Arizona Sales Tax (TPT) 2026: Rates & Filing

Table of content

Key takeaways

Arizona TPT rates: Arizona’s sales tax is the Transaction Privilege Tax, with a state rate of 5.6%. City, county and special-district taxes push combined rates to roughly 8–11%.
Economic nexus: Remote sellers must obtain a TPT license once gross sales into Arizona exceed $100,000 in the current or previous calendar year. There is no transaction-count threshold.
Filing & penalties: Returns are due on the 20th of the month after the period and are late after the last business day of that month. Late filing costs 4.5% per month, up to 25%.

Arizona sales tax key facts (2026)

Item	Arizona
Statewide TPT rate	5.6%
Combined rate range	~8–11% (varies by city/county)
Economic nexus threshold	$100,000 (current or prior year)
Transaction-count threshold	None
Sourcing	Origin (in-state sellers) / Destination (remote)

Collect and file Arizona sales tax with Taxually: LumaTax monitors your nexus, registers you and files your returns.

Is SaaS taxable?

Yes.

Item	Arizona
Groceries (home consumption)	Exempt (state and, since July 1 2025, local)
Return due date	20th of the month after the reporting period
Governing agency	Arizona Department of Revenue

What is the sales tax rate in Arizona?

Arizona’s sales tax is called the Transaction Privilege Tax (TPT) — technically a tax on the privilege of doing business, legally owed by the seller (though normally passed on to the buyer). The state TPT rate is 5.6%, and city, county, and special-district taxes push combined rates to roughly 8–11% depending on location (Phoenix is about 8.6%; some areas exceed 11%).

Look up the exact combined rate by address using the Arizona Department of Revenue rate tables.

Do you have sales tax nexus in Arizona?

Nexus is the connection that obligates your business to collect and remit Arizona sales tax. You can establish it two ways — physically or economically. Either one is enough.

Physical nexus

You have physical nexus if you have a tangible presence in Arizona, such as:

An office or place of business in Arizona
Employees working in Arizona more than 2 days per year
Goods stored in a warehouse in Arizona
Delivering merchandise in vehicles your business owns
Independent contractors or representatives operating in Arizona more than 2 days per year

Economic nexus

Remote sellers establish economic nexus once gross sales into Arizona exceed $100,000 in the current or previous calendar year (the threshold has been $100,000 since 2021). There is no transaction-count threshold. After crossing it, you must obtain a TPT license and begin collecting — generally from the first day of the month after 30 days have passed.

Marketplace facilitators (Amazon, Etsy, and similar) collect and remit TPT on their sellers’ Arizona sales, but those sales still count toward your threshold.

What is taxable in Arizona?

Tangible personal property is generally taxable, with exemptions for groceries, prescription medications, medical devices, and certain machinery. Most services are not taxable, though there are exceptions. Arizona also imposes a 5.6% use tax on untaxed goods bought from out of state.

Separately stated shipping charges are generally exempt, but handling charges are taxable — so how you itemize an invoice matters.

Is SaaS taxable in Arizona?

Yes. Arizona treats SaaS as taxable under the TPT, as a form of tangible personal property / rental of software.

How is food taxed in Arizona?

Groceries for home consumption are exempt from Arizona TPT at the state level — and, as of July 1, 2025 (HB 2061), cities and towns may no longer tax food for home consumption either. Prepared food and food consumed on the premises remain taxable at the applicable rate.

How to register for an Arizona sales tax permit

New businesses must obtain a TPT license from the Arizona Department of Revenue. Taxually can register for you, or you can apply online via AZTaxes, by mailing the Joint Tax Application (JT-1), or in person at a Department office.

Be ready with: ownership type; FEIN or SSN; legal business name; phone, mailing address, and email; physical business location; Arizona start date; employee details; NAICS code; and owner/officer identification. A TPT license costs $12 per location, and you also register in each city where you do business (city fees run about $2–$50).

How to collect sales tax in Arizona

Arizona uses origin-based sourcing for in-state sellers — collect at your business location’s rate. Out-of-state sellers with nexus collect based on the destination (the customer’s delivery address).

Filing and paying Arizona sales tax

Filing frequency is set by your estimated annual TPT liability: monthly above $8,000, quarterly for $2,000–$8,000, and annually under $2,000. Returns are due the 20th of the month following the reporting period and are considered late after the last business day of that month.

File and pay online through AZTaxes, or by mail using Form TPT-EZ (in-state) or TPT-2 (out-of-state). Online filing is mandatory once your prior-year liability reaches $1,000,000 or more. Taxually’s software automates the whole process.

Penalties for late or non-compliant filing

Failing to file or pay on time triggers these penalties:

Late filing: 4.5% of the tax per month, up to 25%.
Late payment: 0.5% of the tax per month.
Interest accrues on delinquent amounts at the IRS rate.

FAQ

Frequently asked questions

What is the TPT (sales tax) rate in Arizona in 2026?

The state TPT rate is 5.6%. With city, county, and special-district taxes, combined rates run roughly 8–11% depending on location.

What is the economic nexus threshold for Arizona?

$100,000 in gross Arizona sales in the current or previous calendar year. There is no transaction-count threshold.

Is SaaS taxable in Arizona?

Yes. Arizona treats SaaS as taxable under the TPT.

Are groceries taxed in Arizona?

No. Groceries for home consumption are exempt statewide, and as of July 1, 2025 cities may no longer tax them either. Prepared and on-premises food is still taxable.