Arizona – Nexus Program TPT


Although commonly referred to as a sales tax, the Arizona transaction privilege tax (TPT) is actually a tax on a vendor for the privilege of doing business in the state. It is measured by the value of tangible personal property (TPP) sold by the vendor in Arizona. The vendor is liable for the tax, even though the vendor may pass on the tax to the consumer.

Use tax, which is a tax on any TPP bought from an out-of-state vendor that is stored, used or consumed in Arizona, and no tax was paid to the state of sale. The consumer is liable for use tax if TPP was purchased with no tax paid to the state of sale. If there is no nexus with the state, a vendor may collect use tax for the convenience of the customer.

Determining Transaction Privilege/Use Tax Nexus with Arizona

The following is a general guideline of activities that, if engaged in, may exceed the minimum threshold of nexus and subject the business to TPT tax, or use tax requirements of Arizona:

  • Employees present in the state conducting business on behalf of the company
  • Ownership or lease of real or personal property in Arizona
  • Maintenance of an office or place of business in Arizona
  • Delivery of merchandise into Arizona on vehicles owned or leased by the taxpayer
  • Independent contractors or other non-employee representatives present in Arizona for the purpose of establishing and maintaining a market for the taxpayer

Examples of establishing and maintaining a market include:

  • Soliciting sales
  • Making repairs
  • Collecting delinquent accounts
  • Delivering property sold to customers
  • Installing products
  • Conducting training for employees or representatives of the company or customers
  • Resolving customer complaints
  • Providing consulting services
  • Soliciting, negotiation, or entering into franchising agreements

For additional information, please see our physical nexus FAQs.

Additional guidance for making a self-determination of nexus for TPT purposes.

If you have read the above information and still require additional guidance in order to make a nexus determination, you may complete the Nexus Questionnaire. Completed questionnaires will be reviewed by a Nexus Auditor, and a determination will be provided by the department.


For more information please visit : azdor.gov

Arizona Department of revenue