Transaction Privilege Tax (TPT or Sales Tax)

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Effective January 1, 2025, the City of Tempe will no longer impose Transaction Privilege Tax (TPT) on income received from residential rentals with stays of 30 days or more, commonly referred to as long-term rentals. Short-term rentals remain taxable as Hotels.

 

💰 Transaction Privilege Tax (TPT)

What Is TPT?

The Transaction Privilege Tax (TPT)—often called a sales tax—is actually a tax on businesses for the privilege of doing business in Arizona.
If your business sells products or provides taxable services, you must have a TPT license from the Arizona Department of Revenue (ADOR).

👉 Apply, file, and pay atAZTaxes.gov

Many cities, including Tempe, also require a city-level general business license or regulatory license for businesses operating within their limits.

🗓️ Filing & Payment Due Dates

  • Monthly returns: Due by the 20th of the month following the reporting month

  • Quarterly returns: Due by the 20th of the month following the end of the quarter
    ⚠️ File and pay online at AZTaxes.gov.

💤 If My Business Had No Sales

You must still file a $0 TPT return even if you had no sales or tax due for the period.
Failure to file results in a $25 penalty from ADOR.

📊 Understanding Gross Revenue

Gross revenue (or gross receipts) means everything your business earns before expenses — including:

  • Cash, credit, or other payment received

  • Value from bartering or trades

  • Interest, service, or finance charges

  • All amounts billed to customers (even if unpaid)

  • Taxes (including the TPT itself)

Defined under A.R.S. § 42-5001(4)

🧾 Example:
If you sell $10,000 in goods, $6,000 in expenses(labor and supplies) and collect $800 in TPT, your gross revenue is $10,800, not $4,000 (after expenses).
Then, you can deduct code 551 for the $800 tax collected.

📉 Common Deductions & Exemptions

You must include all income in gross revenue first, then list deductions separately on your return.
Common deductions include:

  • Sales for resale

  • Out-of-state sales

  • Bad debts written off

  • Refunds or returns

👉 Claim deductions directly on AZTaxes.gov

🏙️ Tempe TPT Codes & Tax Rates

Business Activity Code           Tax Rate
Advertising 018 1.80%
Amusements 012 1.80%
Contracting - Prime 015 1.80%
Contracting - Speculative Builders 016 1.80%
Contracting - Owner Builder 037 1.80%
Job Printing 010 1.80%
Manufactured Buildings 027 1.80%
Timbering & Extraction 020 1.80%
Severance - Metal Mining 019 0.10%
Publications 009 1.80%
Hotels 044 1.80%
Hotel/Motel (Additional) 144 5.00%
Commercial Rental, Leasing & Licensing for Use  213 1.80%
Rental/Leasing of Tangible Property 214 1.80%
Restaurants & Bars 011 1.80%
Retail Sales 017 1.80%
Retail Food for Home Consumption               062 1.80%
MRRA Amount 315 1.80%
Communications 005 1.80%
Transporting 006 1.80%
Utilities 004 1.80%
Use Tax – Purchases 029 1.80%
Use Tax – From Inventory 030 1.80%

City Code: TE
County: MAR (Maricopa)

📞 Need Help?

 Tempe Tax & License
📍 20 E. 6th Street, Third Floor, Tempe, AZ 85281
🕒 Hours: Monday–Friday, 8 a.m.–5 p.m., walk-ins until 4:30p.m. (except City holidays)
📧 [license@tempe.gov]
📞 480-350-2955

🧠 Helpful Links

How Do I Use AZTaxes.gov?
How Do I File For A TPT Refund?
How Do I Update My TPT Account With ADOR?