Arizona Sales Tax Rates

How to register for sales tax in Arizona

Arizona requires businesses selling taxable goods or services to register for a transaction privilege tax (TPT) license, which essentially functions as your sales tax license.

Multiple Registration Options:

There are a few ways to register for a TPT license:

1. Arizona Business One Stop (ABOS): This is the recommended online portal for most businesses. It provides a user-friendly platform to register, file returns, and make tax payments. You can access ABOS at https://businessonestop.az.gov/.
2. Joint Tax Application (JT-1): You can download and complete a paper form (JT-1) and mail it to the Arizona Department of Revenue (ADOR).  This method might be preferable if you’re also registering for other state taxes simultaneously using the same form.  The JT-1 form can be found on the ADOR website: https://azdor.gov/
3. In-Person Registration:  While less common, you can visit an ADOR office in person to submit your completed JT-1 application.

Information Needed:

Regardless of the chosen registration method, you’ll typically need to provide the following information:

• Business name and legal structure (e.g., sole proprietorship, LLC)
• Federal Employer Identification Number (FEIN)
• Business address
• Contact information
• Type of business activity
• Information about any locations where you’ll conduct taxable sales (if applicable)

Additional Steps:

• Once you register, you might need to apply for a TPT license account number for each physical location where you conduct taxable sales.
• ADOR will typically mail your TPT license after processing your registration.

How to collect sales tax in Arizona

In Arizona, collecting sales tax involves these key steps:

1. Charge the Correct Rate:
   • The combined sales tax rate you need to collect will depend on the specific location where the sale is made.
2. Separate the Tax Amount:
   • It’s a good practice to separately itemize the sales tax amount on your receipts or invoices. This transparency helps customers understand the breakdown of the total cost.
3. Collect the Tax:
   • You’re responsible for collecting the sales tax from your customers at the point of sale.
4. Record the Transaction:
   • Maintain accurate records of your sales and the sales tax you collect.
   • These records are crucial for filing your sales tax return with the Arizona Department of Revenue.

How to get a sales tax permit/license in Arizona?

To obtain a sales tax permit in Arizona, register online through the Arizona Department of Revenue’s Transaction Privilege Tax (TPT) Online Application portal. Provide essential business details, such as your business name, address, Federal Employer Identification Number (FEIN) or Social Security Number (SSN), and information about the business owners. Complete the application for a TPT License, which allows you to collect and remit sales tax on taxable transactions.

When are Arizona’s sales tax returns due?

Here’s a breakdown of Arizona TPT return due dates:

Filing Frequency:

• Monthly:  If you expect to owe more than $7,500 in TPT liability per quarter, you’ll likely be assigned a monthly filing frequency.  The return for each month is due by the last business day of the following month.
• Quarterly:  If your anticipated TPT liability falls between $2,500 and $7,500 per quarter, you’ll likely be assigned a quarterly filing frequency.  The quarterly return is due by the last day of the month following the end of the quarter.  Here’s a breakdown of quarterly deadlines:
  • 1st Quarter (Jan – Mar): Due April 30th
  • 2nd Quarter (Apr – Jun): Due July 31st
  • 3rd Quarter (Jul – Sep): Due October 31st
  • 4th Quarter (Oct – Dec): Due January 31st of the following year
• Annually:  If your anticipated TPT liability is less than $2,500 per year, you might be assigned an annual filing frequency.  The annual return is due on the last day of the month following the end of your tax year.

Is anyone exempt from sales tax in Arizona?

In Arizona, there are exemptions from the transaction privilege tax (TPT), which essentially functions as the state’s sales tax, for certain categories of purchases. Here’s a breakdown of who might be exempt from Arizona sales tax:

Individuals:

• Generally, Arizona residents don’t pay sales tax on most groceries (excluding prepared food).
• Prescription drugs and certain medical equipment are also exempt.

Organizations:

• Qualified non-profit organizations may be exempt from sales tax on purchases related to their exempt activities (e.g., charitable organizations buying supplies for their programs).
• Government agencies (federal, state, and local) are generally exempt from sales tax on purchases made for governmental purposes.

Transactions:

• Sales of certain business-to-business goods and services might be exempt if used directly in the production process (refer to ADOR guidelines for details).
• Casual sales between individuals (e.g., garage sale purchases) are typically exempt.

Do I Have to Collect TPT from Arizona Customers if I Sell on Amazon, Walmart, eBay, or Etsy?

No.

Arizona has a marketplace facilitator law, requiring platforms like Etsy or Amazon to collect sales tax of third-party sellers on their platforms. However, if a marketplace facilitator’s sales don’t exceed $100,000, they don’t have to register, collect, or remit Arizona sales tax.