What is Transaction Privilege (Sales) & Use Tax?

Transaction privilege tax is commonly referred to as a sales tax.  Arizona's Transaction Privilege Tax (TPT) is imposed on the privilege of conducting business in this state. It differs from a sales tax in that the tax is imposed on the business, not the purchaser. While a business may pass the tax on to the consumer in the manner of a sales tax, the business is responsible for reporting and remitting the appropriate tax on their business activity. 

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Tax Reporting Requirements & Payment of Tax  

Businesses are required to report and pay Phoenix privilege sales tax on their taxable business activity on a monthly, quarterly, or annual frequency. Reporting frequency is based upon taxable gross income.  You may request a change in filing frequency after you have established a minimum of 6 months of reporting history.  All new accounts must file monthly for a minimum of six months prior to requesting a change in filing frequency.

Reporting Frequency Annual Taxable Gross Income Due Dates
Annual$0 to $5,000 January 20th of each year
Quarterly$5,001 to $49,999 20th of the month following the reporting quarter (Example: March 2011 return is due by April 20, 2011)
Monthly$50,000 or greater 20th of the month following the end of the month (Example: January 2011 return is due by February 20, 2011)
  • The return is delinquent if not received before the close of business on the last business day of the month. Postmarks are not proof of timely filing.  A tax return is due even if you have zero receipts.  Please mark the applicable "no activity" box on the tax return form.

Penalty & Interest

A late return is subject to a penalty of 5% per month until filed. The late tax balance is subject to a one-time 10% penalty. Total penalties cannot exceed 25% of the tax due. A delinquent tax balance is also subject to interest on the balance at the end of each month from the month the tax becomes delinquent. See interest rates.