SAN TAN VALLEY, AZ — San Tan Valley residents now have clearer guidance on Transaction Privilege Tax (TPT), Arizona’s form of sales tax, after the town attorney addressed concerns at the December 3 council meeting. The update follows questions raised at the November 19 session about whether local residents were being charged the wrong amount on purchases.
Town Attorney Allen Quist delivered guidance from Lee Grafstrom, a tax policy analyst with the Arizona League of Cities and Towns. The key takeaway: TPT is determined by physical street address, not by ZIP code or city name in a mailing address.
How San Tan Valley TPT Is Calculated
Residents worried that overlapping ZIP codes could cause incorrect tax charges. However, Grafstrom’s guidance clarifies that online rate finders and tax programs use full street addresses and GIS data. This means a resident’s exact location determines their tax rate.
Council Member Daniel Oakes asked for clarification on this point during the meeting. “If you live in a zip code that has Queen Creek annex areas and non-Queen Creek annex areas, it’s specific—your hard address shows up in the tax?” he asked.
Quist affirmed this understanding. “It is not determined by zip code. It’s the full address,” he said.
Online Sellers Must Use Delivery Address
Remote and online sellers like Amazon should charge TPT based on the delivery address. Some online sellers occasionally mistakenly apply tax based on their Arizona warehouse location. According to Quist, a change in the law requires them to use the delivery address instead.
Quist said Grafstrom did not believe Amazon was among the confused retailers making this error. Separately, Quist reached out to the Arizona Department of Revenue to confirm there are no updates needed to ensure rate finders accurately reflect the municipal boundaries. He said they are looking at it.
No Local Tax Revenue to Recover
Because San Tan Valley does not yet have a local TPT, there is no municipal tax revenue to recover. Quist emphasized this point from Grafstrom’s guidance.
Under Arizona law, sellers are responsible for remitting correct TPT to the Arizona Department of Revenue. If a seller collects more tax than applicable, that excess amount is supposed to be reported to ADOR.
How Residents Can Report Errors
Residents who believe they were charged incorrectly should first contact the seller involved in the transaction. The seller bears responsibility for charging the correct rate.
Quist summarized residents’ options: “If residents have questions about specific transactions, reach out to the seller. You can also reach out to us, the town, and we can package that information, send it to the Arizona Department of Revenue for them to look further into it.”
To assist, the town needs specific addresses, transaction details, and seller information.
Focus on Current Transactions Recommended
When Mayor Daren Schnepf asked about timeframes for investigation, Quist acknowledged a statute of limitations exists for excess tax refunds. He believes it spans a few years.
However, his recommendation focuses on the present. “My recommendation would be to just look at current transactions,” Quist said. “If a resident sees one that looks like Queen Creek TPT is being charged, that way we then investigate those.”
Council Member Brian Tyler asked if this information could be posted on the town’s website. Quist confirmed staff would look into that option.
