At the state level, the Arizona sales tax rate is effectively 5.60% as of April 2026. But that number rarely tells the whole story. Arizona taxes businesses through the Transaction Privilege Tax (TPT), which is technically a levy on the seller’s right to do business in the state rather than a direct tax on the customer. Cities and counties layer their own taxes on top of the TPT, which can raise combined rates.

Below, we’ll explore how Arizona’s TPT system works, how to calculate the correct combined rate for various locations, and what to be aware of regarding specific rates for cities and counties.

Highlights

• Unlike a traditional sales tax, Arizona’s TPT is a tax on the seller. Many businesses pass the cost through to the customer.

• Arizona’s base TPT rate is 5.60%. But once state and local taxes are combined, total rates can increase.

• Combined rates vary by location. Remote selling, marketplace facilitators, and tiered rates on high-value items can also affect the overall rate.

What is the Arizona sales tax rate?

In Arizona, what most people call a “sales tax” is technically the TPT: a tax on the privilege of doing business in Arizona, not a tax on the customer. Businesses usually pass the cost on to the customer, so it functions like a sales tax from the customer’s perspective. But for compliance purposes, the legal obligation sits with the seller, not the customer.

Arizona’s state rate is 5.60%. That covers only the state’s share and doesn’t include county excise taxes or city privilege taxes. Once those are added, the rate on a retail sale can look quite different, especially in dense metro areas where multiple tax layers overlap, such as Phoenix, Tucson, and Flagstaff.

Tax rates vary depending on what’s being taxed: for example, retail sales might be treated differently from restaurant purchases. Arizona doesn’t tax most grocery items at the state level, and prescription drugs are also exempt. But those exemptions apply only to the state rate. Some Arizona cities impose their own taxes on food for home consumption, so the effective rate on a grocery purchase depends on where the items are sold.

What is Arizona’s sales tax rate range in 2026?

Arizona’s combined rates span a wide range, depending on the product that’s being taxed. In Tucson, for example, hotels get taxed at 9.00% and transient non-hotel short-term rentals get taxed at 10.00%. But these rates are atypical.

Here are the components of the combined rate, as of April 2026:

What are the local sales tax rates in Arizona?

The average local tax rate in Arizona is 2.92%. Not every municipality levies a city tax, so unincorporated areas within a county typically pay only the state plus county rate. This is often the lowest combined rate in that county.

Arizona has 15 counties, each of which levies its own excise taxes on top of the 5.60% state rate. County rates range from 0% to 1.67% for various things such as retail, utilities, and lodging. City rates range from 0% to 10.00%. So the rate at the point of sale can vary significantly.

What are Arizona’s sales tax rates by city?

Arizona’s TPT is based on a comprehensive list of goods and services with varying rates. For example, in Phoenix, retail is taxed at different amounts depending on category (whether it’s food for home consumption, internet sales, marijuana, or a default retail sale), as well as other criteria. City-level rate changes in Arizona require a 60-day notice before they take effect. The Arizona Department of Revenue updates its rate tables monthly.

Phoenix also has a two-level retail structure, in which large retail sales of single items get a different city tax rate. Items below an adjusted 2026 threshold of $14,338 are taxed at 2.80%, while the portion of the sale above that amount is taxed at 2.00%.

What are Arizona’s sales tax rates by county?

Arizona’s sales tax rate by county also depends on the type of taxable activity. Below are the retail sales tax rates by county.

Stripe Tax integrates directly with these rate tables and updates automatically when jurisdictions change. That matters in Arizona particularly because the layered structure means a single ZIP code can cross multiple tax boundaries. You must look up the street-level address rather than just the ZIP code to get the right number.

How does Arizona’s sales tax rate affect your business?

Arizona’s TPT system is more administratively involved than a standard sales tax because of its structure. These factors affect what you owe:

• Economic nexus: Remote sellers and marketplace facilitators without a physical presence in Arizona must comply with economic nexus rules if they exceed $100,000 in gross sales to Arizona customers.

• Destination vs. origin sourcing: For most in-state retailers, the rate depends on where the sale occurs (i.e., your business location). Remote sellers without a physical presence in Arizona that have established economic nexus must collect TPT based on the customer’s location.

• Marketplace facilitators: If you sell through a marketplace, the facilitator is responsible for collecting and remitting TPT on your behalf. That means your obligation shifts, but you still need to understand where liability sits.

• Tiered rates: Some Arizona cities have a two-tier structure for single high-value items. For instance, Phoenix applies a lower rate to the portion of a sale above $14,338, as of 2026. This affects only a narrow range of transactions, but it matters for businesses that sell big-ticket items.

• Filing is centralized: Unlike in some states where you file separately by jurisdiction, Arizona’s Department of Revenue collects taxes on behalf of cities.

How do you calculate Arizona’s sales tax?

To calculate Arizona’s sales tax, multiply the taxable sale amount by the combined rate for that location. For example, if you’re selling a $200 item and the combined rate there is 7.80%, multiply $200 by 0.078. The tax due is $15.60, for a total of $215.60.

The challenge is knowing which rate applies. A business in Mesa might face a different combined rate from a business two miles away in Chandler even though both are in Maricopa County. Stripe’s sales tax calculator can simplify calculations and maintain consistency across jurisdictions.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, value-added tax (VAT), and goods and services tax (GST) on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.