Sales Tax 101: What Every Arizona Business Owner — Including Service Providers — Needs to Know.

If you sell products or services in Arizona, there’s a good chance you owe Transaction Privilege Tax (TPT) — Arizona’s version of sales tax. And yes, it’s confusing on purpose.

At Tangerine Business Services, we help business owners — including salons, contractors, retail shops, and service providers — register, file, and stay compliant with Arizona’s complex tax structure.

Here’s what you need to know so you don’t overpay, underpay, or worse — get penalized.

📌 It’s Not Just “Sales Tax” — It’s TPT

Arizona doesn’t technically have sales tax. Instead, it charges Transaction Privilege Tax (TPT) — a tax on your business activity, not just the products sold.

✅ You, the business owner, are responsible for paying it.

✅ Most businesses pass that cost to customers (like traditional sales tax).

✅ Even some services are taxable in Arizona.

🧑‍🔧 Who Needs a TPT License?

(It’s More Than You Think)

If you are:

• Selling physical products

• Providing taxable services like:

  
  

  • Haircuts, lashes, or massage therapy

  • Auto repair or detailing

  • Pest control or pool cleaning

  • Commercial janitorial services

  • Alarm system monitoring

  • Landscaping or lawn care

• 
  

• Renting out property (including Airbnbs)

• Working in construction or as a contractor

You likely need a TPT license. And if you perform services across city lines, you may need to report separately to each jurisdiction.

🧖‍♀️ What About Beauty & Wellness Businesses?

Salons, estheticians, lash artists, massage therapists, and nail techs are often surprised to learn their services may be taxable — especially if they:

• Sell retail products (hair care, skin products, etc.)

• Offer services in cities that tax personal care (e.g., Phoenix taxes massage services, some others do not)

If you’re unsure if your service-based business is taxable, Tangerine will walk you through it.

🏙️ The Complicated City Tax Layer

Arizona TPT isn’t just state-level. Cities can tack on their own tax rates — and tax different things. For example:

• One city might tax massage therapy

• Another might exempt it

• Auto services are taxed differently based on city rules

If you operate in Phoenix, Tempe, Scottsdale, or Mesa, chances are your services are taxed differently in each location.

📅 When Do You File?

The frequency depends on how much tax you collect:

• Monthly if you owe $2,000+/year

• Quarterly if you owe $500–$2,000/year

• Annually if you owe less than $500/year

Failing to file — even if you made no sales — can still trigger penalties.

🧡 Tangerine Makes It Easy

Here’s how we help service-based businesses stay compliant:

✅ Register your TPT license with the AZ Department of Revenue

✅ Determine which services and cities apply to you

✅ File monthly, quarterly, or annual reports on your behalf

✅ Help you avoid penalties or audits

✅ Keep you in good standing even if your income varies month to month

We support:

• Salons, barbers, estheticians, lash techs

• Massage therapists and wellness providers

• Auto detailers, mechanics, and mobile service pros

• House cleaners and pool techs

• Contractors and handyman services

• Anyone working across city lines

💥 What If You Ignore It?

Not registering or filing sales tax correctly can lead to:

• Interest and late penalties

• Surprise audits

• Your business license being suspended

• Personal liability for unpaid tax

And yes, the state will estimate your taxes if you don’t file — usually higher than what you actually owe.

🛠️ Let’s Simplify Sales Tax Together

You didn’t start your business to become a tax expert. That’s why Tangerine Business Services is here — to help service pros and small businesses handle TPT the right way.

🎯 Ready to Get Compliant Without the Headache?

👉 Visit TangerineBiz.com to schedule a free consult.

We’ll review your business, register your license if needed, and take over the reporting — for a flat, affordable rate.