The Arizona Department of Revenue announced on March 18 several updates and reminders regarding the transaction privilege tax (TPT) for businesses, including license renewals, filing requirements, and upcoming changes to local tax rates.
These updates are important for business owners to ensure compliance with state regulations and avoid penalties. The department emphasized the need for timely renewal of TPT licenses and proper filing methods as part of routine account maintenance.
Businesses licensed with the Arizona Department of Revenue were required to renew their TPT license by January 1, 2026. Those who have not yet renewed will soon receive an automatic renewal billing letter indicating any overdue fees. Only one renewal notice per license will be sent, regardless of business location. Once renewed and paid in full, new TPT license certificates will be mailed to the address on file.
The department reminded taxpayers that electronic filing is mandatory for most businesses, especially those with more than one location or annual TPT liability exceeding $500. Filing online through AZTaxes.gov is encouraged for faster processing and fewer errors. Paper Form TPT-EZ is only allowed for businesses with a single location and less than $500 in annual liability. Failure to comply with electronic filing requirements may result in penalties.
Changes to local tax rates were also highlighted. In Cave Creek, effective February 1, 2026, the transaction privilege tax rate on hotels will increase from three percent to five percent, while the additional hotel/motel tax will rise from four percent to five percent following ordinance 2025-16 passed by the town council on November 18, 2025. In Tucson, new ordinances affecting local taxes will take effect March 1, 2026.
To assist taxpayers, the department is offering free online workshops covering topics such as business tax basics, common TPT errors and how to avoid them, marijuana taxation, and withholding tax procedures throughout March and April.
Looking ahead, business owners are encouraged to review their accounts regularly and participate in educational opportunities provided by the department to stay informed about ongoing changes.
