Sales and Use tax laws are complex in the state of Arizona. They are very different from other states and do not affect every business in the same way. Residents starting new businesses and those new to Chandler often have problems navigating local tax laws. If you have found it difficult to understand the Transaction Privilege Tax (TPT), you are not alone. Many business owners have found themselves with a tax problem in Chandler, AZ due to the TPT. Here are a few important facts about the TPT that can help you get a basic understanding of the law.
What is the TPT?
The Arizona Transaction Privilege Tax is often called a sales tax, but technically it is not determined by sales. This can be confusing for people interested in starting a business or business owners who are moving to the area. The tax is usually passed on to the consumers who purchase goods and service of a business, which is why it is commonly confused for a sales tax. However, it is the responsibility of the company to pay the tax, whether they pass it on to the consumer or not.
Important Facts About the TPT
There are some important things business owners need to understand about the TPT when applying for a tax license in Arizona. Here is a quick look at the TPT:
- NOT a sales tax, instead it is classified as a tax for the privilege of doing business in Arizona
- Affects businesses with retail sales at the state and possibly county and city level
- Counties and cities that collect the tax independently are called “non-program cities”
- The state and non-program cities differ in the types of businesses affected by the TPT
The last point often causes issues for businesses in Chandler. Even established residents need help understanding the TPT differences between the state and local municipality.
Most business owners find a knowledgeable tax service company that can navigate Arizona tax laws. Your business can get back on track by understanding a few basic facts about the TPT and getting expert help with tax resolution in Chandler, AZ.
If you are interested in or have already decided to sell your business, there are a number of things to do to prepare. They can all take time to properly execute. Being deliberate and not rushing the sales process will work to your advantage. At the least, you will need an accountant in Chandler AZ to help you gather your books and one to give an impartial valuation.
Get a Valuation
One of the most important things to do if you are contemplating selling your business is to get an impartial valuation from an outside source. This can help set realistic expectations and be a good barometer for gauging offers. There are a number of companies that provide business valuation services including banks, business brokers and accountants.
Have Your Books in Order
Having your company’s books in order is essential when selling your business. Many buyers will want to see a minimum of three years of financial statements. If you have them formally prepared by an accountant or bookkeeper in Chandler AZ, rather than creating internal statements, it may require less due diligence for prospective buyers and leave a more favorable impression.
Establish an Advisory Team
Selling a business can be challenging and having advisors may help the process. A lawyer, an accountant in Chandler AZ and an intermediary, to represent you in negotiations, are some suggestions. It is not uncommon for owners to get emotional when selling their businesses, particularly if they are the founders and have worked there for many years. Having people advising you who can be objective may contribute to a more successful outcome.
Make a Positive Impression
Be as organized and professional as possible when meeting with any prospective buyers. Chaos and confusion at the office or any of your business facilities can be an indication of a poorly run company, and may turn-off buyers.
Have Good Reasons for Selling
Many buyers are interested in knowing why owners want to sell their businesses. Think through your reason for selling and be ready to elegantly articulate them.
Selling your business is a big step. Make sure you have the help you can trust to provide the accounting services you need if you are contemplating doing so.
Even though tax season has come and gone, it will be here again before you know it and you may find yourself in need of professional tax preparation in Chandler AZ. Whether you’re an individual tax payer or business owner, there are certain practices that you should put into action in order to lower your chances of being audited by the IRS
Pay Attention to Your Deductions
Qualifying for deductions is a wonderful thing, but the IRS might start to get suspicious if your debt-to-income ratio is a bit too high. Make sure you’re only claiming deductions that are truly valid for the tax year. It’s best that you consult an experienced tax preparer in Chandler AZ and double check to make sure that you actually qualify for your deductions.
Make Sure Your Tax Filings Reconcile
All of your tax documents, returns, and related materials should have the same information on them before you send them off to the IRS, Social Security Administration, or your state. Employees should double check to see that their Form 1040 matches the Form W-2 that their employer files. Business owners need to ensure that their quarterly filings match their annual tax returns. Never take any chances when it comes to your taxes or the IRS.
File on Time
Filing one or more tax returns late is another reason that the IRS may audit you, and that’s especially true for high-income employees. Even though Tax Day isn’t until April 15th, it’s best to pretend that it’s a week earlier to give yourself plenty of time to complete your tax return and to make sure it’s received by the IRS on time.
For more tips on how you can lower your chances of being audited by the IRS, contact an experienced professional. Tax laws change all the time and can be difficult for individuals and businesses to keep up with. That is why having a professional tax team on your side can make all the difference.