Use Tax Self Reporting Form
Who pays use tax?
Any business and some individuals may be required to pay use tax. Use tax is
imposed on items you acquire from a retailer which you store or use in the
city. You pay it on items on which you have not already been charged a
Transaction Privilege Tax equal to at least the 1.75% Mesa tax rate when you
acquired the item. As this tax is imposed on purchases from retailers,
"casual" purchases from individuals are not taxable.
How is use tax different from transaction privilege tax?
Privilege Tax is paid by the seller on items sold, but use tax is usually
paid by the purchaser. Purchases which would have been taxable retail sales
but have so far escaped the tax may be subject to use tax. There are several
reasons why an item may have escaped a city transaction privilege tax on the
original transaction. Some common reasons are "out-of-state" purchases or a
person has purchased the item for an exempt usage but has changed the use.
The use tax is an indirect benefit to retailers located in Mesa because it
removes incentives for customers to shop outside of the city in order to
avoid paying the city tax. It also allows people who buy items and claim an
exemption the flexibility to change the usage to a non-exempt usage.
The use tax rate is 1.75% of the:
Cost of tangible personal property bought from a retailer, upon persons
storing or using the property in Mesa.
Cost of the tangible personal property provided under a warranty,
maintenance or service contract.
Cost of complimentary items other than personal hygiene items provided to
customers of a restaurant, hotel, or other business without itemized charge.
Cost of food consumed by the owner or employees of a restaurant or bar.
Use Tax Exemptions
Examples of items
that are subject to use tax
You should keep records of the tangible personal property you purchase for
purposes of complying with the use tax. Copies of invoices must be kept to
support the cost of purchases and to evidence the amounts of Transaction
Privilege Tax paid to your suppliers. You should be aware that some
suppliers will charge the state Transaction Privilege Tax but will not
charge a city Transaction Privilege Tax, leaving you with the obligation to
pay the city use tax.
Businesses which are located out of state and sell and ship items to buyers
in Mesa may not have any obligation to pay Transaction Privilege Tax to Mesa
by virtue of the "out-of-state" exemption. If they do not charge a city tax
of at least 1.75%, they may leave their customers with an obligation to pay
use tax. These out-of-state retailers may elect to obtain a city tax license
and pay the use tax for their customers.
Use tax is reported on the same form that licensed businesses use to report
their Transaction Privilege Tax. Individuals and businesses who are not
required to be licensed may occasionally need to report an isolated
transaction subject to use tax. In this case come to the office or call to
make arrangements to make a one-time report.