What is the difference between TPT and sales tax?

TPT (Transaction Privilege Tax) is Arizona's version of sales tax. It's technically a tax on the seller for the privilege of doing business in Arizona, rather than a tax on the buyer.

Is Arizona TPT origin-based or destination-based for remote sellers?

For remote sellers without physical presence, Arizona uses destination-based sourcing. The tax rate is based on the customer's delivery address.

Arizona TPT Nexus Threshold 2026

Arizona's Transaction Privilege Tax (TPT) economic nexus threshold is $100,000 in gross proceeds. This guide explains how the threshold works and what counts toward it.

Key Takeaways

• Threshold: $100,000 in gross proceeds
• Transaction threshold: None (removed in 2021)
• Measurement period: Previous or current calendar year
• Tax type: Transaction Privilege Tax (TPT)

Understanding Arizona's $100,000 Threshold

Arizona requires remote sellers to collect TPT when they exceed $100,000 in gross proceeds or gross income from sales delivered into Arizona. This threshold is straightforward—Arizona does not use a transaction count threshold.

The threshold is measured against the previous or current calendar year. If you exceeded $100,000 in either period, you have economic nexus.

What Counts Toward the Threshold

Gross proceeds from retail sales delivered to Arizona addresses
Sales through your own website or direct channels
Both taxable and exempt sales (for threshold calculation)

What Doesn't Count

Sales through marketplace facilitators (Amazon, eBay, etc.)
Wholesale sales with valid TPT exemption certificates

Remote Seller Tax Rates

As a remote seller without physical presence, you use destination-based sourcing. Calculate the combined state, county, and city rate for each customer's delivery address. Arizona's state rate is 5.6%, but combined rates vary significantly by city.

Frequently Asked Questions

Arizona's economic nexus threshold is $100,000 in gross proceeds from sales into Arizona during the previous or current calendar year. There is no transaction threshold.

Related Guides

Arizona TPT Nexus Guide

Complete overview of Arizona TPT nexus.

How to Register for Arizona TPT

Registration guide.

Arizona TPT Filing Deadlines

All due dates for 2026.

Last Updated: January 15, 2026

Disclaimer: This information is provided for educational and informational purposes only and does not constitute tax, legal, or financial advice. Tax laws and regulations change frequently. While we strive to keep this information accurate and up-to-date, we make no representations or warranties of any kind about the completeness, accuracy, reliability, or suitability of this information. Please consult with a qualified tax professional or attorney for advice specific to your business situation. Always verify current requirements with the official state tax authority.