Commercial Lease

A commercial lease is real property leased or rented for commercial purposes - land or structure. This includes but is not limited to: office buildings, stores, factories, farm land, parking/storage facilities, banquet halls or meeting rooms. Does not including agricultural property or land or structures used for residential purposes. These leases are subject to county and city transaction privilege taxes.

What income is considered taxable?

  • Rent
  • Property tax
  • Insurance reimbursement
  • Payments for common area maintenance
  • Clerical services if included in lease agreement
  • Utility connect/disconnect charges
  • Phone, food, and beverage machine commissions
  • Payment for leasehold improvements
  • Improvements to lease property


For more information, please refer to the AAC R15-5-1604 or to TPR 95-17 available at


Reporting County Tax

Classified as Commercial Lease, business code 013, at the state/county level. There are five counties in the state of Arizona that require you to collect and remit county taxes for commercial leases. Those counties are Coconino, Gila, Maricopa, Pima and Pinal.

Reporting City/Town Tax

Commercial Rental, Leasing and Licensing, business code 213, and potentially Commercial Lease Additional Tax, business code 313, at the city/town level.

Some cities have an additional commercial lease tax (business code 313). Some cities do not tax commercial lease.


To determine if you should report county or city taxes, visit Enter the address of the commercial lease and search, then select “Rent/Lease Space” from the drop-down menu.

This provides a breakdown of the taxes you should be reporting along with the business, county and city codes. Use this information to fill out transaction privilege tax (TPT) returns.

Reporting TPT

Arizona Department of Revenue strongly encourages taxpayers to use our online services via for easier filing and faster processing.

To file and remit transaction privilege tax online, register your business on If you have an existing TPT license, you will need to link your existing business account and add any line items for county and city.

Businesses with more than one location or an annual transaction privilege tax and use tax liability of $500 or more during the prior calendar year are required to file and pay electronically. If you have only one location or less than $500 in annual tax liability, you may file a TPT-EZ return and ensure to complete the lines for the county and city you are located in.  

Many deductions that can be claimed for the cities, can also be applied to the county tax on the Schedule A of the return. For a full list of deduction codes, please see the Deduction Code Table.

For further assistance on TPT and, view our video tutorials and YouTube.


For further reference, please see:

Arizona Revised Statutes
Arizona Administrative Code
Download Commercial Lease Information Card (PDF)

In case of inconsistency or omission in this publication, the language of the Arizona Revised Statutes and the Arizona Administrative Code will prevail.

For further assistance, please email [email protected].