Arizona-Based Sellers

Any retailer physically located in Arizona is considered an Arizona-based retailer or a local Arizona retailer. This is true regardless of whether the retailer has a physical store front or not. This means that the rules outlined under the retail classification in A.R.S. § 42-5061 and further discussed on the Department’s retail webpages apply equally to all Arizona retailers with or without a storefront.

This should not be confused with laws that states have implemented to subject out-of-state businesses with no physical presence or locations in their state to sales tax when making sales into their state. These laws are generally called remote seller/marketplace facilitator laws. They require businesses physically located outside of the tax collecting state to collect taxes for that state where their economic activity with customers in that state exceeds a certain numerical threshold. Arizona has also implemented these laws specifically in relation to retail sales and they apply to retail sellers located outside of Arizona and require those out of state sellers to pay the Arizona TPT where retail sales into Arizona exceed $100,000. Do note that the $100,000 threshold in sales only applies to retail sales. Please review the Remote Seller page to determine if your business is required to pay Arizona TPT to the Arizona Department of Revenue. Once an out-of-state retail business reaches the threshold, they are required to pay taxes and comply with all the retail rules while following differences for an out-of-state vendor such as where the taxes should be reported.

Out-of-state businesses could also be required to pay the Arizona TPT if that business has substantial nexus by physical presence with Arizona. Please see Arizona Taxpayer Ruling TPR 24-1 for a comprehensive explanation. If an out of state business has substantial nexus by physical presence in Arizona, that business is treated exactly the same as an Arizona located business. All Arizona’s sixteen classifications apply to a business if that business has substantial nexus by physical presence.