Decoding Arizona's Sales Tax: Insights for 2024

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Decoding Arizona's Sales Tax
Insights for 2024
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Table Of
Content
Welcome to Kintsugis 2024 update on Arizona
sales tax.
Learn how sales tax varies across the state,
counties, and cities.
Understand key changes and tax rates in Phoenix
and beyond.
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Understanding Arizonas Sales Tax Structure

• Arizona's sales tax is a combination of state,
  county, city, and local district taxes.
• As of 2024, the base state sales tax rate is
  5.6. However, total sales tax can vary widely
  based on local rates.
• For example, Yuma County has the highest county
  tax rate at 1.0, while La Paz County has the
  lowest at 0.5.

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Sales Tax Rates by Major Cities
Lets take a closer look at some major cities in
Arizona and their sales tax rates for 2024

• Phoenix Increased from 8.6 in 2023 to 8.8 in
  2024.
• Tucson From 8.7 to 8.9.
• Mesa Stable at 8.3.
• Chandler Increased from 7.8 to 8.0.
• Glendale Remains unchanged at 9.2.
• Scottsdale Increased from 8.05 to 8.15.
• Gilbert Increased from 7.8 to 8.0.

These variations can significantly affect both
consumers and businesses.
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Calculating Arizona Sales Tax
E-commerce and SaaS Sales Tax
E-commerce businesses must be aware of the sales
tax obligations in Arizona
To calculate the total sales tax in Arizona

• Remote sellers are required to collect sales tax
  if their annual gross sales exceed 100,000.
• For Software as a Service (SaaS), these are
  generally treated as tangible personal property,
  subject to the state base rate and local rates.
• Most services are exempt unless specified by
  local regulations.

• Determine the State Base Rate 5.6.
• Add Local Rates Vary by city/county, typically
  between 0 and 5.
• Example Calculation If you're in Phoenix, with a
  combined rate of 8.8, the total sales tax on a
  100 purchase would be 8.80.

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Understanding Use Tax in Arizona

• Use tax applies to purchases made from
  out-of-state sellers for use within Arizona.
• This tax ensures that both in-state and
  out-of-state purchases are taxed similarly.
• For example, if an Arizona resident buys a laptop
  online from a retailer that doesnt collect
  Arizona sales tax, they must report and pay the
  applicable use tax.

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Recent Changes in Arizona Sales Tax (2024)

• Increased Base Rate From 5.6 to 6.0.
• Expansion of Taxable Goods Digital products like
  e-books and streaming services are now taxable.
• Threshold Adjustment for Online Sellers Reduced
  from 100,000 to 50,000.
• Introduction of Sales Tax Holiday First-ever
  holiday for back-to-school items in August 2024.

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Key Takeaways
Excise and Discretionary Taxes in Arizona

• Understanding Arizonas sales tax is crucial for
  both consumers and businesses.
• Stay informed about the base rates, local
  adjustments, and new regulations to ensure
  compliance and proper tax planning.
• Utilize resources like the Arizona Department of
  Revenues online services for accurate tax
  calculations and updates.

Arizona also imposes excise taxes on specific
products

• Fuel Tax 0.18 per gallon for gasoline 0.26
  for diesel.
• Tobacco and Alcohol Taxes 2.00 per pack for
  cigarettes.

Local discretionary taxes can be levied for
projects or tourism-related services.
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