction.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date.
House Action
WM 2/20/19 DPA 10-0-0-0
3rd Read 3/6/19 60-0-0
Prepared by Senate Research
March 11, 2019
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