Arizona: Sales Tax Handbook
How to appeal a sales tax audit or penalty in Arizona
In Arizona, the Department of Revenue will frequently audit business sales tax returns and may issue penalties or punishments for tardy filing, incorrect reporting, willful omissions, or other violations. Penalties can range from fines to revocation of your sales tax permit depending on the infraction.
If you disagree with a penalty or ruling made by the Arizona Department of Revenue, you have several options you can pursue in appealing their decision. This page contains basic guidelines for appealing to the Department of Revenue, to an administrative appeal body, and through the courts.
Sales Tax Statute of Limitations in Arizona
In sales tax law, the "statute of limitations" is the maximum amount of time state authorities have to investigate and begin potential audit or prosecution related to a a filed Arizona sales tax return in the event of underpayment, incorrect reportings, etc. The Department of Revenue cannot begin an audit or issue a penalty after this timeframe.
The statute of limitations in Arizona is four years from the later of either the return filing date or the return due date. However, if the receipts are understated by greater than 25%, then three years from the return filing date becomes six years.
Appealing to the Department of Revenue in Arizona
If you do not agree with a penalty or decision made by the Arizona Department of Revenue, you have the right to file an appeal and ask for reconsideration. In the case of a department appeal, an official petition must be filed with the Department of Revenue within the forty five days directly after the receipt of notice of deficiency assessment, or within the boundaries of whatever excess time that the Department allows.Top
Administrative Sales Tax Appeals in Arizona
In the case of administrative appeal, an official petition must be filed with State Board of Tax Appeals within thirty days after receipt of the decision or orderTop
Judicial Sales Tax Appeals in Arizona
If all other appeal avenues fail, businesses can make a final appeal in the state court system. When working with judicial appeals, the suit must be filed with the Tax Court within thirty days after the date of final decision
Back to Arizona Sales Tax Handbook Top