You owe tax on advertising if:
You are in the business of selling "local advertising" within the city. This
tax is paid on the advertising income of persons in such businesses as
billboards, direct mail, radio, television, etc. The commissions and fees
retained by an advertising agency are not part of the taxable income.
Tax rate on advertising
The tax rate is 1.75% of the gross income from "local advertising." (Note:
The Mesa City Tax rate increased to 1.75% effective 07/01/2006)
Collection of Tax
You may choose to charge the tax separately on each sale, or include
Transaction Privilege Tax in your price. If you over charge any tax to your
customers, you must remit the excess tax to the city.
If your price includes Transaction Privilege Tax, you can compute how much
of the total price is Transaction Privilege Tax. You may deduct the
Transaction Privilege Taxes from your gross receipts.
What is "local advertising"?
Local advertising is the advertising of products, services, and activities
with a presence within the state. For more information go to
Advertising vs. National Advertising.
When is an advertising business operating "within the city"?
Businesses are generally considered to be doing business in the City if a
major portion of their dissemination facilities are located in the City. A
broadcasting studio located in the City is an example.
Outdoor advertising such as billboards is taxable based on the city in which
the billboard is located.
Advertising income from newspapers and periodicals is taxable as part of the