Getting a sales tax permit in Arizona isn’t just about collecting tax—it’s about understanding the state’s unique Transaction Privilege Tax (TPT) system, where the tax is levied on the seller, not the buyer. If you’re doing business in Arizona and think you’re charging sales tax like in other states, you’re already a step behind.
This guide breaks down exactly what the Arizona TPT license is, who needs one, how to register, what to watch for, and how to stay compliant. And if you’d rather not deal with the complexity, Hands Off Sales Tax (HOST) is your partner for hands-off, error-free tax compliance.
What Is the Arizona TPT License?
In Arizona, what most call “sales tax” is actually the Transaction Privilege Tax (TPT)—a tax imposed on vendors for the privilege of operating in the state. If your business sells goods or provides taxable services, you need a TPT license from ADOR, acquired via AZTaxes.gov or a joint application form that covers state and local jurisdictions.
Each business activity—retail, contracting, restaurant, rental, and more—is classified under a specific NAICS code, and your license must reflect all applicable activities. You can apply for multiple activity licenses under one EIN or opt for separate licenses per location or activity.
TPT licensing involves a state license fee ($12) plus any county or city licenses, which are often bundled via a consolidated application. ADOR collects both state and local taxes through unified filing—ensuring your license covers every jurisdiction where you operate. Whether you’re based in Phoenix or shipping statewide, an Arizona TPT license simplifies compliance by centralizing your tax obligations under one system.
Who Needs a TPT License?
First, let’s clarify whether your Arizona business must register for a Transaction Privilege Tax (TPT) license. Here’s what triggers the requirement:
Physical and Economic Nexus
- Physical presence includes owning or leasing space, having employees or agents in Arizona, or storing inventory—such as FBA stock—in-state.
- Economic nexus is triggered if your direct sales into Arizona exceed $100,000 in the current or prior year, per H.B. 2757.
- If you meet either requirement, you must obtain a TPT license through AZTaxes.gov and begin collecting and remitting tax.
Special-Event Vendors
- Selling at craft fairs, festivals, or pop-ups in Arizona typically creates nexus—even if you only set up temporarily. These cases are often overlooked, but TPT licensing still applies.
Under‑19 Exception & Residential Rental Changes
- Since September 2024, individuals under 19 with less than $10,000 in annual revenue are exempt from needing a TPT license.
- Effective January 1, 2025, residential long-term rentals (30+ days) are no longer subject to TPT, and licenses tied solely to these rentals won’t be renewed.
Understanding these rules ensures you’re properly licensed and collecting the correct tax.
Permit Types & Fees
Here’s a comprehensive breakdown of Arizona TPT license options, designed to ensure you pick the right setup—avoid overpaying, under-licensing, or missing coverage.
Standard TPT License
- Applies when you have a physical presence or economic nexus in Arizona.
- Fee: $12 per location or business activity jurisdiction, whether city or county; these may be consolidated into one license for multiple locations under the same EIN.
- Local jurisdictions like Phoenix, Scottsdale, Mesa, and others may impose additional license fees (e.g., Phoenix charges $50 annually) .
Remote or Marketplace Seller License
- For businesses that exceed the $100,000 economic nexus threshold but remain physically out-of-state.
- Flat $12 fee covering all required jurisdictions for the calendar year; the license can be renewed annually without a fee if thresholds remain valid.
Additional City Licenses
- Required for out-of-state businesses selling into multiple Arizona cities not covered by county licensing alone.
- Each city where nexus exists mandates a separate license or consolidated local coverage, ensuring tax compliance across all jurisdictions.
Why it matters: Choosing the right license type ensures you’re securely covered, avoid redundant fees, and stay compliant across jurisdictions without underpaying or over-registering.
How to Register for a TPT License
Let’s walk through the fastest, most reliable way to secure your Arizona TPT license—available fully online via AZTaxes.gov, with alternative options for paper or in-person filing.
Online Registration via AZTaxes.gov
- Register at AZTaxes.gov, complete the Joint Tax Application (Form JT-1), and your TPT license number is issued instantly—the official license certificate arrives by mail in about 7–10 business days.
- Only the business owner or principal officer can sign; agent access can be later granted within the portal—no need to share personal credentials.
Paper or In-Person Application
- Contractors and remote sellers may submit the JT-1 form via mail or in person at ADOR locations; processing takes around 2 weeks.
- In-person services are available in Phoenix, Mesa, and Tucson, but visit at least 45 minutes before closing.
EIN & Identification Notes
- Separate FEIN required for single-member LLCs; sole proprietors may use an SSN.
- Ensure all owner/officer information matches ADOR records.
By using online registration, you not only get your TPT license faster, but also lay the groundwork for seamless filings. Paper options are slower by comparison, but still available where online doesn’t fit.
Filing, Remittance & Recordkeeping
Here’s how to handle your TPT obligations smoothly and avoid compliance pitfalls:
Filing Frequency
Your filing schedule—monthly, quarterly, or annually—is based on your combined estimated state, county, and municipal TPT liability:
- Annual: up to $2,000
- Quarterly: $2,000–$8,000
- Monthly: over $8,000
You may adjust your filing frequency via ADOR’s Business Account Update Form, effective the next reporting period.
Deadlines & Payments
- Returns are due by the 20th of the following month, or the next business day for weekend deadlines.
- Payments must be made electronically (EFT required) if your annual liability exceeds $500.
Zero-Returns
Even without sales, you’re required to file a zero-return to maintain active compliance. Missing this can trigger $25 penalties and raise audit flags.
Record Retention
Maintain TPT documentation—including sales records, exemption certificates, and filed returns—for a minimum of 4 years, and ideally up to 7 years for exemptions or special sales.
By following these guidelines, you’ll stay organized, compliant, and audit-ready.
How HOST Makes Arizona Sales Tax & TPT Compliance Effortless
Arizona might call it a Transaction Privilege Tax (TPT), but from a business owner’s perspective—it feels exactly like sales tax. And whether you’re dealing with state filings, local jurisdiction add-ons, or complex remittance rules, HOST handles it all so you don’t have to.
Here’s how HOST supports full TPT compliance in Arizona:
- TPT License Registration: HOST helps you register through AZTaxes.gov, covering all state, county, and city-level licenses accurately—right from the start.
- Filing & Remittance: We prepare and file your TPT returns on time, including zero-returns, and ensure all payments go through correctly, even if you’re required to use EFT.
- Nexus Monitoring: Whether you’re an in-state seller, remote seller, or marketplace-based business, HOST monitors your obligations across Arizona’s changing thresholds and local rules.
- Exemption Support: HOST helps you generate resale certificates (Form 5000A) and keeps your documentation audit-ready.
- Audit Defense & Recordkeeping: Every return, payment, and exemption is stored and tracked. If ADOR comes knocking, you’re covered.
With HOST, you’re not just keeping up—you’re staying ahead. From license setup to monthly filings and everything in between, HOST delivers seamless, penalty-proof sales tax and TPT compliance tailored for Arizona businesses.
Final Word: Don’t Let TPT Confusion Slow You Down
Navigating the sales tax permit in Arizona—especially the state’s unique TPT system—can be complex, but it’s not impossible. Whether you’re selling locally, remotely, or through events, getting compliant early means fewer headaches later. The paperwork, the jurisdictions, the filing rules—it all adds up fast.
That’s where HOST comes in. From TPT registration to remittance, zero-returns, and audit preparedness, HOST takes the entire compliance burden off your plate. No guesswork, no penalties—just expert support. Reach out today for a consultation and let HOST help you stay focused on growth, not government forms.
