AZ HB2702

Creates new definitions for "marketplace facilitator," "marketplace seller," and "seller" in transaction privilege tax (TPT) law, establishing a framework for taxing online sales platforms and their sellers.

Establishes a "marketplace facilitator classification" imposing 5% TPT on all sales facilitated by marketplace facilitators on behalf of marketplace sellers sourced to Arizona, regardless of whether the marketplace seller is registered with the department.

Imposes tax nexus on out-of-state businesses meeting either $100,000 in gross proceeds or 200 separate transactions with Arizona purchasers in the prior or current calendar year, with separate thresholds for marketplace facilitators.

Provides liability relief for marketplace facilitators from 7% (2019) down to 0% (2026 and beyond) of uncollected taxes due to errors other than sourcing mistakes, if the marketplace facilitator and seller are unaffiliated.

Requires marketplace facilitators to report taxes separately from direct sales, report taxes for sales sourced to Arizona regardless of seller registration status, and prohibits class action suits against marketplace facilitators over overpaid transaction privilege taxes.