| Transaction Privilege Tax Changes and News |
| April 2026 |
| What’s New | Reporting Guide | Rates | Quick Reference |
ARIZONA CASH TRANSACTION ROUNDING LAW: GUIDANCE FOR BUSINESSESArizona businesses that do not use or have pennies available at the point of sale are now required to round cash transactions to the nearest 5 cents, following a new law signed by Governor Katie Hobbs. This legislative action, which took immediate effect on March 12, 2026, was taken primarily in response to the decreasing use and availability of the one-cent coin. This rounding requirement applies exclusively to cash transactions where the seller is no longer using pennies. No rounding applies to transactions using a payment method other than cash; only exact amounts should be used on non-cash transactions. This does not change how transaction privilege tax (TPT) is calculated, reported, or remitted. TPT returns must reflect gross receipts based on the full pre-rounding transaction amount—including all taxable items, fees, and charges—rather than the rounded cash amount paid by the customer. The amount rounded up or down is disregarded for TPT reporting purposes. Enforcement of this law is administered by the Weights and Measures Services Division of the Arizona Department of Agriculture under A.R.S. Title 3, Chapter 19. The Division may issue warnings, orders, and civil penalties. For questions about the rounding requirements, contact the Department of Agriculture. For more information about TPT reporting on rounded transactions, go to the Arizona Penny-rounding Law web page. WASTE TIRE FEE INCREASEBusinesses that sell new tires should be aware of upcoming changes to the fee imposed on the sale of new motor vehicle tires.This includes:retailers of new motor vehicle tires,retailers of motor vehicles with a gross weight of under 10,000 pounds,wholesale sellers that sell new motor vehicle tires to the state or a political subdivision of the state, andwholesalers that sell new motor vehicle tires to a private entity that does not resell the new tires (including wholesalers that sell to used car dealerships). The current fees remain in effect through June 30, 2026: LATE TPT LICENSES RENEWAL BILLING LETTERS: ACT NOW TO AVOID PENALTIES!If your business has yet to renew its Transaction Privilege Tax (TPT) License for 2026, be aware that the Arizona Department of Revenue (ADOR) is issuing late renewal billing letters. This notice will indicate any overdue renewal fees. You will receive one notice per license, regardless of your business location. Time is critical! Businesses must act immediately to prevent further penalties and delays in receiving the updated TPT License. While you can no longer renew on AZTaxes.gov, you can still submit the payment online. Operating without a valid license may result in a Class 3 misdemeanor. No Longer in Business? If you have closed, please cancel your TPT license through AZTaxes.gov or submit a Business Account Update form with the cancellation effective date. This action is essential to keep your account in good standing and avoid additional penalties and interest. Keep Your Information Current: Ensure your mailing addresses and account details are up-to-date so ADOR letters, notices, and billings reach the correct location. We strongly encourage all business owners to register and pay any outstanding renewal fees promptly on AZTaxes.gov. For more information, visit azdor.gov/transaction-privilege-tax/tpt-license/renewing-tpt-license. ACH DEBIT PAYMENT BANKING TRANSACTIONIn May, ADOR will be transitioning ACH Debit payment banking services to JP Morgan Chase. It will be important to note that users will need to communicate the new Company ID to their banks to ensure that all ACH debit transactions process as expected. The updated Company ID is 9031897000. Please work with your banks to ensure that when the transition occurs, you do not have any issues with your payments being processed. HOW TO LINK EXISTING TPT LICENSE NUMBER TO THE NEW USER ACCOUNTThe Department encourages businesses to license their business through AZTaxes for quicker registration and processing of their application, along with streamlined filing and paying transaction privilege and withholding taxes.Apply for a New License When applying through AZTaxes, the first step is creating an account (user account) and applying for a license. The steps to create an account are as follows:Go to AZTaxes.gov.Click on “Enroll to File and Pay Online” under Businesses.Complete the required fields annotated with a red asterisk.Read and check the Terms of Use policy acceptance box.Click “Register.” You will receive two emails from [email protected] within 24 hours. The first email will contain your username, and the second will provide a temporary password. Please check your spam folder if you do not find these emails in your inbox.For visual instructions on creating a user account, see: https://youtu.be/5H_X8HOBPf0.Connecting an Existing License to User Account If you are required to file and pay electronically but originally applied for a license by paper, you must create a user account through AZTaxes and link (or connect) the user account with the existing TPT License. Do not reapply for a license through AZTaxes if you already have a license.Instead, you will link the license and user account. Similarly, when you open a bank account in person, they do not create an online login for you, but you create an online account and connect your bank account with your login.For visual instructions on linking your account, see this video: https://youtu.be/gd3BGDmYNkM. COMMON TPT FILING ERRORSADOR wants businesses to be successful when filing their business’ transaction privilege tax returns. The main reason TPT paper returns do not process correctly is that they are filed by paper! Filing online at AZTaxes.gov reduces the chance for errors because most of the information included on your return is pre-populated for you based on your TPT license information.If you must file by paper and have an annual waiver in place, make sure to file appropriately. (Businesses with an annual transaction privilege tax (TPT) and/or use tax liability of $500 or more during the prior calendar year are required to file and pay electronically.)Watch the Common Errors video to learn some of the top reasons returns do not process correctly to your TPT account and how they can be avoided.For more helpful tips and error explanations, see the Notice and Correspondence Resource Center. FILING FACTSCheck your business’ balance or outstanding liabilities by logging into AZTaxes.gov. Select the account, then click “Pay,” and “Pay Outstanding Liabilities.”Verify and update your mailing address instantly and securely at AZTaxes.gov.Remember to file your TPT return for the prior month’s activity.Keep your account history in good standing and avoid penalties. If no longer in business, cancel your existing TPT license on AZTaxes.gov or submit a Business Account Update Form.File a $0 TPT return for temporarily closed businesses. Go to the Transaction Privilege Tax page for more information.Find deduction codes on the Deduction Codes web page and make sure you are claiming the correct deduction codes on your TPT return.The tax rate look up tool on AZTaxes.gov is a useful tool for TPT filers in helping them find the TPT rates for any location within Arizona.If your primary user email no longer exists, you will need to register as a new user for AZTaxes. ADOR recommends this be an officer/owner of the business. Review the fact sheet for instructions on registering a new user. Once registered, complete a Business Account Update to change the primary user to the new user account.Remember to click “Submit” when submitting a TPT return on AZTaxes. Clicking “Save” does not submit your return. DUE DATE REMINDERSTPT Filing Frequency and Due Dates*- Monthly, QuarterlyTPT filers are reminded of the following March TPT filing deadlines:April 20 – TPT return due date.April 29 – Paper returns must be received at ADOR by this date.April 30 – Electronic return filed in AZTaxes must be submitted before 11:59 p.m. on this date. Electronic payment made in AZTaxes must be submitted before 11:59 p.m. on this date.*The electronic due date for TPT return is dependent on the return and payment being timely and filed electronically. TAX CHANGESCity of Tucson – Effective date of March 1, 2026On December 16, 2025, the Mayor and Council of the City of Tucson passed three ordinances:Ordinance 12214, amending Chapter 19, Article III, Division 4, Sections 19-1070 and 19-1080 of the city code to increase the tax rate on Public Utility (Additional Communications) from four and a half percent (4.5%) to five percent (5%); and increasing the tax rate on Public Utility (Additional Utility) from four and a half percent (4.5%) to five percent (5%).Ordinance 12215, amending Tucson code Chapter 19, Article I, Division 1, Section 19-1 and 19-66 to create the Occupational License Tax Rate for Transient – Non Hotel facilities that are not classified as hotels for property taxation under § 42-12001. The rate is ten percent (10%) for these vacation or short-term rentals.Ordinance 12218, amending Chapter 19, Article I, Division 5, Section 19-66 of the city code to increase the Occupational License Tax Rate on Hotels from six percent (6%) to nine percent (9%); and decreasing the Bed Surtax (Additional Tax) (Per night) from four dollars ($4.00 ea.) to the rate of zero dollars ($0.00 ea.). Business CodeOld Tax RateNew Tax RateHotels0446.009.00Bed Surtax (Additional Tax) (Per Night)035$4.00 each$0.00 eachPublic Utility (Additional Communications)1054.505.00Public Utility (Additional Utility)1044.505.00Transient Non-Hotel Rental544N/A10.00 Pima County – Effective date of April 1, 2026On March 10, 2026, the Pima County Transportation Excise Tax (Proposition 418-419) was voted on as part of a Special Election ballot. The measure, approved by Pima County voters, extends the existing one-half cent (0.5%) excise tax for 20 years through March 31, 2046. Because there is no change in the tax rate relative to the prior measure (expiring March 31, 2026), there is no impact on the combined state and county tax rates. Town of Florence – Effective date of July 1, 2026On March 17, 2026 the Mayor and Council of the Town of Florence passed ordinance 780-26 providing an increased tax rate on multiple Privilege Tax business classifications and Use Tax from two percent (2%) to three and one-half percent (3.5%) and an increased rate on the Hotel/Motel (Additional Tax) from two percent (2%) to five percent (5%). Providing for Severability.The (3.50%) affects the following business classifications: Advertising (018); Amusement (012); Job Printing (010); Manufactured Buildings (027); Timbering and other Extraction (020); Publication (009); Hotels (044); Commercial, Rental, Leasing, and Licensing for Use (213); Rental, Leasing, and Licensing for Use of TPP (214); Restaurant and Bars (011); Retail Sales (017); MRRA Amount (315); Communications (005); Transporting (006); Utilities (004); Use Tax Purchases (029); Use Tax from Inventory (030). Medical and Adult Use Marijuana: Adult Use Marijuana Retail Sales (420); Medical Marijuana Retail Sales (203); Retail Sales (Accessories and Ancillary Products) (017); Use Tax Purchases (029); Use Tax From Inventory (030); Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421).Remote Seller and Marketplace Facilitators: Retail Sales (605); Marketplace Facilitators in AZ Third Party Sales (605); Marketplace Facilitators in Arizona Retail Sales (017).The (5.00%) affects the following business classifications: Hotel/Motel (Additional Tax) (144). EDUCATION, TUTORIALS AND TRAININGAll ADOR workshops are free of charge. Below are upcoming options available to taxpayers. To register or access online workshops, tutorials and resources, visit azdor.gov/taxpayer-education. WORKSHOPS ADOR Business Tax Basics – (Via WebEx)Wednesday, April 22, 20261:00 p.m. – 4:00 p.m. Wednesday, May 6, 20269:00 a.m. – noon Common TPT Errors and How to Avoid Them – (Via WebEx)Thursday, April 23, 20261:00 p.m. – 2:00 p.m. Thursday, May 7, 202610:00 a.m. – 11:00 a.m. Property Owner – (Via WebEx)Tuesday, April 28, 2026 1:00 p.m. – 4:00 p.m. ADOR AZ Taxes – (Via WebEx)Thursday, April 30, 2026 9:00 a.m. – noon ON-DEMAND TAX EDUCATION TUTORIALS: Please visit https://azdor.gov/taxpayer-education/tpt-tutorials. |
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Arizona Transaction Privilege Tax Changes and News
Transaction Privilege Tax Changes and News April 2026 What’s New | Reporting Guide | Rates | Quick Reference ARIZONA CASH TRANSACTION ROUNDING LAW: GUIDANCE FOR BUSINESSESArizona businesses that do not use or have pennies available at…
