If you’re selling digital services and products to customers in Arizona, then you might be liable for Arizona sales tax, locally known as Transaction Privilege Tax (TPT). We’ve drawn on our 10 years of experience in tax compliance to create this comprehensive guide, which covers how to file TPT returns online and stay compliant with the state's regulations.
We’ve scoured the Arizona Department of Revenue (ADOR) website to provide you with all the necessary information about TPT for businesses in one convenient place.
How to file TPT returns in Arizona
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Arizona in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay
The timing for filing your return depends on your average monthly sales volume, and the ADOR will assign you a filing frequency (monthly, quarterly, or yearly) after you register for an Arizona TPT license. State governments generally ask larger businesses to file more frequently.
Arizona TPT returns and payments must be remitted by a certain date. The ADOR requires paper TPT filing to be completed by the 20th of the month following the tax period. Electronic returns must be submitted by the last weekday of the month following the tax period. Due dates falling on a weekend or holiday are adjusted to the following business day. All TPT payments must be submitted electronically and are due the weekday before electronic returns are due.
AZ TPT filing deadlines
Monthly TPT filing deadlines
Reports are due on the 20th day of the month following the reporting month for paper filings, and by the last weekday of the month for electronic filings. For example, the July paper TPT report is due August 20, while the electronic report is due August 31.
| Month | Paper Filing Deadline | Electronic Filing Deadline | |-----------|-----------------------|----------------------------| | January | February 20 | Last weekday of February | | February | March 20 | Last weekday of March | | March | April 20 | Last weekday of April | | April | May 20 | Last weekday of May | | May | June 20 | Last weekday of June | | June | July 20 | Last weekday of July | | July | August 20 | Last weekday of August | | August | September 20 | Last weekday of September | | September | October 20 | Last weekday of October | | October | November 20 | Last weekday of November | | November | December 20 | Last weekday of December | | December | January 20 | Last weekday of January |
Quarterly TPT filing deadlines
Reports are due on the 20th day of the month following the reporting period for paper filings, and by the last weekday of the month for electronic filings.
| Quarter | Paper Filing Deadline | Electronic Filing Deadline | |------------------|-----------------------|------------------------------| | First Quarter | April 20 | Last weekday of April | | Second Quarter | July 20 | Last weekday of July | | Third Quarter | October 20 | Last weekday of October | | Fourth Quarter | January 20 | Last weekday of January |
Yearly TPT filing deadlines
Reports for the previous year are due on January 20 (paper) / January 31 (electronic).
Important note: zero returns
Once you have an Arizona transaction privilege license, you’re required to file returns at the completion of each assigned collection period regardless of whether any TPT is due. When no TPT is due, you must file a "zero return.” This follows the exact same process as a normal return, just with no tax liability to report. Failure to submit a zero return can result in penalties and interest charges.
How to prepare your Arizona TPT return
Before you start working on your TPT return, you'll need to collect all the sales information for your tax period. The ADOR online tax return system will guide you, but generally, you'll need the following details:
Sales transactions
Every business needs to know how much it sold—both in gross sales and in taxable sales—and to whom the business sold it. You are also required to collect and pay TPT for any personal property sold to residents of Arizona, with certain exceptions (e.g., if the buyer has a resale certificate or the item isn't considered taxable).
In addition to your gross Arizona sales (total sales revenue from buyers in Arizona, regardless of taxability), filing a TPT return requires the following information:
- Taxable sales by type: Different types of products are subject to different tax rules and amounts.
- Non-taxable sales by type: Examples include sales to resellers, non-taxable labor, and certain non-taxable foods.
- Deductions: This might include items such as delivery charges.
- Total collected TPT: The total amount of TPT you collected from customers during the filing period.
The ADOR provides filing examples that you can review.
Marketplace facilitator sales
If you sell your products through a marketplace facilitator (which you don’t operate yourself), you will report sales made through the marketplace and then take a deduction for the amount of such sales (using deduction code 804). You will also need to get an exemption certificate from the marketplace facilitator. The marketplace facilitator will then report and remit that portion of TPT on your behalf.
How to complete and file an Arizona TPT return
The final step is to file and remit tax. The ADOR strongly encourages taxpayers to utilize the AZTax.gov website for online filing. You can log in here to file your return using your business account.
How to pay
Tax payments must be in US dollars and can be made directly at the time of filing. Once you’ve completed the return, you’ll remit the total calculated TPT.
Payment options include:
- Credit card
- ACH Debit
- E-Check
Once complete, you’ll see a payment confirmation page with a confirmation number.
Timely filing discount
Arizona offers incentives for timely filing. The ADOR provides:
- An accounting credit of 1 percent to a maximum of $10,000 per calendar year for returns filed on paper.
- An accounting credit of 1.2 percent to a maximum of $12,000 per calendar year for returns filed electronically.
These timely filing discounts only apply to state transaction privilege tax, not local TPT.
Late filing penalties and interest
Hopefully, you won't need to worry about this section because you're filing and remitting Arizona TPT on time and without incident. However, in the real world, mistakes happen.
If you miss a TPT filing deadline, follow the saying, “better late than never,” and file your return as soon as possible. Failure to file returns and remit tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest. For more detailed information on specific penalty amounts and interest rates, refer to the ADOR's official penalties and interest section.
In the event an Arizona TPT filing deadline was missed due to circumstances beyond your control (e.g., weather, accident), the ADOR may grant you an extension. However, you may be asked to provide evidence supporting your claim. Furthermore, if you’re in the process of acquiring a business, it’s strongly recommended that you contact the ADOR and inquire about the current status of the potential acquisition. Once you've purchased the business, you’ll be held responsible for all outstanding Arizona TPT liability.
Getting third-party help with TPT filing
While you can file directly with the ADOR, preparing Arizona TPT returns can be time-consuming — especially for larger sellers with many transactions across different districts. Outsourcing to experts like accountants, bookkeepers, or tax automation companies like Avalara is a normal business practice that can save business owners time and help them steer clear of costly mistakes due to inexperience and a lack of deep knowledge about Arizona TPT code.
Quaderno offers a service to simplify your TPT compliance. Besides generating detailed tax reports with all necessary data, Quaderno can handle the filing process for you. By connecting to your sales data, Quaderno manages the submission of your TPT returns to the ADOR, ensuring timely and accurate filing. This saves time and provides peace of mind.
For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in Arizona.
Sales tax filing in other states
- California Sales Tax Filing Guide
- Colorado Sales Tax Filing Guide
- Florida Sales Tax Filing Guide
- Georgia Sales Tax Filing Guide
- Illinois Sales Tax Filing Guide
- Massachusetts Sales Tax Filing Guide
- New Jersey Sales Tax Filing Guide
- New York Sales Tax Filing Guide
- North Carolina Sales Tax Filing Guide
- Pennsylvania Sales Tax Filing Guide
- Texas Sales Tax Filing Guide
- Virginia Sales Tax Filing Guide
- Washington Sales Tax Filing Guide
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.
