Arizona transaction privilege tax exemptions

Non-profit organizations that are tax-exempt from federal and state income tax are not necessarily exempt from state and local taxes. In lieu of a sales tax, Arizona imposes a Transaction Privilege Tax (TPT) on seventeen separate business classifications. Certain tangible personal property and retail sales transactions are exempt from Arizona’s TPT.

The general rule is that sales made to churches, schools, and other non-profit organizations are taxed. However, under the Arizona Revised Statutes (A.R.S.) the following types of transactions are not subject to the State of Arizona’s Transaction Privilege Tax: