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Arizona transaction privilege tax exemptions

Transaction Privilege Tax
Nonprofit Tax

Arizona’s Transaction Privilege Tax – How it Applies to Nonprofits

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:

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