TRANSACTION PRIVILEGE (SALES) TAX  
GENERAL INFORMATION

City of Tempe Privilege (Sales) Tax  

The City of Tempe, and most other cities in Arizona, impose a Transaction Privilege (Sales) Tax on specific business activities just like the State of Arizona. The City tax is in addition to the tax imposed by the State. The City of Tempe tax rate is one and eight-tenths percent (1.8%) and is imposed upon the business.  A taxable business will need to get licensed with both the City of Tempe as well as obtain a license with the State of Arizona.  A list of the taxable activities within Tempe can be found at Taxable Activities

Note:  The City of Tempe and the State of Arizona maintain separate and distinct privilege (sales) tax codes.  As a result, there are certain situations and circumstances where the taxability of certain business activities is different between the two codes.

State law requires Individuals /Sole Proprietors to submit a copy of one of twelve documents that indicates authorized presence in the United States.  More information about the eligible documents as well as the State Law, the Legal Arizona Worker's Act, can be found on the Maricopa County Attorney's web site.  The City of Tempe will accept and process your application but will not issue a license until documentation has been received.

Tax Reporting Requirements  

Individuals applying for a Privilege (Sales) Tax license are required to report and pay Tempe's 1.8% privilege tax on their taxable revenue on either a monthly, quarterly, or annual frequency. Reporting frequency is based upon annual taxable revenue.  You may request an annual filing frequency only after you have established a 6 month reporting history.

The annual license fee is $50, and the application fee is $20.  Privilege Tax Licenses must be renewed annually.

Account Statement
If you receive an Account Statement and have questions, call our general number (480) 350-2955.