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.
New 2024 threshold amounts for the Retail Sales and Use Tax two-level tax rate structures under the Comprehensive Transportation Plan effective January 1, 2024:
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 $11,631. 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 $11,631. It
ONLY affects businesses with retail sales or use of single items of tangible personal property whose value is between $11,632 and the new threshold of $13,886. 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 website:
Annual Transaction Privilege Tax (TPT) License Renewals: The annual TPT license fee renewal billings for a subsequent year will be issued in or around November of the current year by the Arizona Department of Revenue. These renewal fees are due January 1, and penalties will be assessed for all unpaid renewal fees after January 31. Please visit the State’s website for general renewal information. In collaboration with the city of Phoenix, the Arizona Department of Revenue offers a variety of taxpayer education services pertaining to transaction privilege tax (TPT) and use tax for businesses. Click here to learn more.
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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.