What is the Arizona sales tax? Arizona: Sales Tax Handbook

Arizona:

Arizona Sales Tax Rate AZ Sales Tax 2016

State Sales Tax Local Sales Tax Range Average Local Tax Average Combined Tax Max Combined Tax
5.60% 0.25% - 5.30% 2.103% 7.703% 10.9%

2016 Arizona Sales Tax Handbook

These rankings show how the Arizona sales tax compares to the other 49 states + DC. The state with the highest sales tax is ranked 1st, and states with the same sales tax have a tie rank.

Arizona's Transaction Privilege Tax By The Numbers:

Arizona has a higher-than-average sales tax, including when local sales taxes from Arizona's 92 local tax jurisdictions are taken into account.


Rankings by Average State + Local Sales Tax:

  Ranked 12th highest by combined state + local sales tax

  Ranked 10th highest by per capita revenue from state + local sales taxes ($1,323 per capita)


Rankings by State Sales Tax Only:

  Ranked 9th highest by state sales tax rate

  Ranked 14th highest by per capita revenue from the statewide sales tax ($982 per capita)



Download Arizona datasheet Printable PDF Arizona Sales Tax Datasheet

Arizona has a statewide transaction privilege tax rate of 5.60%, which has been in place since 1933.

Municipal governments in Arizona are also allowed to collect a local-option sales tax that ranges from 0.25% to 5.30% across the state, with an average local tax of 2.103% (for a total of 7.703% when combined with the state sales tax). The maximum local tax rate allowed by Arizona law is 5.30%. You can lookup Arizona city and county sales tax rates here.

This page provides an overview of the sales tax rates and laws in Arizona. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Arizona Sales Tax Handbook's Table of Contents above.

What is exempt from sales taxes in Arizona?

Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Arizona taxes five types of commonly-exempted goods:


Clothing

  5.6%

Groceries

  EXEMPT

Prepared Food

  5.6%

Prescription Drugs

  EXEMPT

OTC Drugs

  5.6%

For more details on what types of goods are specifically exempt from the Arizona sales tax see Arizona sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Arizona? Taxation of vehicle purchases in particular are discussed in the page about Arizona's sales tax on cars.

Are services subject to sales tax in Arizona?

"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Arizona, specified services are taxable.

About the Arizona Sales Tax

The state of Arizona has a slightly complicated sales tax system. The system Arizona utilizes is called the Transaction Privilege Tax, which is also known as the TPT. This tax system is not technically a sales tax system, although they are similar. It is a gross receipts tax, which means that the taxes are levied from the gross receipts of each vendor as opposed to the liability of the buyer (although vedors can pass the TPT on to the buyer, and most do). However, in addition to the TPT, cities and counties have the ability to add various local taxes to the total compounded rate. These local additions may vary significantly depending on which jurisdiction you are in.

It is also worth noting that Indian reservations in the state of Arizona apply their own sales tax, which is usually higher than the average rate.

Is the Arizona Sales Tax Destination-Based or Origin-Based?

Arizona is a origin-based sales tax state, which means sales tax rates are determined by the location of the vendor, not by the location of the buyer. The origin-based method of determining sales tax is less complicated for vendors than destination-based sales tax, because all in-state buyers are charged the same sales tax rate regardless of their location.

Is Arizona a Streamlined Sales Tax State?

Arizona is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.

Contact the Arizona Department of Revenue

The Arizona Transaction Privilege Tax is administered by the Arizona Department of Revenue. You can learn more by visiting the sales tax information website at www.azdor.gov.

Phone numbers for the Transaction Privilege Tax division of the Department of Revenue are as follows:

  • Local Phone: (602) 255-2060
  • Toll-Free Phone: (800) 843-7196

Learn More: Our Book Recommendations

If you would like to learn more about how to manage your Arizona sales taxes, we recommend the following books:


Small Business Taxes For Dummies

This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.

Buy on Amaxon

A Guide to Sales and Use Tax

This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.

Buy on Amaxon

Simplify Arizona sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.


Arizona Sales Tax Rates by Zip Code:

Need an updated list of Arizona sales tax rates for your business? Download our Arizona sales tax database!


** This Document Provided By SalesTaxHandbook **
Source: http://www.salestaxhandbook.com/arizona