Transaction Privilege Tax (TPT or Sales Tax)

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💰 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?