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Arizona tax rate changes, January 2018


 New local transaction privilege tax rates coming to Arizona in 2018.

There will be a handful of changes to local transaction privilege tax (TPT) rates in Arizona as of Jan. 1, 2018. Rather than a sales tax, the Grand Canyon State imposes a tax on vendors for the privilege of doing business in the state. Like a sales tax, however, TPT is usually passed on to consumers. The Arizona Department of Revenue collects TPT for cities and counties.

City changes

Globe is eliminating its two-tiered tax rate and adding a 2.3% use tax for inventory and purchases.

Prescott is increasing the tax rate from 2% to 2.75% for the following business classifications:

  • Advertising
  • Amusements
  • Communications
  • Contracting (prime, owner builder, and speculative builder)
  • Feed at wholesale
  • Hotels
  • Job printing
  • Manufactured buildings
  • MRRA (maintenance, repair, replacement, or alteration)
  • Publication
  • Rental, leasing, and licensing for use of tangible personal property
  • Residential and commercial rental, leasing, and licensing for use
  • Restaurant and bars
  • Retail sales
  • Retail sales of food for home consumption
  • Timbering and other extraction
  • Transporting
  • Use tax from inventory and purchases
  • Utilities

In addition, it’s now (slightly) more affordable to do business in Chandler — the city is reducing fees for obtaining or renewing business licenses from $50 to $2.

More details about the above changes are available from Arizona’s Model City Tax Code.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.