Transaction Privilege & Use Tax

The Arizona transaction privilege tax is commonly referred to as a sales tax. Yet, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Although the transaction privilege tax is usually passed on to the consumer, it is actually a tax on the vendor.

Arizona transaction privilege taxes are imposed on persons engaged in certain business classifications, including retail sales. What this means is that various business activities are subject to state, county and/or city transaction privilege tax.

Types of business activities subject to the transaction privilege tax include, but are not limited to: retail sales, restaurants/bars, hotel/motel, commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured building, severance (mining, timbering), transportation, printing, publishing, utilities, communications, air/railroad, private cars/pipelines and use tax. For questions or issues regarding taxability and licensing, contact

Otto S. Shill, III, an Arizona Tax Planning and Litigation Attorney with over 25 years of experience.