The Arizona (AZ) state sales tax rate is currently 5.6%. Depending on local municipalities, the total tax rate can be as high as 10.7%.
Arizona has a Transaction Privilege Tax (TPT) which is commonly referred to as a sales tax. Counties and cities can also impose a TPT on businesses in their jurisdiction. A TPT is actually a tax on the vendor but the tax is generally passed on to the consumer.
Arizona has a mix of jurisdictions to deal with when managing sales and use taxes. Some cities and counties collect their own tax; some allow the state to collect for them. A complete list can be found at the Arizona Department of Revenue website.
Arizona does not tax food for home consumption or drugs obtained with a valid prescription from an authorized professional.
Arizona has a use tax.
Amazon.com owns and operates fulfillment centers in Arizona. This physical presence or nexus creates a sales tax obligation for Amazon and many sellers participating in Amazon’s Seller Central and Fulfillment by Amazon (FBA) programs.
Little known fact: in the early 1900s, Arizona was one of about a dozen states to use sales tax tokens.
Retailers and utility-related companies with a place of business in Arizona that sell tangible personal property must collect a Transaction Privilege Tax (sales tax) unless property is exempt. Municipalities in Arizona may also have TPT requirements that must be followed as well.
How to Register
Retailers selling tangible personal property for storage, use, or other consumption in Arizona will most likely need to register for a Transaction Privilege Tax permit with the state.
Non-program cities are cities in Arizona who license and collect privilege tax independently from the State. If business is conducted in one of these non-program cities, a separate city privilege tax license is necessary
How to File and Pay
File online: https://www.aztaxes.gov/
File by mail: all businesses with income subject to transaction privilege tax, county excise tax, use or severance tax must file a Form TPT-1return even if there is no tax liability due for the period.
In addition, you must report and pay the city portion of the transaction privilege tax directly to the city. You must contact the non-program city for licensing instructions.
Due dates for state and city TPT vary, please see the complete Transaction Privilege Tax calendar.
Avalara Sales and Use Tax Products for Arizona
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