Arizona Sales Tax Guide 2025: Standards, Rules, Rates

Are you navigating the complexities of Arizona’s taxation system? Whether you’re a resident, business owner, or planning a move to the Grand Canyon State, understanding Arizona’s tax obligations is essential for managing your finances effectively. This guide will walk you through everything you need to know about Arizona’s state taxes, including sales tax (transaction privilege tax), exemptions, and much more.

Sales Tax in Arizona

Arizona sales tax law, introduced in 1933 as a Transaction Privilege Tax (TPT), applies to businesses rather than consumers. Sales tax in Arizona varies by location, with rates ranging from 5.6% to over 11%, including state, county, and city taxes.

Arizona Sales Tax Rate

Arizona’s base sales tax rate, also known as the Transaction Privilege Tax (TPT), is 5.6%. Local rates vary by city and county, resulting in a total tax range of 5.6% to 11.2%.

Jurisdiction	Sales Tax Rate
State Tax	5.60%
County Tax	0%–5.60%
City Tax	0%–5.60%
Special Tax	0.00%
Combined Tax	5.60%–11.20%

For more information on city-based tax rates in Arizona, check out Kintsugi’s City Level Sales Tax Guides.

Arizona Sales Tax Calculator

Imagine you own a retail store in Phoenix, Arizona, where the total sales tax rate is 8.6% (5.6% state tax + 3.0% city and county taxes). A customer purchases a bicycle priced at $1,200, and you need to calculate the sales tax and the total amount the customer will pay.

Step 1: Determine the Total Sales Tax Rate

The total tax rate is the sum of:

State Sales Tax (TPT): 5.6%
Phoenix Local Tax: 3.0%

Use the formula for calculating sales tax:

Total Sales Tax Rate = State Tax Rate + Local Tax Rate

Plug in the values:

5.6% + 3.0% = 8.6% (or 0.086 in decimal form)

Step 2: Calculate the Sales Tax

Use the formula for calculating sales tax:

Sales Tax = Item Price × Total Sales Tax Rate

Plug in the values:

1,200 × 0.086 = 103.20

The sales tax on the $1,200 bicycle is $103.20.

Step 3: Calculate the Total Price

Add the sales tax to the original price of the item to determine the total amount the customer will pay:

Use the formula for calculating sales tax:

Total Price = Item Price + Sales Tax

Plug in the values:

1,200 + 103.20 = 1,303.20

Final Answer:

The total price of the bicycle, including sales tax, is $1,303.20.

Additional Considerations:

Tax Varies by Location: Different cities and counties in Arizona have varying local tax rates. Use the Arizona Department of Revenue Tax Rate Lookup Tool to find the exact rate for your location.
Exemptions: Certain items, such as food for home consumption or prescription drugs, may be exempt from sales tax in Arizona.
Online and Remote Sales: If your business sells online to Arizona customers and exceeds the economic nexus threshold of $100,000 in gross sales, you must collect sales tax based on the customer’s location.
TPT Responsibility: In Arizona, businesses must collect and remit the Transaction Privilege Tax, as the tax is imposed on the seller, not the buyer.

By following these steps, Arizona businesses can accurately calculate sales tax, including complying with streamlined sales tax initiatives, and ensure compliance with state and local tax regulations.

FAQ on Sales Tax in Arizona

How do I Calculate Sales Tax in Arizona?

Multiply the item price by the total tax rate (state + local). For example, on a $100 item at an 8.6% total tax rate: $100 × 0.086 = $8.60.

What is the State Tax Rate for Arizona?

The base state sales tax rate, known as the Transaction Privilege Tax (TPT), is 5.6%.

What does Arizona Sales Tax Apply to?

Arizona sales tax applies to retail sales of tangible personal property, some services, rentals, and certain online transactions.

What is the Sales Tax Rate in Phoenix Arizona in 2025?

The total sales tax rate in Phoenix, Arizona, for 2025 is 8.6% (5.6% state tax + 3.0% local tax).

Sales Tax Nexus in Arizona

Arizona’s base sales tax rate, known as the Transaction Privilege Tax (TPT), is 5.6%, with businesses required to register for tax collection if they meet physical or economic nexus thresholds.

Effective Date	Threshold	Includable Sales (Gross, Retail, or Taxable)	When You Need to Register
October 1, 2019	$100,000 in gross sales annually	Gross Sales	First day of the month thirty days after the threshold is met in the current or previous calendar year.
Ongoing	Any physical presence in Arizona	Retail and Taxable Sales	Immediately upon establishing a physical presence, such as a store, office, or warehouse.

FAQ on Sales Tax Nexus in Arizona

What is Sales Tax Nexus in Arizona?

Sales tax nexus in Arizona is established through a physical presence (e.g., store, office, or employees) or by exceeding the economic nexus threshold of $100,000 in annual gross sales.

What are the Nexus Rules in Arizona?

Arizona requires businesses to collect and remit sales tax if they meet physical presence standards or surpass the economic nexus threshold of $100,000 in gross sales annually. Remote sellers must comply based on customer location.

Arizona Sales Tax Exemptions

Arizona offers a variety of sales tax (Transaction Privilege Tax) exemptions to support specific industries and activities. These exemptions apply to qualifying purchases such as manufacturing equipment, food for home consumption, and nonprofit activities.

Category	Exemption Description
Manufacturing Equipment	Machinery and equipment used in manufacturing or processing are exempt from TPT.
Food for Home Consumption	Groceries purchased for home consumption are exempt from state TPT but may be subject to local taxes.
Nonprofit Organizations	Purchases made by qualifying nonprofit organizations for their operations are exempt.
Resale Items	Items purchased for resale are exempt if the buyer provides a valid resale certificate.
Prescription Drugs	Prescription medications and certain medical devices are exempt from TPT.
Agriculture and Mining	Equipment and materials used in farming, ranching, and mining operations are exempt.
Government Purchases	Purchases made by federal, state, and local government entities are exempt from TPT.

FAQ on Sales Tax Exemptions in Arizona

How do I Apply for an Arizona State Tax Exempt Certificate?

To apply for an Arizona State Tax Exempt Certificate, businesses must complete Form 5000 (Arizona Resale Certificate) or Form 5000A (Arizona Exemption Certificate), available on the Arizona Department of Revenue (ADOR) website. These forms must be presented to vendors to claim exemption from Transaction Privilege Tax (TPT) for qualifying purchases.

What is Exempt from Sales Tax in Arizona?

Arizona provides exemptions for manufacturing equipment, food for home consumption, prescription drugs, and purchases for resale. Certain nonprofit and government activities also qualify. Learn more in this blog about Arizona Sales Tax Exemptions or visit the Arizona City Tax Code Guide.

What is the Arizona SaaS Sales Tax?

SaaS (Software as a Service) is generally taxable in Arizona if it is deemed a "tangible personal property" or involves software installation or access. For more insights, read this blog on Arizona SaaS Sales Tax.

Is there Sales Tax on Clothes in Arizona?

Yes, clothing is subject to Arizona’s Transaction Privilege Tax (TPT), with a base rate of 5.6%, plus applicable local taxes. For a deeper analysis, check this blog on clothing taxation in Arizona.

Does Arizona Have Tax Exemption?

Yes, Arizona offers tax exemptions for specific industries, organizations, and products, such as nonprofit purchases, food for home consumption, manufacturing equipment, and prescription drugs.

What is the Arizona Sales Tax Exemption Form?

The Arizona Sales Tax Exemption Form includes Form 5000 (Resale Certificate) and Form 5000A (Exemption Certificate), which businesses use to claim TPT exemptions for qualifying purchases. These forms are available on the ADOR website.

Are Nonprofits Exempt from Sales Tax in Arizona?

Yes, qualifying nonprofit organizations are exempt from Arizona sales tax for purchases directly related to their charitable purposes. Nonprofits must present Form 5000A to vendors for tax-free transactions.

Is Clothing Taxable in Arizona?

Yes, clothing is taxable in Arizona, with rates varying by locality. The combined tax includes the 5.6% state rate plus any additional local taxes.

Arizona Sales Tax Filing

What are the Arizona Filing Requirements?

Arizona businesses must file sales tax (TPT) returns electronically via the AZTAP portal. Filing includes reporting gross sales, deductions, and taxable sales.

How Often do I Need to File Sales Tax in Arizona?

The filing frequency depends on taxable sales volume:

Monthly for businesses collecting over $2,000 in TPT per month.
Quarterly for collections between $500 and $2,000.
Annually for collections under $500.

How do I Register for Sales Tax in Arizona?

To register for sales tax (TPT) in Arizona, visit the ADOR Taxpayer Access Point (AZTAP). Create an account, complete the online application, and pay the applicable registration fee.

How Much does it Cost to Register for Sales Tax in Arizona?

The cost to register for sales tax (TPT) in Arizona is $12 per business location and must be paid annually.

How can I Apply for Arizona Sales Tax Registration?

Registering for sales tax in Arizona, known as the Transaction Privilege Tax (TPT), is essential for businesses engaging in taxable activities within the state. The Arizona Department of Revenue (ADOR) provides an online platform, AZTAP, to streamline the registration process.

Visit the Arizona Department of Revenue E-File Services Page: Go to the Arizona Department of Revenue E-File Services page and locate the link to access the AZTaxes.gov portal.
Create an Account on AZTaxes.gov: Click the “Register” button on the AZTaxes homepage to create a new account. Provide your email address, create a secure password, and verify your account via the confirmation email.
Log In to Your AZTaxes Account: After verifying your email, log in to your AZTaxes account with your credentials. From the dashboard, select the “Business Registration” option to begin the process.
Start a New Transaction Privilege Tax (TPT) Application: Click on “Apply for a New TPT License” or “Register a Business” and select the type of business structure (e.g., sole proprietorship, LLC, corporation).
Provide Business Information:
- Legal Business Name and DBA (if applicable)
- Federal Employer Identification Number (FEIN) or Social Security Number for sole proprietors
- Business Address (physical and mailing address)
- Business Activity (e.g., retail, services, or manufacturing)
Indicate Taxable Activities and Locations: Specify your taxable activities and list all Arizona locations where your business operates. A $12 annual fee applies to each physical business location.
Enter Start Date of Business Operations: Provide the date your business began or will begin taxable activities in Arizona. This ensures accurate tax reporting from the correct period.
Select Filing Frequency:
- Monthly: Over $2,000 in tax collected per month.
- Quarterly: Between $500–$2,000.
- Annually: Less than $500.
Review and Submit the Application: Carefully review all information entered for accuracy. Pay the required registration fee of $12 per location, and submit your application electronically.
Receive Your TPT License: Once your application is approved, you will receive your Transaction Privilege Tax (TPT) License. This license authorizes your business to collect and remit sales tax in Arizona.
Begin Collecting and Filing Sales Tax: Start collecting Arizona’s state (5.6%) and local sales taxes based on your location. File TPT returns through AZTaxes.gov by the assigned due dates.

By following these steps, businesses can efficiently register for sales tax in Arizona and remain compliant with state tax laws. For additional guidance, visit the Arizona Department of Revenue E-File Services page.

Who Must File Arizona Tax Return?

Any business with a physical or economic presence in Arizona or engaging in taxable transactions exceeding the nexus threshold ($100,000 in annual sales) must file a TPT return.

Arizona Sales Tax Due Date

Filing Frequency	Due Date
Monthly	20th of the following month
Quarterly	20th of the month following the quarter's end
Annually	January 20th of the following year

What is the Tax Deadline for Arizona?

The tax deadline for Arizona is the 20th of the month following the end of the filing period (monthly, quarterly, or annually).

What is the Penalty for Late Payment of Sales Tax in Arizona?

Late payment incurs a penalty of 4.5% per month of the unpaid tax, up to a maximum of 25%, plus interest on the outstanding balance. Additional fees may apply for prolonged delays.