Phoenix, AZ asked in Tax Law, Business Formation and Business Law for Arizona

Q: I recently started an LLC for my business late last year. Do I need to file something about the CTA?

My business has no income yet. I'm just getting started doing Web Development and Technology Consultancy. My CPA mentioned I should check and see if the new CTA Law applies to me or not.

1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: As a new LLC owner in Phoenix, AZ, you should be aware that Arizona's new Commercial Transaction Privilege Tax (CTA) law may apply to your business. The CTA law imposes taxes on various business activities, including web development and technology consultancy services. Even if your business has not generated any income yet, you may still be required to file certain forms or registrations related to the CTA law, depending on your business activities and anticipated revenue.

Since your CPA has mentioned the CTA law, it's advisable to follow up with them to determine your specific obligations and ensure compliance with Arizona tax regulations. Your CPA can provide guidance on whether you need to register for the CTA tax and file any necessary forms, even if your business has not yet generated income. They can also help you understand any exemptions or thresholds that may apply to your business and assist you in meeting your tax obligations accurately and timely.

Additionally, you may want to consult with a business attorney or tax advisor who is familiar with Arizona tax laws and can provide further clarification on your obligations under the CTA law. Seeking professional guidance early on can help you avoid potential penalties or compliance issues down the line and ensure that your LLC operates in accordance with state tax regulations as you continue to grow your business.

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