§ I-4311. Treatment of Tax by Dealer
A.R.S. 47:304 governs the treatment of state sales and use tax and R.S. 47:337.17 governs the treatment of local sales and use tax that must be collected by dealers . Both statutes place the primary burden for operation of the sales tax system upon the seller of merchandise, the performer of taxable services, and the rentor or lessor of property, and require that he collect the tax from the purchaser, user or consumer. If a dealer fails or refuses to collect the tax, he not only becomes liable for payment of the tax, but also subjects himself to the possibility of being fined a maximum of $100 or imprisoned for a period of time not to exceed three months, or both.
B. This primary burden of collecting and remitting sales tax does not apply to the taxes on motor vehicles subject to the vehicle registration license tax, the collection of which is described in R.S. 47:303(B) (LAC 61:I.4307.B). However, dealers of off-road motor vehicles are charged with the responsibility for collecting and remitting the tax on sales of all such off-road vehicles, notwithstanding that they are also dealers of motor vehicles subject to registration and licensing by the motor vehicle commissioner. Dealers of off-road vehicles shall, in addition to collecting and remitting the tax to the collector, provide the purchaser with a notarized bill of sale, or other documentation, sufficient to prove that the proper taxes have been paid by the purchaser, and to enable the purchaser to obtain a certificate of title from the office of the motor vehicle commissioner.
C. Sellers, as far as practical, must separately list the sales tax from the selling price or payment for the goods or services sold. Sellers are prohibited from absorbing all or any part of the tax except when all of the following conditions are met.
1. Customers must be notified prior to the sale that the seller will remit the tax due to the appropriate taxing jurisdiction. Advertising through newspapers, magazines, television or radio commercials, billboards, and in-store displays or brochures are considered adequate notification. Oral comments made to customers immediately prior to the sale are not adequate notification to satisfy this requirement.
2. The dealer must absorb the tax for all of the customers from a predetermined class of purchases. Privately agreeing to absorb the tax for a particular customer in order to secure a sale is prohibited.
3. The sales invoices or receipts given to customers must list the amount of tax that would have been collected and include a statement that the seller will pay the tax to the appropriate taxing jurisdiction on behalf of the customer.
D. Sellers that violate the provisions of LAC 61:I.4311.C are subject to fines and imprisonment as provided for in R.S. 47:304(F)(3) and R.S. 47:337.17(F)(3).
E. Certificates of exemption from state or local sales or use tax are obtainable from the appropriate collector by persons making purchases which may be exempt in whole or in part at the time of purchase or upon which the tax may be deferred until some later event which dictates taxability of the transaction. While primary responsibility for collection of the taxes rests upon the seller, the purchaser who furnishes the seller an exemption certificate will be held liable for any taxes subsequently found to be due.
F. In cases where the total amount of state or local sales or use tax collected for a sales tax filing period exceeds the percentage applicable to the particular type of merchandise or service, any such excess must be remitted to the appropriate collector .
G. For provisions relating to the amount of state sales or use tax collected by a dealer which may be withheld by him as compensation for collecting, accounting for, and remitting the tax to the secretary, see R.S. 47:306. The amount of compensation allowed for reporting local sales or use tax is governed by local ordinance.
H.R.S. 47:304 and R.S. 47:337.17 prohibit the use of tokens in the operation of the sales tax law and provides that the secretary shall prescribe schedules of the amounts to be collected from purchasers, lessees, or consumers with respect to each sale. Such schedules integrate the collection of the state and local sales or use tax, and their use is mandatory with respect to both dealers and political subdivisions that impose a sales or use tax. The mandatory tables required by R.S. 47:304 and R.S 47:337.17 will be prepared by the Department of Revenue at the request of any local taxing authority, to reflect the aggregate state and local sales or use tax rate. Any dealer, as well, may obtain these prepared tax rate schedules from the department.(Promulgated by the Department of Revenue and Taxation, Sales Tax Section, LR 13:107 (February 1987), amended by the Department of Revenue, Policy Services Division, LR 30:2867 (December 2004), LR 31:1101 (May 2005).)
AUTHORITY NOTE: Promulgated in accordance with R.S. 47:304, R.S. 47:337.2, R.S. 47:337.17, and R.S. 47:1511.
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