Is Arizona TPT the same as sales tax?

Not legally. TPT is a tax on the seller for the privilege of doing business in Arizona, measured by gross receipts. The seller owes it whether or not it adds the tax to the customer's bill. Most retailers pass it on as a separate line, so customers see it as a sales tax, but the legal liability stays with the business.

What is the sales tax rate in Phoenix?

Phoenix retail sales carry 9.1%: 5.6% state, 0.7% Maricopa County and 2.8% city. The city rate rose from 2.3% on July 1, 2025. For a single item priced above $14,338, the city portion on the amount above that threshold drops to 2%.

How much does an Arizona TPT license cost?

The state TPT license fee is $12 per licence. Cities that impose a privilege tax may charge their own licence fee of up to $50 per jurisdiction, collected by the Arizona Department of Revenue with your application. There is no state renewal fee, but city licences renew each calendar year and the renewal fee is due January 1.

When are Arizona TPT returns due?

TPT is due on the 20th of the month after the period. Electronic filers are not delinquent if the return and payment arrive by the last business day of that month; paper filers have until the business day before. Monthly filing applies above $8,000 of estimated annual tax, quarterly from $2,000 to $8,000, and annual below $2,000.

Are groceries taxed in Arizona?

The state and counties do not tax food for home consumption sold by grocery stores and similar retailers. Food eaten on the premises, such as restaurant meals, is taxable. Some cities still tax groceries under their own city tax codes, so check the city's rate schedule for the food-for-home-consumption line before you set up your till.

Sales tax

Arizona Sales Tax Rate in 2026: How TPT Works, City Rates and Your TPT License

Arizona sales tax rate 2026: the 5.6% state TPT plus city rates for Phoenix, Tucson and Mesa, TPT licence fees, filing and examples.

Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources

Updated October 2026 Verified against official sources 9 October 2026 16 min read

Arizona sales tax rate — MSMETOOLS guide cover

Contents (9)

1. Why Arizona's TPT is not a sales tax
2. Arizona TPT rates for major cities (2026)
3. Recent changes: Phoenix, Scottsdale, rentals and big-ticket items
4. Worked examples in dollars
5. Who needs a TPT license
6. Filing frequency, due dates and penalties
7. What is exempt and what cities tax differently
8. Common TPT mistakes and how to fix them
9. What to do next

Search for "Arizona sales tax rate" and you will find a dozen different numbers, partly because Arizona does not have a sales tax in the usual sense. It has a transaction privilege tax, or TPT, which the seller owes on its gross receipts, layered across the state, its 15 counties and most of its cities and towns. This guide is for anyone selling in Arizona: shop owners in Phoenix, restaurants in Tucson, e-commerce sellers shipping in from other states. You'll find the current state, county and city rates for the main cities, how TPT differs from a normal sales tax, what the TPT licence costs, when returns are due and worked examples in dollars. Rates were checked in October 2026 against Arizona statutes and the cities' own tax pages.

Quick answer

Arizona's state TPT rate on retail sales is 5.6%. Counties and cities add their own rates, so the combined rate you collect is usually 8% to 9% in the big cities: 9.1% in Phoenix, 8.7% in Tucson and 8.3% in Mesa.

TPT is a tax on the seller's privilege of doing business, not on the buyer — you owe it even if you don't itemise it
One licence and one return through the Arizona Department of Revenue cover state, county and city tax
State licence fee: $12, plus city fees of up to $50 per jurisdiction
Returns are due on the 20th; e-filers have until the last business day of the month
Remote sellers must register once Arizona retail sales pass $100,000 a year

Why Arizona's TPT is not a sales tax

In most states, sales tax is a tax on the buyer that the seller collects. Arizona's transaction privilege tax is different: it is a tax on the vendor for the privilege of doing business in the state, measured by the gross receipts of certain business activities. The legal liability sits with the seller. If you forget to add tax to an invoice, you still owe it, and it comes out of your margin.

In practice most businesses pass TPT on to customers as a separate line on the receipt, and Arizona law allows it, so shoppers see it as a sales tax. The difference matters in three places. First, if you quote a price "including tax", the tax is inside that price and you must back it out to report. Second, a customer's exemption certificate protects you only because the law lets certain sales be deducted, not because the buyer bears the tax. Third, if you under-collect, the state pursues you, not your customer.

TPT is also broader than a typical sales tax because it applies to business activities, not just sales of goods. The state sorts activity into classifications, each with its own rate and rules. Retail sales, restaurants and bars, amusements, rentals of equipment, prime contracting, utilities, telecoms, transporting, publishing and job printing all carry a 5% base, with the 0.6% education increment on top for most of them. Hotels and other transient lodging carry a 5.5% state rate. Cities add their own classifications, the main one being commercial leases of real property, which many cities tax even though it is not part of the retail rate.

Arizona TPT rates for major cities (2026)

The combined retail rate is the state rate plus the county rate plus the city rate. Maricopa County's rate is 0.7% and Pima County's is 0.5%. The table shows retail rates for the largest cities and for the Tucson area, from the cities' own tax pages and Pima County's published rate table.

Location	State	County	City	Combined retail rate
Phoenix	5.6%	0.7%	2.8%	9.1%
Mesa	5.6%	0.7%	2%	8.3%
Scottsdale	5.6%	0.7%	1.7%	8%
Unincorporated Maricopa County	5.6%	0.7%	—	6.3%
Tucson	5.6%	0.5%	2.6%	8.7%
Marana	5.6%	0.5%	2.5%	8.6%
Oro Valley	5.6%	0.5%	3.0%	9.1%
Sahuarita	5.6%	0.5%	2.0%	8.1%
South Tucson	5.6%	0.5%	5.0%	11.1%
Unincorporated Pima County	5.6%	0.5%	—	6.1%

Other business classes have different city rates. Phoenix, for example, charges 2.8% on restaurants and bars, hotels, amusements, commercial leases and equipment rentals as well as retail, while many cities charge a higher rate on hotels and some tax restaurants above their retail rate. The Arizona Department of Revenue (ADOR) publishes a monthly rate table and a city-by-city profile of every classification, and its Tax Rate Look Up tool finds the jurisdiction for an exact address. Use the address tool rather than a ZIP code: ZIP codes often cross city limits, and a business just outside a city line pays no city tax.

Aerial night view of downtown Phoenix with the city grid lit up to the horizon — Phoenix raised its city TPT rate from 2.3% to 2.8% on July 1, 2025, taking the combined retail rate to 9.1%.· Image: jerryfergusonphotography (CC BY 2.0)

Recent changes: Phoenix, Scottsdale, rentals and big-ticket items

Several changes from the past year and a half are still catching businesses out.

Phoenix rose to 2.8% on July 1, 2025. The City Council approved Ordinance G-7369 in March 2025, adding 0.5% to most classifications, including retail, restaurants and bars, hotels, contracting, amusements, commercial leases and equipment rentals. The combined Phoenix retail rate moved from 8.6% to 9.1%. Contracts signed before July 1, 2025 stayed at the old rate, but any change order signed after that date moves the contract to the new rate.

Phoenix's big-ticket threshold moved on January 1, 2026. Phoenix has a two-level retail rate for expensive single items, a feature of the transportation plan voters approved in 2015. The full 2.8% city rate applies to the first $14,338 of a single item's price, and only 2% applies to the part above it. The threshold is adjusted for inflation every two years; for 2026 and 2027 it rose from $13,886 to $14,338. Sellers report the level-2 amount under a separate business code (366 for retail).

Scottsdale changed to 1.7% on July 1, 2025, giving a combined rate of 8% for most activities. Its use tax is lower, at 1.5%.

Cities stopped taxing long-term residential rentals on January 1, 2025. A state law now bars cities and towns from levying TPT on renting homes and apartments for residential use. The ban does not cover hotels, short-term lodging, commercial leases or health care facilities, so short-term rental hosts still owe TPT and any city lodging tax. City web pages that still list a residential rental rate are out of date.

New jurisdictions also appear from time to time as communities incorporate, and cities change rates on January 1 and July 1 or on other dates set by ordinance. ADOR's monthly rate table header lists every change for the month, which makes it the quickest check.

Arizona TPT changes to know

January 1, 2025

Cities barred from taxing long-term residential rentals

July 1, 2025

Phoenix city rate 2.3% → 2.8%; Scottsdale moves to 1.7%

January 1, 2026

Phoenix big-ticket threshold rises to $14,338 for 2026–27

Each January 1

City licence renewal fees due; delinquent after the last business day of January

Each June 20

Estimated payment due for taxpayers with $4.1 million+ annual TPT

Worked examples in dollars

These use the combined retail rates in the table. Arizona lets you compute tax on each transaction and round to the nearest cent.

A Phoenix boutique. A customer buys $100 of clothing. Tax at 9.1% is $9.10, so the receipt total is $109.10. Of that tax, $5.60 is state, $0.70 is Maricopa County and $2.80 is City of Phoenix, and all three go on one return to ADOR.

A Tucson gift shop. A $250 sale at 8.7% carries $21.75 of TPT. If the shop sits a mile south in South Tucson, the same sale carries 11.1%, or $27.75, because South Tucson's city rate is 5%.

A Mesa computer store. A $1,200 laptop at 8.3% carries $99.60.

A big-ticket sale in Phoenix. A restaurant buys a $20,000 walk-in cooler from a Phoenix supplier. State tax at 5.6% is $1,120.00 and Maricopa County at 0.7% is $140.00. The city tax is 2.8% on the first $14,338 ($401.46) plus 2% on the remaining $5,662 ($113.24), or $514.70. Total TPT is $1,774.70, an effective rate of about 8.87% instead of 9.1%.

Backing TPT out of a tax-included price. A Phoenix food truck sells drinks for a flat $5.00 "tax included". The pre-tax price is $5.00 ÷ 1.091 = $4.58, and the TPT inside it is $0.42. Report $4.58 as gross receipts per drink. If the truck had simply reported $5.00 as gross receipts, it would overpay; if it had charged $5.00 and then added nothing, it still owes $0.42 per drink out of the $5.00.

The accounting credit. An electronic filer whose state TPT is $3,000 a month may keep 1.2% (max $12,000 a year) of the state tax if it files and pays on time: $36 a month or $432 a year. A paper filer gets 1% (max $10,000 a year). The credit applies to the state portion only, not county or city tax.

Try it — a $500 sale in Phoenix

Purchase AmountState

Local / County Rate

Purchase Amount$500.00

State Tax (6.25%)$31.25

Local Tax (2%)$10.00

Combined Rate8.25%

Total Amount (Including Tax)$541.25

Open the full Sales Tax Calculator (PDF, save, compare)

Who needs a TPT license

You need a TPT licence before you start any activity Arizona taxes: selling goods at retail, running a restaurant or bar, renting equipment, operating as a prime contractor, charging admission to amusements, leasing commercial property in a city that taxes it, or running a hotel or short-term rental. The law forbids engaging in business without one, so apply before you open.

Since 2017, ADOR has been the single point of licensing and collection for the state, every county and every city, including the cities that write their own tax codes such as Phoenix, Tucson and Mesa. One application on AZTaxes.gov registers you with every jurisdiction where you do business, and you file one return that splits tax by jurisdiction and business class.

Out-of-state sellers have economic nexus once their retail sales to Arizona customers exceed $100,000 in the previous or current calendar year. Marketplace facilitators that pass $100,000 of sales, their own plus third-party sellers', collect on the marketplace sales. Sellers who use a marketplace should confirm with ADOR whether their own direct sales still require a licence. A remote seller under the threshold charges nothing, and Arizona buyers owe use tax instead.

How to get an Arizona TPT license

1
Set up the business and get an EIN
Form your LLC or corporation with the Arizona Corporation Commission if you use one, and get an EIN from the IRS. Sole proprietors can apply with a Social Security number.
EIN application guide
2
Find the exact jurisdiction for each location
Use ADOR's Tax Rate Look Up tool with the street address of each place you sell from. Note the city and county codes (for example PHX, TU, ME, MAR).
3
Apply on AZTaxes.gov
Create an account and complete the joint tax application. List each business location and every business classification you will report, such as retail (017), restaurant and bar (011) or commercial lease (213).
Tip: Choose a single consolidated licence if you have several locations and want to report them together.
Open AZTaxes.gov
4
Pay the licence fees
The state fee is $12. Each city that taxes your activity can add a licence fee of up to $50. ADOR collects them all with the application.
5
Receive the licence and set up your till
ADOR issues a licence covering each location and jurisdiction. Load the combined rate for each business class into your point-of-sale system before your first sale.

City licences are valid for the calendar year. Renewal fees are due on January 1 and become delinquent if ADOR has not received them by the last business day of January. There is no state renewal fee. If you close a location, cancel it on AZTaxes.gov so you are not billed for it at renewal.

Row of shops and restaurants with shade trees on a commercial street opposite the University of Arizona in Tucson — Tucson retailers report 5.6% state, 0.5% Pima County and 2.6% city TPT on one return filed with ADOR.· Image: Ken Lund (CC BY-SA 2.0)

Filing frequency, due dates and penalties

ADOR sets your filing frequency from your estimated annual combined TPT liability, across state, county and city tax. The bands in the statute are simple.

Estimated annual TPT	Filing frequency	Due date	Delinquent if received after
More than $8,000	Monthly	20th of the next month	Last business day of that month (e-file)
$2,000 to $8,000	Quarterly	20th after the quarter (April, July, October, January)	Last business day of that month (e-file)
Under $2,000	Annual	January 20	Last business day of January (e-file)

Paper filers get one business day less: their return is delinquent if it arrives after the business day before the last business day of the month. Seasonal businesses that operate eight months a year or fewer can ask for a seasonal schedule, and ADOR can put transient businesses, such as one-off event vendors, on a daily or per-event schedule.

Large taxpayers have one extra payment. Businesses whose annual TPT liability was $4.1 million or more in the previous year, or who expect to reach it, make an estimated payment each June, due by June 20.

Late filing costs 4.5% a month, up to 25% of the tax due, and late payment carries a separate penalty plus interest. On a $2,000 return filed two months late, the late-filing penalty alone is $180. You also lose the accounting credit for any period you pay late. File a return for every period even if you made no sales; a zero return keeps the account in good standing.

What is exempt and what cities tax differently

Food for home consumption is the biggest state exemption. Groceries sold by a grocery store, or by any retailer that sells food the way a grocery does and offers no seating, are exempt from state and county TPT. Food eaten on the premises is taxable under the restaurant classification. Cities are a different matter: some city codes still tax food for home consumption at a city rate, so a grocery in one town may charge a small city tax on groceries while the same store a few miles away charges nothing. Check the city's profile for the food line.

Prescription drugs and prescribed medical oxygen are exempt at the state level. Sales for resale are not taxed if the buyer gives you a completed Arizona resale certificate (Form 5000A), and manufacturers, contractors and other qualifying buyers can claim specific deductions on Form 5000. Keep every certificate: without it, ADOR treats the sale as taxable at your rate.

How common sales are treated

Sale	State and county	City
Groceries (food for home consumption)	Exempt	Taxed in some cities
Restaurant meals and bar drinks	Taxable (restaurant class)	Taxable, rate set by city
Prescription drugs	Exempt	Check the city profile
Goods bought for resale (with Form 5000A)	Exempt	Exempt
Long-term residential rent	Not taxed	Banned from January 1, 2025
Hotel and short-term rental stays	Taxable at 5.5% state	Taxable, often with an extra lodging tax

Groceries (food for home consumption)

State and county: Exempt
City: Taxed in some cities

Restaurant meals and bar drinks

State and county: Taxable (restaurant class)
City: Taxable, rate set by city

Prescription drugs

State and county: Exempt
City: Check the city profile

Goods bought for resale (with Form 5000A)

State and county: Exempt
City: Exempt

Long-term residential rent

State and county: Not taxed
City: Banned from January 1, 2025

Hotel and short-term rental stays

State and county: Taxable at 5.5% state
City: Taxable, often with an extra lodging tax

Arizona also has a use tax. It applies when a business buys goods for its own use from a seller who did not charge Arizona TPT, typically an out-of-state supplier. The state use tax mirrors the 5.6% retail rate, and many cities levy their own use tax; in Mesa, for example, the combined use tax is 7.6%.

Contracting works differently from retail. Prime contractors pay TPT on a portion of their gross receipts on each job, at the rate for the job site's city and county, rather than the supplier charging tax on materials. Residential contractors who work only on owner-occupied homes under the MRRA rules follow yet another regime. If you are in construction, read ADOR's contracting guidance before quoting jobs.

Common TPT mistakes and how to fix them

Using a ZIP code instead of the address. ZIP codes in the Phoenix and Tucson metros cross city lines. A business that charges Tucson's 8.7% when it actually sits in unincorporated Pima County at 6.1% over-collects; the reverse leaves it paying the gap from its own pocket. Re-check each location with ADOR's address lookup and amend past returns if needed.

Missing the Phoenix increase. Businesses that set Phoenix rates in a till or e-commerce plug-in before July 2025 may still be charging 8.6%. Because TPT is your liability, you owe 9.1% on every Phoenix sale since July 1, 2025 regardless of what you charged.

Forgetting non-retail classes. A brewery with a taproom, retail merchandise and an event space reports restaurant, retail and amusement income separately, and each class can carry a different city rate. Lumping everything into retail understates the tax.

Not cancelling closed locations. Unclosed locations generate renewal bills and non-filing notices. Cancel them on AZTaxes.gov.

Remote sellers waiting too long. Once Arizona retail sales pass $100,000 in a calendar year, you owe TPT on sales from then on. Register promptly; back tax plus the 4.5% a month, up to 25% penalty builds quickly.

Official links

What to do next

Look up the exact jurisdiction for each address you sell from, then apply for your TPT licence on AZTaxes.gov before your first sale. Load the combined rate for each business class into your till or online store, and use our sales tax calculator to check receipts and tax-included prices. Read how to calculate sales tax for discounts and shipping, and if you also sell into other states, compare the rules in our California and Illinois guides.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Arizona's state transaction privilege tax (TPT) rate on retail sales is 5.6%: a 5% base plus a 0.6% education increment. Counties and cities add their own rates, so combined rates run from about 6% in unincorporated areas to more than 11% in a few towns. Phoenix is 9.1%, Tucson 8.7% and Mesa 8.3%.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1.A.R.S. § 42-5010, Rates; distribution base — Arizona State Legislature · accessed 9 October 2026
2.A.R.S. § 42-5005, Transaction privilege tax and municipal privilege tax licenses; fees — Arizona State Legislature · accessed 9 October 2026
3.A.R.S. § 42-5014, Return and payment of tax; estimated tax — Arizona State Legislature · accessed 9 October 2026
4.A.R.S. § 42-5044, Nexus; out-of-state businesses; threshold — Arizona State Legislature · accessed 9 October 2026
5.A.R.S. § 42-5017, Credit for accounting and reporting expenses — Arizona State Legislature · accessed 9 October 2026
6.A.R.S. § 42-5102, Tax exemption for sales of food — Arizona State Legislature · accessed 9 October 2026
7.A.R.S. § 42-6004, Exemption from municipal tax — Arizona State Legislature · accessed 9 October 2026
8.A.R.S. § 42-1125, Civil penalties — Arizona State Legislature · accessed 9 October 2026
9.Privilege (Sales) Use Tax — City of Phoenix · accessed 9 October 2026
10.New 2026 threshold amounts for the Retail Sales and Use Tax two-level tax rate structure — City of Phoenix · accessed 9 October 2026
11.Transaction Privilege (TPT) Tax — City of Mesa · accessed 9 October 2026
12.Sales Tax Rates in Tucson and Pima County — Pima County Public Library · accessed 9 October 2026
13.Taxes — City of Scottsdale · accessed 9 October 2026

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We provide tools, guides and information for general educational purposes only. Always refer to official government websites for the latest and most accurate information.