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State of Arizona
Department of Revenue
 

Transaction Privilege Tax (TPT)

The Arizona transaction privilege tax (TPT) is commonly referred to as a sales tax; however, the 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 is actually a tax on the vendor. TPT is applied to entities engaged in certain business classifications, including retail sales.

Types of business activities subject to TPT include, but are not limited to: retail sales, restaurants/bars, hotel/motel (transient lodging), commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured building, severance (mining, timbering), transportation, printing, publishing, utilities, communications, air/railroad, private cars/pipelines and use tax.

The Arizona Department of Revenue (ADOR) collects the tax for the counties and cities. Tax rates vary depending on the type of business activity, the city and the county.

If you are selling a product or engaging in a service subject to transaction privilege tax, you will most likely need to obtain the state transaction privilege tax (TPT) license from ADOR (commonly referred to as a sales tax, resale, wholesale, vendor or tax license) and a business/occupational license from the city or cities in which you are based and/or operate.

If you have questions about whether or not your business activity is subject to TPT, check with ADOR.

Please note: There are some differences between the state and local authorities in the taxability of transactions. For instance, the state does not impose TPT on 1) renting, leasing, or licensing for use residential real property or 2) the sale of advertising. However, many cities do tax these activities.

For questions regarding TPT, please call 1-(844)-698-9176

www.AzTaxes.gov
 

License Compliance

The Arizona Department of Revenue uses a number of research methods to ensure businesses in Arizona are properly licensed for State Transaction Privilege Tax and Use Tax and registered as an employer for withholding taxes. This research includes matching names of businesses from various directories or sources against our database.

Questions?  Contact us at: LicenseCompliance@azdor.gov