Retail Sales Subject to TPT
Out-of-State Sellers
Businesses without a physical presence in Arizona, but who make sales to Arizona consumers
When it comes to retail sales, there are a number of items subject to TPT. For instance, the federal excise tax on tire sales is subject to TPT. A manufacturing tax is imposed upon tire manufacturers, who in turn pass that tax on to customers.
Even auctioneers must obtain a TPT license because sales by auctioneers, whether or not the property is owned by them, are taxable as retail sales.
Other taxable items include pictures taken and printed by photographers. All of a photographer’s activities are taxable under the retail classification. Photography includes taking, processing, printing pictures, prints or images on or from film, video or other similar media. Gross receipts derived from the sales of photography are taxable under the retail classification.
Also, the sale of tools, supplies and other articles used or consumed by a person during the operation of their business, and not for resale, are also taxable as retail sales. Tangible Personal Property: The personal property which may be seen, weighed, measured, felt or touched or is in any other manner perceptible to the senses (A.R.S. § 42-5061(17)).
Next, both computer hardware and software are subject to TPT under the retail classification. Computer hardware is considered goods sold to consumers or end users. Software is taxable when many people or companies use it. However, there is an exemption if the software is specifically designed for the use of only one person or business.
Diesel fuel for off-road use is also subject to TPT. For on-road use, however, it is taxable by the Arizona Department of Transportation.
Any sales made to the state of Arizona, counties or other political subdivisions are taxable at the full rate. On the other hand, retail sales to U.S. government are taxable at half the regular tax rate. Sales of products directly to the U.S. government by a manufacturer, modifier, assembler or repairer of such products are not taxable.
Sellers who take a trade-in for partial payment on a retail sale pay TPT on the difference between the selling price and the trade-in amount. The subsequent sale of the item taken in trade is subject to tax.
2015 Arizona Tax Law Regarding Changes To Retail Businesses (A.R.S. § 42-5061.A.14)