Although frequently described as a sales tax, the Arizona transaction advantage tax (TPT) is in fact a tax on a supplier for the opportunity of doing organization in the state. Various company activities go through deal benefit tax and should be accredited.

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

ADOR gathers the tax for the counties and cities; nevertheless, tax rates differ depending upon the type of service activity, the city and the county.

Please note that businesses with multiple areas or service lines can decide to certify and report for each location independently or have a consolidated license (and report aggregate sales). The expense for each license per area is $12.

Request a TPT License

Glossary of Terms

TPT and Use Tax:

Individuals undergo utilize tax when a seller does not collect tax for tangible personal residential or commercial property used, stored or consumed.

Those individuals and companies subject to utilize tax include the following:

- An out-of-state retailer or energy service making sales of concrete individual residential or commercial property to Arizona buyers.

- Arizona citizens who purchase products utilizing a resale certificate, and the products are used, kept or consumed in Arizona contrary to the purpose mentioned on the certificate.

- Arizona residents who purchase products in which another state's sale tax or other excise tax was imposed and the rate of that tax is less than Arizona's use tax rate.

See our Reporting Guide for convenient access to TPT-related guidance and resources.

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

What's New with TPT?

New Age Rule for TPT License

Effective September 14, 2024, individuals under the age of 19 might run a service without a deal advantage tax (TPT) license if that service 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 company occasionally, are not needed to have any kind of license or permit for organization for city and county purposes. Please reach out straight to the pertinent city or county with service license or permit questions.

If a person under the age of nineteen is presently running a service with a TPT license (with an adult included on the license) and the organization does not generate more than $10,000 in gross sales annually, then the license might be cancelled with the efficient durations beginning October 1, 2024. Please guarantee that returns are filed based upon the filing frequency designated at the time of registration. If a filing is missed out on or a final return is not submitted prior to cancellation of the TPT license, then penalties and interest may accumulate. See instructions on how to cancel a TPT license.

Residential Rental Tax Changes

Starting January 1, 2025, residential rental residential or commercial property owners need to no longer gather and remit any city deal benefit tax (TPT) on the income obtained from long-term accommodations stays of 30 days or more to ADOR. (Laws 2023, Chapter 204 and A.R.S. § 42-6004 (H)).

This uses to licensees that are registered and have actually filed utilizing service code 045 indicating that license is engaged in business category of residential leasing. Residential rental is the rental of real residential or commercial property for a period of 30 or more successive days for property (i.e. noncommercial) purposes just.

Currently, there is no state or county tax enforced on domestic rentals, and the upcoming modification to the tax law will get rid of the city TPT. While there will no longer be a city TPT responsibility beginning January 1, 2025, you should still register the residential or commercial property with the county assessor to abide by proprietor occupant laws and other compliance requirements from government entities. Owners can still declare previous durations online even if the license has been canceled or the location has actually been closed.

For tax periods before January 1, 2025:

- You must still abide by filing and payment requirements, and

- These durations stay based on investigate as allowed by statute.

Please note: Hotel, motel, or other transient accommodations services that book stays for less than 1 month need to still gather and remit TPT under the short-term lodging or hotel classification.

What Should I Do?

Please continue to gather, submit, and pay domestic rental TPT for durations through December 31, 2024, filed in January 2025. For durations beginning January 1, 2025 and afterwards, it is no longer needed to collect, submit, and pay property rental TPT.

No additional action or actions need to be required to cancel the license. Know that cancelation of the license will not excuse you from any liabilities associated with durations before January 1, 2025. If liabilities are overdue, enforcement actions might be taken versus you. Log on to AZTaxes.gov to deal with any exceptional 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 website that provides a single online area with personalized tools to plan, begin, grow, move and close services in Arizona. It is a safe digital experience that does not need in-person interaction.

Arizona-based companies ought to go to Business One Stop (B1S) if forming their organization 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 only readily available at AZTaxes.gov at this time.

Businesses requiring updated info on deal advantage tax can access ADOR's regular monthly newsletter, TPT Tax Rate Table and Model City Tax Code modifications here by clicking on the suitable month and year. For older information, please visit our archives.

Businesses can also sign up for ADOR's TPT newsletter and get updates through e-mail or text alerts. They can get notices concerning TPT due dates, city tax rate changes, license renewals and brand-new functions on AZTaxes.gov.