Any business that sells goods or taxable services within the state of Arizona to customers located in Arizona is required to collect sales tax (called Transaction Privilege Tax ) from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Arizona must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.
Do you need to get a Sales Tax certificate in Arizona State?
You may need a Sales Tax Certificate if any of the following apply your business:
- You have a physical office or place you conduct
- You sell or ship products to a buyer in Arizona
- You have a distribution location such as a storage area or warehouse space with goods
- You have employees physically present in Arizona for more than 2 days per calander year (including independent contractors, sales persons, representatives, or agents)
- Your business delivers merchandise in the state of Arizona in company owned vehicles
- Your business owns real or personal property
- Your business has taxable services in the state of Arizona
What constitutes taxable services in Arizona State?
The majority of service businesses are not taxable in Arizona. The exceptions would be if your business fabricates or manufactures a good or product.
Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Arizona?
As a wholesale company conducting business in the state of Arizona, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.
If you an online seller, Do you need to collect sales tax on shipping and handling of merchandise?
If you sell separately for shipping and handling charges, then you do not have to charge sales tax, but if you include it in the purchase price with the item then you will.
Is there sales tax on drop shipments in the state of Arizona?
A drop shipment is where a seller ( most times out of state ) sells a product which is then delivered to a consumer by a third party shipper. In most instances, drop shipments in Arizona are required to have sales tax added
Are there any exemptions to taxable items sold?
Medical Devices and prescription medicine, chemical and machinery used in the Research and development process, and certain groceries are tax exempt.
Register for an Arizona sales/use tax number
Arizona state, county, city, & municipal tax rate table