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Transaction Privilege Tax

Although typically referred to as a sales tax, the Arizona deal privilege tax (TPT) is really a tax on a vendor for the opportunity of doing company in the state. Various company activities undergo deal advantage tax and need to be certified.

If a service is offering an item or participating in a service topic to TPT, a license from the of Revenue (ADOR) would likely be required in addition to a transaction opportunity tax or business/occupational license from the city or cities in which the organization is based and/or operates.

ADOR gathers the tax for the counties and cities; nevertheless, tax rates vary depending upon the kind of company activity, the city and the county.

Please note that services with multiple locations or service lines can opt to accredit and report for each area separately or have a combined license (and report aggregate sales). The cost for each license per location is $12.

Request a TPT License

Glossary of Terms

TPT and Use Tax:

Individuals are subject to utilize tax when a merchant does not gather tax for tangible individual residential or commercial property utilized, kept or consumed.

Those people and companies based on utilize tax consist of the following:

– An out-of-state merchant or energy organization making sales of concrete individual residential or commercial property to Arizona purchasers.
– Arizona homeowners who buy goods using a resale certificate, and the items are used, stored or consumed in Arizona contrary to the purpose stated on the certificate.
– Arizona homeowners who purchase items in which another state’s sale tax or other excise tax was imposed and the rate of that tax is less than Arizona’s usage tax rate.

See our Reporting Guide for hassle-free access to TPT-related assistance and resources.

See the TPT Estimated Payment page for info and how to pay.

What’s New with TPT?

New Age Rule for TPT License

Effective September 14, 2024, persons under the age of 19 might operate a company without a deal benefit tax (TPT) license if that organization does not generate more than $10,000 in gross earnings in a fiscal year. See Arizona Revised Statutes (A.R.S.) § 42-5045.

Additionally, persons under the age of nineteen and who run a service occasionally, are not required to have any type of license or permit for service for city and county purposes. Please connect straight to the appropriate city or county with business license or allow concerns.

If a person under the age of nineteen is currently operating an organization with a TPT license (with an adult consisted of on the license) and business does not create more than $10,000 in gross sales per year, then the license may be cancelled with the effective periods starting October 1, 2024. Please make sure that returns are filed based upon the filing frequency designated at the time of registration. If a filing is missed out on or a last return is not submitted prior to cancellation of the TPT license, then charges and interest might accrue. See directions on how to cancel a TPT license.

Residential Rental Tax Changes

Starting January 1, 2025, residential rental residential or commercial property owners should no longer gather and remit any city transaction opportunity tax (TPT) on the earnings obtained from long-lasting accommodations stays of one month or more to ADOR. (Laws 2023, Chapter 204 and A.R.S. § 42-6004 (H)).

This uses to licensees that are signed up and have submitted utilizing company code 045 suggesting that license is taken part in business classification of property leasing. Residential leasing is the rental of genuine residential or commercial property for a duration of 30 or more consecutive days for property (i.e. noncommercial) purposes just.

Currently, there is no state or county tax enforced on residential leasings, and the upcoming change to the tax law will eliminate the city TPT. While there will no longer be a city TPT obligation starting January 1, 2025, you should still register the residential or commercial property with the county assessor to comply with property owner renter laws and other compliance requirements from government entities. Owners can still apply for prior durations online even if the license has been canceled or the place has actually been closed.

For tax durations before January 1, 2025:

– You need to still abide by filing and payment requirements, and
– These periods stay based on investigate as permitted by statute.

Please note: Hotel, motel, or other short-term lodging companies that schedule stays for less than one month should still collect and remit TPT under the transient lodging or hotel category.

What Should I Do?

Please continue to gather, file, and pay residential rental TPT for durations through December 31, 2024, filed in January 2025. For periods starting January 1, 2025 and thereafter, it is no longer needed to gather, submit, and pay domestic rental TPT.

No additional action or steps need to be taken to cancel the license. Know that cancelation of the license will not excuse you from any liabilities related to durations before January 1, 2025. If liabilities are unpaid, enforcement actions might be taken against you. Visit to AZTaxes.gov to solve any impressive liabilities or missing returns for the license.

Tax Rate Change

For tax rate changes, please see Model City Tax Code’s Rate and Code Updates and TPT Newsletters.

Arizona Business One Stop is an online portal that provides a single online area with individualized tools to plan, begin, grow, move and close companies in Arizona. It is a safe and secure digital experience that does not need in-person interaction.

Arizona-based services need to go to Business One Stop (B1S) if forming their business for the very first time. Please note: New Business One Stop TPT licenses submissions will direct you to pay at AZTaxes.gov. TPT filings, payments, and renewals are just available at AZTaxes.gov at this time.

Businesses needing upgraded information on deal opportunity tax can access ADOR’s regular monthly newsletter, TPT Tax Rate Table and Model City Tax Code modifications here by clicking the proper month and year. For older info, please visit our archives.

Businesses can also register for ADOR’s TPT newsletter and get updates through email or text signals. They can receive notices regarding TPT due dates, city tax rate modifications, license renewals and new functions on AZTaxes.gov.