Transaction Privilege (Sales) and Use Tax

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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.


UPDATE!

New 2018 threshold amounts for the Retail Sales and Use Tax two-level tax rate structures under the Comprehensive Transportation Plan effective January 1, 2018:


This important change affects retailers and businesses with Use Tax liability that engage in the retail sales or use of single items of tangible personal property, whose value exceeds the current threshold of $10,000.  This change does NOT affect retailers or businesses with Use Tax liability that engage in the retail sales or use of single items of tangible personal property, whose value is equal to or below the current threshold of $10,000.  It ONLY affects businesses with retail sales or use of single items of tangible personal property whose value is between $10,001 and the new threshold of $10,303. See the attached Tax Bulletin for further information.

What's new in TPT - Transaction Privilege (Sales) Tax Simplification?

  • Centralized Licensing and Reporting:  Effective January 1, 2017, the Arizona Department of Revenue became the single point of administration and collection of state, county and municipal Transaction Privilege Tax. Taxpayers are required to file and pay for all tax jurisdictions, including the City of Phoenix, to the State. We strongly encourage taxpayers to file online now via the State’s AZTaxes.gov website.

  • The Arizona Department of Revenue introduced its Transaction Privilege Tax (TPT) electronic filing program for Property Managers (PMCs) in 2018.  Beginning with the January 2018 filing period, the new Residential Rental Bulk Upload Program improved the TPT filing process by allowing PMCs to file and pay transaction privilege tax on behalf of their clients using the new electronic filing program. For further information, please visit the Arizona Department of Revenue's Residential Rental website.

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DID YOU KNOW?

Phoenix offers free online filing of sales tax returns and payments for tax periods prior to January 2017. To "go green" and sign up for electronic filing, please click the button below.

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