A:
The Arizona transaction privilege tax (TPT) is commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona. Although TPT is usually passed on to the consumer, it is actually a tax on the vendor.
Types of business activities subject to TPT include, but are not limited to: retail sales, restaurants/bars, hotel/motel (transient lodging), commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured buildings, transportation, printing, publishing, utilities, telecommunications, and use tax.
The Arizona Department of Revenue (AZDOR) administers the tax for the Cities/Towns and Counties. Tax rates vary depending on the type of business activity, the city and the county.
If you are selling a product or engaging in a service subject to transaction privilege tax, you will need to obtain the State transaction privilege tax (TPT) license from AZDOR (commonly referred to as a sales tax, resale, wholesale, vendor or tax license) and a City of Surprise issued business license.