Arizona imposes a 5.6% statewide sales tax on the retail sale of tangible personal property along with some services. With local taxes added on, residents of certain Arizona cities can pay over 11% in total sales tax depending on jurisdiction. Arizona sales tax calculator and laws allows taxpayers to optimize major purchases while ensuring businesses comply with registration, collection, filing, and remittance requirements.
Arizona Sales Tax Calculator
The Arizona sales tax calculator is an online tool that automatically calculates sales tax for purchases made in Arizona. To use the calculator, you first select the city or county where the purchase is being made. Arizona has a statewide sales tax rate of 5.6%, but many cities and towns add additional local sales taxes on top of that. After entering the location, you simply input the total purchase price. The calculator will then apply the correct sales tax rate based on the location and provide you with the amount of sales tax owed.
Arizona Sales Tax Calculator
Arizona Sales Tax Calculator
Arizona sales tax calculator makes it easy to estimate the final cost of a purchase in Arizona, ensuring you are prepared to pay the full amount including tax at checkout. The calculator simplifies the process of figuring out sales tax and eliminates the need to manually look up complex tax charts. By automatically determining the tax rate, it provides a convenient and hassle-free way to calculate sales tax for any Arizona purchase.
Overview of Arizona Sales Tax
Arizona first enacted a 2% statewide sales tax that applied to retail sales of tangible goods in 1933. The rate increased incrementally over the decades before reaching 5.6% in 2021, which stands as the current state sales tax rate. This makes Arizona sales tax rate moderately high compared to other states.
In addition to the statewide rate, cities, towns, and counties in Arizona can impose their own local transaction privilege taxes ranging from 0.1% to 5%. So combined state and local sales tax can potentially exceed 11% in some higher-taxed communities like Glendale, Peoria, and the Town of Chino Valley.
Beyond general sales tax, Arizona levies excise taxes on gasoline, alcohol, cigarettes, and other items. The state also imposes taxes on vehicle purchases based on the manufacturer’s list price.
What Transactions are Subject to Sales Tax in Arizona?
Arizona broadly applies its 5.6% state sales tax plus any applicable local sales taxes to the retail sale of most tangible goods. Some examples include:
- Clothing and footwear
- Furniture and appliances
- Electronics like computers, phones, and TVs
- Home goods and furnishings
- Sports equipment and hobby items
- Alcohol and tobacco
- Most groceries and food items
- Motor vehicles
Arizona also taxes some services including restaurant meals, hotel stays, and utilities. But most professional services remain exempt.
Exemptions to Arizona Sales Tax
While extensive, Arizona’s sales tax law does provide some specific exemptions:
- Prescription drugs and prosthetics – Sales of prescription drugs, crutches, wheelchairs, and other medical equipment are exempt.
- Livestock feed
- Textbooks required for education courses
- Food and drinks purchased with SNAP benefits
- Sale of cash equivalents like checks, bonds, or bullion
- Rare coins and precious metals
Understanding Arizona’s exemptions allows taxpayers to reduce costs by avoiding unnecessary sales tax.
Who Collects and Remits Arizona Sales Tax?
In Arizona, the obligation to properly charge, collect, report and remit sales tax falls on the retailers making taxable transactions. Consumers then pay this tax at the point of sale.
Both in-state and remote sellers shipping taxable goods into Arizona must register for transaction privilege tax licenses once they exceed certain economic nexus thresholds:
- $200,000 in Arizona gross receipts
- 200 or more separate Arizona sales transactions
Marketplaces like Amazon must collect and remit Arizona tax on behalf of third-party sellers who exceed Arizona’s transaction thresholds through the marketplace.
How Arizona Uses Sales Tax Revenue
In fiscal year 2022, Arizona collected over $6.6 billion in state and local sales taxes. Sales tax accounts for over half of the general fund revenue in Arizona’s budget. These funds support public services like:
- Education – K-12 schools, universities, technical/vocational institutes.
- Health and social services – Medicaid, children’s health, mental health.
- Public safety – Law enforcement, courts, corrections, child/elder services.
- Transportation – Highway infrastructure, motor vehicle division, county/city transit.
- Tourism promotion.
- General government – Operations, payrolls, buildings.
Without sales tax, Arizona would need to impose much higher income or property taxes to raise funding for these critical services.
Recent and Possible Future Changes to Arizona Sales Taxes
Like most states, Arizona frequently adjusts its sales tax policies through legislative changes:
- Online sales tax – Arizona enacted economic nexus rules following the 2018 Wayfair decision, requiring more out-of-state sellers to collect tax.
- Tax holidays – Arizona holds several sales tax holidays each year temporarily suspending tax on back to school items.
- Digital goods – Arizona now applies sales tax consistently to physical and digital goods.
- Prop 208 surcharge – A new 3.5% income tax surcharge on high earners passed in 2020 to fund education.
- Tax base expansion – Proposals to tax more services emerge periodically as shopping trends change.
Taxpayers and businesses operating in Arizona should monitor sales tax law changes that could impact their liability.
Sales Tax Compliance Tips for Arizona Businesses
Businesses making taxable sales into Arizona must register for licenses and follow all sales tax compliance regulations:
- Obtain a TPT license – Register for an account with the Arizona Department of Revenue after exceeding economic nexus thresholds. You can register online.
- Integrate sales tax software – Solutions like AvaTax simplify rate calculations, filing, and payments.
- Charge all rates accurately – Ensure your POS system applies the combined state and local rates based on delivery jurisdiction within Arizona. ZIP code rates can be found on the state website.
- Collect tax on online and mail order sales – Charge Arizona tax on orders shipped to Arizona addresses.
- File returns on time – Arizona sales tax returns are generally due the 20th of the following month. Late payments incur penalties.
- Keep detailed transaction records – Keep shipping addresses and exemption certificates to validate your tax charges and exemptions.
Conclusion
With combined state and local rates reaching over 11% in some cities, Arizona residents face above average sales tax burdens on most retail purchases. Careful planning around exemptions provides some relief. Meanwhile, in-state and remote sellers need to closely track Arizona’s evolving economic nexus rules and manage taxability to smoothly collect and remit the many sales taxes across the state. As e-commerce expands and tax policies change, Arizona sales tax compliance will likely continue posing challenges in 2023 for both taxpayers and businesses.
