Tax & Licensing Frequently Asked Questions

Licensing
Who do I call for other licenses not handled by the Licensing Office?
Do I need a business license?
I am opening a booth at a trade show or craft show for just a weekend.  Do I need a license?
I was a sole proprietor but I have changed to a corporation, partnership, or limited liability corporation.  Do I need a new license?
What other licenses and permits are necessary for me to start my business?
What do I need to do if I want to sell on a street corner?
Who do I make my check out to?
Where do I send my application?
I already have a license from the Department of Revenue; do I also need one from the City of Mesa? 
Can I apply & pay online?
Can I suspend my tax license for a few months?   
 
Tax
Do I need to charge transaction privilege tax?
What if a merchant over collects the tax?
When are the tax returns due?
When are the tax returns mailed out to businesses?
Do I have to file a tax return if I had no taxable activity?
Are there any penalties for filing a tax return late?
Can penalties be waived?
May I deduct any of my expenses?
Are wholesale sales exempt from tax?
My customer has a 501(c)(3) designation (non-profit status).  Are they exempt from tax?
If I feel I overpaid tax on my return, how do I obtain a refund?
If I failed to claim an exemption with a merchant, how do I obtain a refund?
What is the difference between the transaction privilege tax and a sales tax?
I am opening a booth at a trade show or craft show for just a weekend.  Do I need to pay tax?
Are internet sales taxable?
If I didn’t know there was tax due on my business activity, am I still responsible for the tax?
What other situations are taxable?
How do I amend or correct a return?

Tax Collections
How do I contact my Revenue Officer?
What if I buy an existing business?  Could I be responsible for the previous owner(s) liability?
I received an Urgent Delinquent Tax Return Notice.  What do I do next?
When are tax returns due?
How do I calculate penalties and interest on a late return?
How do I change my reporting period or filing frequency from monthly to quarterly or annual?
Why was my Arizona State refund captured by the City of Mesa?
Why was my refund from another department applied to my accounts receivable balance on my Transaction Privilege (Sales) & Use Tax license or Transient Lodging Tax license?
Utilities advised me that I can’t reconnect my services and I was informed to contact Tax Audit & Collections.
My application for a specialty license was denied and I was informed to contact Tax Audit & Collections.
I tried to pull a permit at Building Safety and I was informed to contact Tax Audit & Collections.
Would the City of Mesa hold me personally liable for any debt owed by my business?
Why are there additional collections charges on my account?
What if I refuse to file and pay the transaction privilege taxes?
What if I didn't collect the transaction privilege tax from my customers?
How do I submit a Lien Payoff Request?
How do I get my lien released?
What should I do if a Revenue Officer comes to my door?
How do I change my business name?
 
Who do I call for other licenses not handled by the Mesa Licensing Office?
Please see our links page for information about other licenses such as:
       Arizona Tax License   Contractor's License
       Marriage License   Liquor License
       Driver's License   Massage Therapy License
       Vehicle Licensing  

Do I need a business license?
Mesa does not have a "business license" which encompasses all businesses.   The City of Mesa utilizes a transaction privilege tax license for all businesses that generate taxable income and some special licenses for certain activities such as liquor sales.  Some businesses do not need any Mesa license to operate in Mesa.  Please call us at (480) 644-2316 to ask whether your business requires a license.  Because we have a transaction privilege tax rather than a typical "sales tax," licenses are required for a broader range of activities.   Transaction privilege tax licenses are required to be posted in a conspicuous place within your business at all times.

I am opening a booth at a trade show or craft show.  Do I need a license?  Do I need to pay tax?
Selling at a trade show or craft show is subject to the same tax and license obligations as a retail store.  You must have a license and must pay tax on your sales.  If this is the only time you will be making sales in Mesa, you must obtain a temporary transaction privilege tax license.

I was a sole proprietor but I have changed to a corporation, partnership, or limited liability corporation.  Do I need a new license?
Yes.  When there is a change in business ownership, a new license is required.

What other licenses and permits are necessary for me to start my business?
The City of Mesa issues licenses for city transaction privilege tax and for some special activities. We also issue building permits, sign permits (.pdf file), occupancy permits (contact Development & Sustainability), and administer zoning laws.

Most businesses must also obtain a state transaction privilege tax license for purposes of reporting their state and county taxes.  There are numerous other requirements relating to state and federal regulatory agencies, the Internal Revenue Service, unemployment insurance, workman's compensation insurance, etc. that may affect your business.  The city staff cannot fully advise you of all the issues you may need to start your business.

What do I need to do if I want to sell on a street corner?
If you are not a vendor at a special event and wish to sell on a street corner then a Peddlers, Solicitors, and Transient Merchants license is required. The application & approval process can take from 4-6 weeks; sales are not permitted until approval is received.  

Who do I make my check out to?
Checks are made payable to the City of Mesa.  

Where do I send my application?
Mail must be sent to: City of Mesa PO Box 1466 Mesa, AZ 85211  

I already have a license from the Department of Revenue; do I also need one from the City of Mesa?
Businesses with taxable activity within the City of Mesa are required to have both the State tax license from the Department of Revenue and a tax license from the City of Mesa.  

Can I apply & pay online?
At this time City of Mesa does not have online filing capabilities.  

Can I suspend my tax license for a few months?
Tax licenses do not have the capability of being suspended or put on hold.

Do I need to charge transaction privilege tax?
The transaction privilege tax is imposed on the merchant rather than on the customer.   The business can choose whether to charge the tax separately or build it into their sales price.  Those businesses that build it into their sales price are allowed to compute or "factor" the tax for purposes of taking a deduction for transaction privilege tax collected.  Click here to see an example of "factoring" the tax.

What if a merchant over collects the tax?
Tax collected in excess of the tax rate must be remitted on your tax return.  The excess tax should be prorated to the city, county, and state proportionately to their tax rates.

When are the tax returns due?
Most tax returns are due on the 20th of the month following the month the sales occur.   Certain businesses with small tax liabilities are permitted to file quarterly or annually.

When are the tax returns mailed out to businesses?
Tax returns are printed on the 25th of each month and mailed before the end of the month.  Please allow adequate time for mail delivery before calling to have another return faxed or mailed to you.

Do I have to file a tax return if I had no taxable activity?
Tax returns must be filed for all filing periods even if there was no taxable activity.  You may fax a return to us which has no taxable activity.   (fax (480) 644-3999).

Are there any penalties for filing a tax return late?
Penalties are assessed for filing returns late.  The penalties increase when the delinquency extends for additional months.  Also there is interest and a late payment penalty for late payment of the tax even though the return may have been filed on time.  Penalties are computed as a percentage of the tax due for the period covered by the return. TPT interest rates (on DOR website)

Can penalties be waived?
Penalties for late filing or late payment may be waived under certain circumstances.  Interest charges may not be waived.  Requests for waiver of penalties must be submitted in writing together with any supporting facts and documentation.

May I deduct any of my expenses?
Expenses are a cost of doing business and are not deductible in most cases.  The tax is imposed on gross receipts less specifically allowed exemptions or deductions.

Are wholesale sales exempt from tax?
A deduction is allowed for "sales for resale."  These are sales to another licensed merchant who is purchasing them to resell to his customers.  If you claim this deduction you should obtain a signed exemption certificate from your customer listing his state transaction privilege tax number, his business name, the nature of his business, and a statement that the item is being purchased for resale in the course of business.  If this certificate is reasonable and supports the deduction, it is very good documentation in support of your deduction.

My customer has a 501(c)(3) designation (non-profit status).  Are they exempt from tax?
Sales to most non-profit organizations are not exempt from tax.  Such organizations are exempt on their sales to raise funds to further their exempt activities.  There is an exemption for sales to certain qualifying health care organizations.  These organizations should be able to supply a copy of a letter from the Arizona Department of Revenue supporting their exemption.

If I feel I overpaid tax on my return, how do I obtain a refund?
If you feel you have overpaid tax on your return, you should send us a letter asking for credit or for a refund.  The letter should include your business name and license number and the time period in which the overpayment occurred.  You should describe the nature of the overpayment and how we may contact you if we have questions.   Please enclose any supporting documentation that you feel is relevant.

If I failed to claim an exemption with a merchant, how do I obtain a refund?
The city will only refund tax to the party who paid it on their return.  You need to ask for a refund from the merchant from whom you made the purchase.  You will need to supply the merchant with an exemption certificate supporting the exemption that you are claiming.

What is the difference between the transaction privilege tax and a sales tax?
The transaction privilege tax is a tax on the privilege of doing business in the city.   It is imposed on the merchant rather than on the customer.  Also it is broader than a Sales Tax in that it taxes more than sales of tangible personal property.   Some activities which are services are taxable.  The tax applies to the gross receipts of the business less specifically allowed exemptions and deductions.

Are internet sales taxable?
Online businesses are responsible for tax just like store fronts. In most instances, sales within the State of Arizona are taxable to Mesa for any Mesa based businesses. Even if most of your sales are out-of-state or country a tax license is still required.  

If I didn’t know there was tax due on my business activity, am I still responsible for the tax?
Yes; it is the responsibility of a business owner to find out if tax is due on their business activity.  

What other situations are taxable?
Jet Fuel
Manufactured Buildings
Mining
Transporting for Hire
Timbering & Extraction Utility Services  

How do I amend or correct a return?
To file an amended return, make a copy of the original tax return you filed and need to change. Mark the top of the copy in blue or black ink "AMENDED RETURN." Cross out the incorrect information and write in the corrected information. Please re-sign and re-date form. Return a copy of the amended return for your files. Send a letter with your corrected copy explaining the reason for the changes addressed to City of Mesa, Tax Audit and Collections, P.O. Box 1466, Mesa, AZ 85211-1466.

How do I contact my Revenue Officer?
Questions about filing back transaction privilege tax returns or setting up payment arrangements contact the following by phone or click on the name to email us:

Melissa Gill, Sr. Revenue Collections Officer 480-644-3581
Greg Hess, Sr. Revenue Collections Officer  480-644-5734
Ivonne Machuca, Sr. Revenue Collections Officer 480-644-5473
Sam Samson, Sr. Revenue Collections Officer 480-644-2372
Tanya Spoon, Sr. Revenue Collections Officer 480-644-4568
Chad Kamp, Lead Revenue Collections Officer 480-644-3137
Patti Oskvarek, Revenue Collections Supervisor 480-644-3570

What if I buy an existing business?  Could I be responsible for the previous owner(s) liability?
If you purchased a business the purchaser can be held liable for payment on past due taxes pursuant to Tax Code Section 5-10-595 Collection of taxes when there is a succession in and/or cessation of business.  The purchaser should require proof that the taxes have been paid by having the former owner produce a Certificate of Compliance from the Tax Audit & Collections Department.

Related information:      Successor Liability      Certificate of Compliance Request Form

I received an Urgent Delinquent Tax Return Notice.  What do I do next?
DO NOT DISREGARD THE NOTICE.  READ and FOLLOW the instructions on the notice.

  • If you have received an Urgent Transaction Privilege (Sales) & Use Tax Notice this means tax returns have not been submitted to the City of Mesa.  A return must be filed for each period listed on the notice in which there is a tax liability.
  • Complete the missing returns and mail them in with payment. If you do not have the returns click on Transaction Privilege (Sales) & Use Tax Return.
  • If you have no taxable income circle the periods and mail in the form.  Sign, date and include your telephone number in case there is a question the staff needs answered.
  • If you need assistance, contact the Revenue Officer listed on the notice.

When are tax returns due?
Tax returns are due on the 20th of the month following the reporting period.

  • Postmarked dates are not honored by the City of Mesa, and are not considered evidence of timely filing.
  • Before filing your return, check the amounts recorded by type of income for each line item as follows:
    • Itemized deductions equal the total deductions recorded.
    • Taxable income equals gross income less total deductions.
    • Tax due is equal to the amount obtained by applying the preprinted tax rate to the taxable income amount.
    • Total tax due equals tax due plus any excess tax collected.

How do I calculate penalties and interest on a late return?  
   PENALTIES:

  • Failure to File - A penalty of 5% of the tax due will be assessed for each month, or fraction elapsing between the delinquency date of the return and the date on which it is filed.  Filing your return on time, whether or not you pay the tax due, will avoid the late filing penalty.
  • Failure to Pay - A penalty of 10% of the unpaid tax will be assessed if the tax is not paid timely.
  • Total Penalty - Total penalties assessed will not exceed 25%.  

INTEREST: Mesa's interest rate is the same as the State rate and continues to accrue until taxes are paid. Interest rate tables are available on the Arizona Department of Revenue website. Interest may NOT be waived by the Tax Collector.          

How do I change my reporting period or filing frequency from monthly to quarterly or annual?
You must report each month. After six (6) months, you may request to report quarterly if your taxable income does not exceed $50,000 per year, or report annually if your taxable income does not exceed $5,000 per year. It is your responsibility to notify the City to adjust your reporting frequency should your taxable income exceed the allowable limits. Penalties will be assessed for failure to make this adjustment. For proper filing all returns must show gross receipts, itemized deductions, be signed and dated. If you have no taxable activity for a reporting period a report must be submitted showing no tax owed.

  • Please send a written request to the Licensing Office to change your filing frequency.  You may submit this request to Licensing Office P.O. Box 1466 Mesa, AZ 85211-1466 or via email at Licensing.Info@mesaaz.gov.    
  • To be approved, you must be current on your license and not have any delinquencies or Accounts Receivable balance due on your license before you can send a request.
  • If your business is in construction/contracting, you may qualify as a quarterly filer.  Annual filing is not available for construction/contracting businesses.   

Why was my Arizona State refund captured by the City of Mesa?
HOUSE BILL 2236 AN ACT AMENDING SECTION 42-1122, ARIZONA REVISED STATUTES; RELATING TO TAX REFUNDS

Under the provisions of A.R.S. 42-1122 Arizona Income Tax refund due a taxpayer may be applied against any delinquent indebtedness owed the City of Mesa. A collection fee of $9.00 will be charged.  The amount of refund amount held less the $9.00 will be applied against the debt owed.

Your State Income Tax refund shall be applied against your debt unless you submit either a written request for review, or proof that an appeal has been filed with City of Mesa Tax Audit & Collections within 30 days of the date of notice.  The request for review must be filed at the following at City of Mesa, Tax Audit & Collections P.O. Box 1466 Mesa, AZ 85211-1466, and must specifically state the reason(s) the debt does not exist or is incorrect.  The basis for the request for review shall not include the validity of the claim if its validity has been established at an agency hearing or by final administrative decision made in accordance with the law.  

For more information: http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/42/01122.htm&Title=42&DocType=ARS

Why was my refund from another department applied to my accounts receivable balance on my Transaction Privilege (Sales) & Use Tax license or Transient Lodging Tax license?
Under the provisions of the City of Mesa Collection Code Section 1-32-100. SINGULARITY OF DEBT; SET-OFF:

A DEBT OWED BY A PERSON TO ANY CITY DEPARTMENT OR AREA OF OPERATION SHALL BE SUBJECT TO SET-OFF AGAINST ANY CREDIT, REFUND, DEPOSIT OR PAYMENT OWING TO SUCH PERSON BY THE SAME OR ANY OTHER CITY DEPARTMENT OR AREA OF OPERATION.  

Utilities advised me that I can’t reconnect my services and I was informed to contact Tax Audit & Collections.   
Under the provisions of the City of Mesa Collection Code Section 1-32-200, you may reconnect services once all debt is paid.  Please contact Tax Audit & Collections.  

Collection Code Section 1-32-200. LIMITATIONS ON OBTAINING NEW LICENSES, SERVICES OR BENEFITS UNTIL DEBT IS PAID.  

ANY PERSON WHO HAS A CURRENT DEBT RELATED TO ANY OPEN OR CLOSED ACCOUNT MAINTAINED OR FORMERLY MAINTAINED WITH THE CITY SHALL BE INELIGIBLE TO RECEIVE ANY NEW OR ADDITIONAL LICENSES, SERVICES OR BENEFITS FROM THE CITY UNTIL SUCH DEBT HAS BEEN RESOLVED TO THE SATISFACTION OF THE CITY

My application for a specialty license was denied and I was informed to contact Tax Audit & Collections.  
Under the provisions of the City of Mesa Collection Code Section 1-32-200, your application may be approved for a specialty license once all debt is paid.  Please contact Tax Audit & Collections.  

Collection Code Section 1-32-200. LIMITATIONS ON OBTAINING NEW LICENSES, SERVICES OR BENEFITS UNTIL DEBT IS PAID.  

ANY PERSON WHO HAS A CURRENT DEBT RELATED TO ANY OPEN OR CLOSED ACCOUNT MAINTAINED OR FORMERLY MAINTAINED WITH THE CITY SHALL BE INELIGIBLE TO RECEIVE ANY NEW OR ADDITIONAL LICENSES, SERVICES OR BENEFITS FROM THE CITY UNTIL SUCH DEBT HAS BEEN RESOLVED TO THE SATISFACTION OF THE CITY.  

I tried to pull a permit at Building Safety and I was informed to contact Tax Audit & Collections.   Under the provisions of the City of Mesa Collection Code Section 1-32-200, your permit may not be issued until all debt is paid.  Please contact Tax Audit & Collections.  

Collection Code Section 1-32-200. LIMITATIONS ON OBTAINING NEW LICENSES, SERVICES OR BENEFITS UNTIL DEBT IS PAID.  

ANY PERSON WHO HAS A CURRENT DEBT RELATED TO ANY OPEN OR CLOSED ACCOUNT MAINTAINED OR FORMERLY MAINTAINED WITH THE CITY SHALL BE INELIGIBLE TO RECEIVE ANY NEW OR ADDITIONAL LICENSES, SERVICES OR BENEFITS FROM THE CITY UNTIL SUCH DEBT HAS BEEN RESOLVED TO THE SATISFACTION OF THE CITY.

Would the City of Mesa hold me personally liable for any debt owed by my business?  
Yes, under the provisions of the City of Mesa Collection Code Section 1-32-300:  

Collection Code Section 1-32-300. PERSONAL LIABILITY; PRESUMPTIONS  

(A)  EVERY PERSON WITH A DUTY, AT ANY TIME, TO ACCOUNT FOR AND PAY OVER ANY TAX OR OTHER AMOUNT OWED THE CITY, EVERY PERSON WHO HAS CONTROL OR SUPERVISION OVER THE PAYMENT OF ANY TAX OR OTHER AMOUNT OWED THE CITY, AND EVERY PERSON WHO HAS BEEN CHARGED WITH THE RESPONSIBILITY TO PAY OVER ANY TAX OR OTHER AMOUNT OWED THE CITY SHALL BE PERSONALLY LIABLE, JOINTLY AND SEVERALLY, FOR ANY ADDITIONAL MONIES NOT PAID TO THE CITY.  

Why are there additional collections charges on my account?  
Under the provisions of the City of Mesa Collection Code Section 1-32-1000, the City of Mesa may pass on charges to the taxpayer for costs incurred to collect the debt.  Please contact Tax Audit & Collections.  

Collection Code Section 1-32-1000. COLLECTION CHARGES

ANY PERSON WHO HAS A DELINQUENT ACCOUNT MAINTAINED BY THE CITY WILL ALSO BE RESPONSIBLE FOR ALL COSTS INCURRED BY THE CITY IN COLLECTING THOSE DELINQUENT FUNDS. THIS INCLUDES A REASONABLE CHARGE FOR STAFF TIME AND ANY DIRECT COSTS INCURRED.

What if I refuse to file and pay the transaction privilege taxes?
It is unlawful (a crime) for any person knowingly or willingly to refuse to make a return or fail to remit full amount of any tax or additional tax or penalty and interest. Tax Code Section - 5-10-580: CRIMINAL PENALTIES.    

What if I didn't collect the transaction privilege tax from my customers?
It is the responsibility of the business to remit transaction privilege tax.  Whether you collect it from your customers or not, the tax liability for all taxable business conducted in City of Mesa must be remitted.

How do I submit a Lien Payoff Request?
Title Companies for lien payoff requests, please fax payoff requests to City of Mesa, Tax Audit & Collections, Attention Patti Oskvarek, Revenue Collections Supervisor and Chad Kamp, Lead Revenue Collector at 480-644-2687.  Please allow at least 10 business days to respond back. 

How do I get my lien released?
Please contact Tax Audit & Collections for the balance amount due on your account.  A payment in full via certified funds – cash, cashier’s check or money order, is required in order to obtain a lien release.  Please allow at least 14 business days for the lien release to be processed.

What should I do if a Revenue Officer comes to my door?
The City of Mesa Revenue Officer carries credentials to identify themselves as City of Mesa employees. We are there to help you resolve any outstanding matters which you may have with the City of Mesa.   In order to help assist you, your response is required.

How do I change my business name?
If your business name has changed please update your information by filling out the License Application form: Transaction Privilege (Sales) & Use Tax License Application and remitting $50.00 for business start dates prior 12/31/08 and $30.00 for business start dates after 01/01/09.

 

 

Office Locations:
Licensing Office
55 N. Center St.
Mesa, AZ  85201
Phone: 480-644-2316
FAX: 480-644-3999

Tax Audit & Collections
20 E. Main St, Suite 450
Mesa, AZ 85201
Phone: 480-644-3816
FAX: 480-644-2687


Office Hours:

Monday - Thursday
7:00 a.m. to 6:00 p.m.
Closed Fridays

Mailing Address:
Tax & Licensing Office
P.O. Box 1466
Mesa, Arizona 85211-1466

E-mail:

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