Although commonly referred to as a sales tax, the Arizona deal advantage tax (TPT) is really a tax on a supplier for the benefit of doing service in the state. Various service activities go through transaction opportunity tax and must be accredited.

If a company is offering an item or engaging in a service topic to TPT, a license from the Arizona Department of Revenue (ADOR) would likely be required in addition to a transaction advantage tax or business/occupational license from the city or cities in which the company is based and/or runs.

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

Please note that organizations with numerous locations or organization lines can decide to accredit and report for each place individually or have a consolidated license (and report aggregate sales). The cost for each license per area is $12.

Request a TPT License

Glossary of Terms

TPT and Use Tax:

Individuals are subject to utilize tax when a retailer does not gather tax for tangible personal residential or commercial property utilized, kept or taken in.

Those individuals and services subject to utilize tax consist of the following:

- An out-of-state merchant or energy service making sales of tangible personal residential or commercial property to Arizona buyers.
- Arizona citizens who acquire items using a resale certificate, and the items are utilized, kept or consumed in Arizona contrary to the function mentioned on the certificate.
- Arizona residents who buy items in which another state's sale tax or other excise tax was enforced 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 make payments.

What's New with TPT?

New Age Rule for TPT License

Effective September 14, 2024, individuals under the age of 19 might operate a business without a transaction advantage tax (TPT) license if that business does not create 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 business occasionally, are not needed to have any kind of license or allow for business for city and county purposes. Please reach out directly to the relevant city or county with organization license or allow questions.

If an individual under the age of nineteen is currently operating an organization with a TPT license (with an adult included on the license) and business does not generate more than $10,000 in gross sales per year, then the license may be cancelled with the effective durations starting October 1, 2024. Please make sure that returns are filed based on the filing frequency assigned at the time of registration. If a filing is missed or a final return is not submitted prior to cancellation of the TPT license, then penalties and interest may accrue. See instructions on how to cancel a TPT license.

Residential Rental Tax Changes

Starting January 1, 2025, domestic rental residential or commercial property owners should no longer gather and remit any city deal benefit tax (TPT) on the income obtained from long-term lodging stays of 1 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 filed using service code 045 suggesting that license is participated in the service classification of domestic leasing. Residential rental is the rental of genuine residential or commercial property for a duration of 30 or more consecutive days for property (i.e. noncommercial) functions only.

Currently, there is no state or county tax troubled property leasings, and the upcoming modification to the tax law will remove the city TPT. While there will no longer be a city TPT obligation starting January 1, 2025, you must still register the residential or commercial property with the county assessor to comply with landlord tenant laws and other compliance requirements from federal government entities. Owners can still declare prior periods online even if the license has been canceled or the area has been closed.

For tax durations before January 1, 2025:

- You need to still adhere to filing and payment requirements, and
- These durations stay based on audit as permitted by statute.

Please note: Hotel, motel, or other short-term lodging businesses that book stays for less than thirty days need to still gather and remit TPT under the short-term lodging or hotel category.

What Should I Do?

Please continue to gather, file, and pay domestic 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, file, and pay residential rental TPT.

No more action or actions 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 unsettled, enforcement actions might be taken versus you. Log on to AZTaxes.gov to deal with any outstanding liabilities or missing out on returns for the license.

Tax Rate Change

For tax rate modifications, please visit 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 place with personalized tools to prepare, start, grow, move and close businesses in Arizona. It is a safe and secure digital experience that does not need in-person interaction.

Arizona-based companies should visit 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 transaction opportunity tax can access ADOR's month-to-month newsletter, TPT Tax Rate Table and Model City Tax Code modifications here by clicking the suitable month and year. For older information, please visit our archives.

Businesses can also subscribe to 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 brand-new features on AZTaxes.gov.