How AZ TPT works
Arizona doesn’t technically have a sales tax. It has a Transaction Privilege Tax - a tax on the privilege of doing business, levied on the seller, not the buyer.
In practice, almost every retailer passes it through to the customer at the register, which makes it look and feel exactly like sales tax. The math is identical: subtotal, times rate, equals tax.
tax = taxable_subtotal × combined_rate
total = subtotal + tax
Frequently asked
What rate applies to my sale?
Generally the rate at the point of delivery for tangible goods. For in-store sales, that’s the store’s location. For shipping into AZ, it’s the customer’s address. The state, county, and city portions all stack.
What’s the difference between exclusive and inclusive?
Exclusive: the price tag is the pre-tax amount, and the register adds tax on top. Inclusive: the price tag is what the customer pays out the door, and the tax is backed out of that price. Most U.S. retail uses exclusive; many trade-show and event vendors use inclusive.
Why is the effective rate sometimes lower than the entered rate?
If some line items are marked non-taxable, the tax is only collected on the taxable portion. The effective rate divides total tax by the full pre-tax subtotal, which is lower than the rate applied to just the taxable items.