Similar to other cities in Arizona and the state of Arizona, Phoenix imposes a transaction privilege (sales) tax on certain business activities. The city tax is in addition to the tax imposed by the state. While the city rate varies by business activity, it is two and three tenths percent (2.3%) on most activities. A business engaged in taxable activity will need to obtain a transaction privilege (sales) tax license to report their Phoenix transaction privilege tax (TPT) liability.
In coordination with ADOR, the City of Phoenix is encouraging the transition for businesses currently reporting to Phoenix for their business activity ahead of the anticipated State deadline. In order to ensure that your business activity is reported accurately and completely at ADOR, you may begin applying for new TPT Licenses, and filing and reporting your Transaction Privilege Tax liability due to the City of Phoenix with the Arizona Department of Revenue on your next TPT return due to ADOR.
What's new in TPT - Transaction Privilege (Sales) Tax Simplification?
- New TPT Applications: Effective October 1st, Phoenix will no longer accept new TPT applications. You must apply for a TPT license directly with the Arizona Department of Revenue.
- TPT License Renewals: The Arizona Department of Revenue will process all TPT license renewals for all jurisdictions this fall. Businesses will receive one renewal notice per license from the State regardless of where the business is located. Please visit the Arizona Department of Revenue's webpage and your renewal notice in November/December for more information. See our Transition to ADOR bulletin for specific information related to Phoenix TPT licenses.
- Centralized Licensing and Reporting: Beginning with your January 2017 TPT return filed in February 2017, the Arizona Department of Revenue will be the single point of administration and collection of state, county and municipal transaction privilege tax. Taxpayers will be able to file and pay for all jurisdictions to the State. This means that if you currently report to Phoenix, your last return filed with Phoenix will be your December 2016 return filed in January 2017. We strongly encourage taxpayers to file online via the State's AZTaxes.gov website for faster processing.
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DID YOU KNOW?
Phoenix now offers free online filing of sales tax returns and payments. To "go green" and sign up for electronic filing, please click the button below.
Phoenix offers a free transaction privilege and use tax seminar. Click here to learn more.