City of Tempe, AZ
Home MenuTaxable Business Activities In Tempe
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.
💼 Tempe Transaction Privilege Tax (TPT) Rates & Classifications
Current City TPT Rate: 1.80% (unless noted otherwise)
Each business activity below includes its definition, tax rate, and Tempe City Code reference.
📰 Advertising
Rate: 1.80%
Definition: Promoting products or services through billboards, radio, TV, direct mail, or any public medium.
Code: Tempe City Code §16-405
🎟️ Amusements
Rate: 1.80%
Definition: Operating amusement or entertainment venues—such as movie theaters, concerts, sports events, bowling alleys, gyms, or skating rinks.
Membership fees are taxable.
Exempt: Instruction in dance, martial arts, and gymnastics.
Code: Tempe City Code §16-410
🏗️ Contracting – Prime
Rate: 1.80%
Definition: Construction, alteration, or improvement of real property (land, roads, buildings).
Resource: ADOR Contracting Guidelines
Code: Tempe City Code §16-415
🏘️ Contracting – Speculative Builders
Rate: 1.80%
Definition: Sale of improved real property by speculative builders.
Resource: ADOR Contracting Guidelines
Code: Tempe City Code §16-416
🧱 Contracting – Owner Builder
Rate: 1.80%
Definition: Construction or repair of real property by owner-builders, developers, or contractors not licensed by the Registrar of Contractors but performing taxable work.
Resource: ADOR Contracting Guidelines
Code: Tempe City Code §16-417
🖨️ Job Printing
Rate: 1.80%
Definition: Copying or reproducing items through printing, engraving, or photo reproduction.
Code: Tempe City Code §16-425
🏠 Manufactured Buildings
Rate: 1.80%
Definition: Selling, moving, or setting up factory-built homes or buildings.
Code: Tempe City Code §16-427
🌲 Timbering & Extraction
Rate: 1.80%
Definition: Cutting or preparing timber, or extracting and refining oil or gas for sale.
Code: Tempe City Code §16-430
⛏️ Severance – Metal Mining
Rate: 0.10%
Definition: Mining or smelting mineral products for sale (excluding sand, gravel, or rock).
Code: Tempe City Code §16-432
🗞️ Publishing
Rate: 1.80%
Definition: Producing newspapers, magazines, or periodicals. Includes subscriptions and advertising income.
Code: Tempe City Code §16-435
🏨 Hotels & Short-Term Rentals
Rates:
City TPT: 1.80% (for stays of any length of time)
Transient Lodging Tax: 5.00% (for stays under 30 days)*see below
Definition: Income from hotels, motels, apartments, or short-term rentals providing lodging.
Resource: ADOR Short-Term Rental Guidelines
Code: Tempe City Code §16-444
🏩 Hotel/Motel – Additional Tax
Rate: 5.00% (in addition to standard 1.8%)
Definition: Applies to hotels or short-term rentals charging for lodging to transients (stays under 30 days).
Resource: ADOR Short-Term Rental Guidelines
Code: Tempe City Code §16-447
🏢 Commercial Rental of Real Property
Rate: 1.80%
Definition: Leasing or licensing commercial real estate such as office buildings, parking, or storage facilities.
Code: Tempe City Code §16-445
🧰 Rental of Tangible Personal Property
Rate: 1.80%
Definition: Renting or leasing items like software, digital goods, equipment, vehicles, furniture, or coin-operated machines.
Code: Tempe City Code §16-450
🍽️ Restaurants & Bars
Rate: 1.80%
Definition: Selling food or beverages for on- or off-premise consumption (includes caterers, food trucks, and mobile vendors).
Resource: ADOR Publication 605 – Food & Beverage Guidelines
Code: Tempe City Code §16-455
🛍️ Retail Sales
Rate: 1.80%
Definition: Selling any tangible personal property (e.g., furniture, clothing, or electronics).
Resource: ADOR Retail Guidelines
Code: Tempe City Code §16-460
💻 Remote Seller (Out-of-State Retail Sales Into Arizona)
Business Code: 605
Rate: 1.80%
Definition:
Sales of tangible personal property (such as furniture, clothing, or electronics) by businesses located outside Arizona but selling to customers within the state. A remote seller has economic nexus if in the previous or current year, the gross sales generated from direct sales into Arizona is more than $100,000.
Resource: ADOR Out-of-State Retail into Arizona Guidelines
Reference: A.R.S. §42-5044
🥫 Retail Sales – Food for Home Consumption
Rate: 1.80%
Definition: Sales of food intended for home consumption (excluding alcohol and tobacco).
Code: Tempe City Code §16-462
📡 Telecommunication Services
Rate: 1.80%
Definition: Providing telephone, cable, internet, or other communication services.
Excludes: Alarm monitoring as defined by A.R.S. §32-101.
Code: Tempe City Code §16-470
🚚 Transporting for Hire
Rate: 1.80%
Definition: Transporting property or people for hire by railroad, pipeline, or aircraft.
Code: Tempe City Code §16-475
⚡ Utilities
Rate: 1.80%
Definition: Producing or providing electricity, gas, water, or power to consumers.
Code: Tempe City Code §16-480
💸 Use Tax (Purchases & From Inventory)
Rate: 1.80%
Definition: Applies when tangible property is purchased for business use without paying equivalent Tempe TPT.
Code: Tempe City Code §16-610
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 4:30 p.m. (except City holidays)
📧 [license@tempe.gov]
📞 480-350-2955