I use a transaction privilege service tax return from the state and I am wondering whether or not I need to have a city business license. I live in Scottsdale, AZ and work out of my home, but I don't sell anything in Scottsdale - just through the Internet.
I had a business license through the city before and then cancelled when I briefly relocated to Phoenix. Now I am back in Scottsdale and I still keep a lot of my supplies and materials in storage, which is located in Phoenix.
I'd prefer not to deal with Scottsdale if possible - their business licenses are expensive and the city can be rather intrusive.
Here's a link to their website about the licenses: https://eservices.scottsdaleaz.gov/eservices/licenseguide/Default.aspx
I took their little survey and still can't tell whether I need one or not. If so, is there a way I can legally circumvent this?
Any input would be greatly appreciated.
Since they have the final say, I'd say they have the first answers.
It varies from town to town I'm sure, but since our business is located within the city of Kodiak and we're conducting our business from there, we pay a 6% sales tax even when dealing clients elsewhere. Occasionally we have to explain it to the clients, but usually we don't. Most don't blink and accept it as a matter of doing business, even overseas clients. When we started to apologize for it on a large bill to a client in England, she laughed and said "It's a pleasure not to pay the VAT."
If it's a matter of the inconvenience for you, that's something to take up with the city and not your clients. Most won't want to hear about your blues. We file quarterly, including a form statement for our transactions and a payment for taxes collected. Not really a big deal at all.
Posted by Lee Daniels on October 18, 2010 at 6:33 PM
Michael,
I also live in Arizona and have a Transaction Privilege license from Tucson.
It is mandatory for doing shows according to the arts organizations and sponsor of the few shows and galleries that I do. They do ask and if they don't, they will state it is a requirement.
You do not need it for internet sales (although you do need to charge tax for Arizona transactions), but if you are doing shows you will need to have the license.
Hope this helps,
Lee
Posted by Buck Ward on October 18, 2010 at 7:28 PM
Both the city and the county where my business is located require me to pay an annual business tax. Until recently, these were called occupational licenses. If I do not pay the tax, I am in violation of the local zoning ordinances. If they discover that I am operating a business at my location, they can cite me with a code violation and ultimately access penalties. The amount of the penalty becomes a lien against the property, which I own, just as if I had not paid the property taxes.
I don't know your local situation, but I suspect it is somewhat similar. The license fees are simply taxes, a source of revenue for the local governments. You don't need to pay taxes, but there can be consequences.
Michael, years ago I placed a business card for my photographic prints for purchase at a car wash here in town. Within days I received a call from the City wanting my business license number. DUH......said I. I told them what I was involved in and they demanded I buy a license. I said I would stop immediately before I'd pay for a license.
Three or four days later I received a call from a perspective buyer. He wanted to line his house with my prints. Ya right. It was a total setup to try and see if I would say I'd sell to the person. I had only placed the one card on the bulletin board and it had been taken by the City person. How did this person find my number, it's unlisted and this was really pre-internet days for any sales.
Again, this was very many years ago now and some time later I did acquire a license for doing local trade where I live. My tax person said it was needed for him to keep things in line for tax deductions, etc. The license really is nothing more then a local tax you pay annually on gross sales, at least here locally anyway.
My city (Long Beach, CA) tracked me down and came after me with an order to pay for their exorbitant license ($200 annually).
If you are operating an official business from your home, your city will likely track you down and make you pay.
Posted by Lon Overacker on October 21, 2010 at 2:59 PM
Michael,
Can't hide from the government - they will find you. I've been receiving notices from my city for a few years now and I've pretended that I never got them... but it's going to catch up to me and I need to take care of it.
In my Town a business license cost $25 per 4 years. Then you pay a quarterly tax based on what you claim to have in business assets. In addition to my photography business, I'm a Licensed Contractor/Carpenter. Now, when you talk about licensing it's $300 every 2 years to the state. Now I need to be certified by the EPA. That set me back $1200 plus $375 evey 5 years. Insurance $1200 year. I need to pay these fees whether I work or not! I can make some money with photography so I gladdly pay $25 for my business license. The state issued me my sales tax cerificate for free. Well almost free. I need to charge 6.25% for any in state sales
Posted by Mel Ladewig on October 27, 2010 at 9:58 AM
In my town, there is a provision for temporary sales tax licenses. But we'll collect sales tax from you when due whether you're licensed or not. I work in IT and sales tax is one of my customers, so I'm familiar with their business processes. That said, if you're not selling to any customers in Scottsdale and preferably Arizona, then it is normally not your responsibility to collect and report sales tax in the state where the sale occurred.
Discussion
8 repliesI had a business license through the city before and then cancelled when I briefly relocated to Phoenix. Now I am back in Scottsdale and I still keep a lot of my supplies and materials in storage, which is located in Phoenix.
I'd prefer not to deal with Scottsdale if possible - their business licenses are expensive and the city can be rather intrusive.
Here's a link to their website about the licenses: https://eservices.scottsdaleaz.gov/eservices/licenseguide/Default.aspx
I took their little survey and still can't tell whether I need one or not. If so, is there a way I can legally circumvent this?
Any input would be greatly appreciated.
Thanks for your time. I really appreciate it.
Michael
It varies from town to town I'm sure, but since our business is located within the city of Kodiak and we're conducting our business from there, we pay a 6% sales tax even when dealing clients elsewhere. Occasionally we have to explain it to the clients, but usually we don't. Most don't blink and accept it as a matter of doing business, even overseas clients. When we started to apologize for it on a large bill to a client in England, she laughed and said "It's a pleasure not to pay the VAT."
If it's a matter of the inconvenience for you, that's something to take up with the city and not your clients. Most won't want to hear about your blues. We file quarterly, including a form statement for our transactions and a payment for taxes collected. Not really a big deal at all.
I also live in Arizona and have a Transaction Privilege license from Tucson.
It is mandatory for doing shows according to the arts organizations and sponsor of the few shows and galleries that I do. They do ask and if they don't, they will state it is a requirement.
You do not need it for internet sales (although you do need to charge tax for Arizona transactions), but if you are doing shows you will need to have the license.
Hope this helps,
Lee
I don't know your local situation, but I suspect it is somewhat similar. The license fees are simply taxes, a source of revenue for the local governments. You don't need to pay taxes, but there can be consequences.
Three or four days later I received a call from a perspective buyer. He wanted to line his house with my prints. Ya right. It was a total setup to try and see if I would say I'd sell to the person. I had only placed the one card on the bulletin board and it had been taken by the City person. How did this person find my number, it's unlisted and this was really pre-internet days for any sales.
Again, this was very many years ago now and some time later I did acquire a license for doing local trade where I live. My tax person said it was needed for him to keep things in line for tax deductions, etc. The license really is nothing more then a local tax you pay annually on gross sales, at least here locally anyway.
If you are operating an official business from your home, your city will likely track you down and make you pay.
Can't hide from the government - they will find you. I've been receiving notices from my city for a few years now and I've pretended that I never got them... but it's going to catch up to me and I need to take care of it.
Lon