Free Arizona Invoice Template

Sales tax on invoices in Arizona

Rate: 5.6% state TPT, plus city and county rates (commonly 8% to 9% combined)

Arizona charges a transaction privilege tax (TPT) rather than a true sales tax. It is legally a tax on the business for the privilege of doing business, though in practice it is passed to the customer like a sales tax. The state rate is 5.6%, and city and county rates push the combined rate to roughly 8% to 9%. Contracting work is taxable under the prime contracting classification, with a standard deduction for a portion of the gross. Because TPT rules for contractors are unusual, confirm your treatment with the Arizona Department of Revenue.

What gets taxed: TPT applies to goods and to contracting. Many pure services are not taxed.

Rates and rules change. Confirm the current rate and what is taxable with your state tax authority before you file.

Contractor licensing in Arizona

Arizona requires most contractors to be licensed through the Registrar of Contractors (ROC) for work over $1,000 (or any work requiring a permit). Show your ROC license number on the invoice.

Sample Arizona invoice

Example for a job in Phoenix, AZ, showing how the tax line works when some items are taxable and some are not.

Tax is applied only to the taxable lines, which is the part most invoices get wrong. Build yours with the right tax handling in the free generator.