Most businesses in Arizona require a transaction privilege tax (TPT) license to operate. Governed by the Arizona Department of Revenue (ADOR), TPT is a tax on companies and other organizations for the privilege of doing business in Arizona.

ADOR collects all revenue generated by the TPT. Where a business is located in Arizona, however, can affect its overall tax rate.

While Arizona sets state-level tax rates, each county and city is responsible for setting taxes and other rates within their boundaries. For example, in April 2025, Mohave County had a 5.6 percent tax rate for retail and contracting. In comparison, Pinal County had a 6.7 percent tax rate for both of those activities.

Each local government is responsible for setting its local rates. This is why county and city TPT rates can vary.

Multiple Locations

For businesses with multiple locations, one question is whether to have one TPT license or one for each location. Whether a business has one TPT license or several doesn't affect rates.

Since 2016, ADOR has required that businesses use location-based reporting. The example the state gives is a contractor. A contractor works exclusively in Maricopa County but in several cities and towns. The contractor would have to list the state/county on one table and each city on a separate table.

Compare the contractor with a restaurant that has ten locations. The restaurant could report aggregate sales, which still requires them to divide sales by county and city. The restaurant, however, may find it easier for each location to have its own TPT license. Each license costs $12, and for businesses with permanent locations, it might be easier to have a TPT license for each location.

The contractor, on the other hand, only needs one license because he has one office. While he does work in multiple areas and has to report that, he doesn't have a permanent presence in any location but where he has his physical offices.

If you have questions about the TPT rates in your town or city, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.