Arizona is an origin-based state (sales are taxed where the seller is located).
- Sales tax in Arizona is called transaction privilege tax (TPT): This tax is on the privilege of doing business in Arizona and is not a true sales tax
- Although TPT is usually passed on to the consumer, it’s actually a tax on the vendor
- TPT applies to businesses engaged in certain activities including retail sales
Businesses are encouraged to file online using AZTaxes.gov.
The TPT rates charged in Arizona vary depending on location as well as the type of purchase. Rates range from 5.6% to 10.9%.
Detailed rate tables are available on the department website.
The state does not charge sales tax on grocery-type food items. Food for consumption on the premises is taxed at the full rate.
A business is considered to have established a tax presence in the state if any of the following apply:
- Employees present in the state conducting business on behalf of the company
- Ownership or lease of real or personal property in Arizona
- Maintenance of an office or place of business in Arizona
- Delivery of merchandise into Arizona on vehicles owned or leased by the taxpayer
- Independent contractors or other non-employee representatives present in Arizona for the purpose of establishing and maintaining a market for the taxpayer
Find out more about nexus in Arizona.
Returns are due on the 20th of the month following the reporting period.
Your filing frequency is determined by the annual amount of your tax liability as follows:
- Annual filers: Less than $2,000 estimated annual combined Arizona, county and municipal tax liability
- Quarterly filers: $2,000 - $8,000 estimated annual combined Arizona, county and municipal tax liability
- Monthly filers: More than $8,000 estimated annual combined Arizona, county and municipal tax liability
New businesses must register with the Department of Revenue. There are three ways to obtain a TPT license:
- Register online at AZTaxes.gov
- Download and complete the Joint Tax Application (JT1) and follow the instructions
- Go to one of the DOR offices and complete the paper application
Each license costs $12 per location.
Penalties are 0.05% per month for making a late payment and 4.5% per month for filing late, not to exceed 25%. Interest accrues on delinquent payments at the same rate as charged by the IRS.