Arizona has a state sales tax of 5.6 percent, plus local taxes that vary by county and city

Arizona charges a state sales tax of 5.6 percent on most goods and some services. On top of that, your county and city add their own local sales taxes. Your total sales tax rate depends on where you live and where you buy — it can range from about 7.6 percent in some areas to over 11 percent in others. The state collects the tax at the point of sale, and local governments receive their portion of the revenue.

When you see a price tag in Arizona, that amount does not include sales tax. The tax is added at checkout, so your final bill will be higher than the displayed price. This applies whether you shop in a store, order online for local pickup, or buy from a restaurant.

Key Takeaways

  • Arizona's state sales tax is 5.6 percent, but your actual rate is higher because counties and cities add their own local taxes on top.
  • Total sales tax rates in Arizona range from roughly 7.6 percent to over 11 percent depending on your location.
  • Sales tax applies to most physical goods, prepared food, and certain services, but not to groceries, prescription medications, or medical equipment.
  • Online purchases are taxed the same way as in-store purchases if the seller has a physical presence in Arizona or meets federal thresholds.

How local taxes stack on top of the state rate

Each Arizona county sets its own additional sales tax, which ranges from 0.5 percent to 2.5 percent depending on the county. Cities within those counties can add even more. For example, Maricopa County adds 0.7 percent, but the city of Phoenix adds another 2.3 percent on top of that, bringing the total to 8.6 percent when you combine the state rate, county rate, and city rate.

To find your exact local rate, you need to know both your county and your city. The Arizona Department of Revenue publishes a complete list of rates by location on its website. If you live near a county or city border, the rate can change depending on which side of the line you shop on.

Some counties use their local sales tax revenue for specific purposes — schools, transportation, or public safety — so the rate and what it funds varies widely across the state.

What items are taxed and what are not

Most physical goods are subject to sales tax in Arizona. Clothing, electronics, furniture, and household items all get taxed. Prepared food — anything served hot or ready to eat from a restaurant, deli, or bakery — is taxed. Alcohol and cigarettes are taxed at the regular rate, though they also have their own excise taxes on top.

Several categories are exempt from sales tax. Groceries for home consumption are not taxed, which means unprepared food you buy at a supermarket to cook at home is tax-free. Prescription medications and medical equipment prescribed by a doctor are also exempt. Certain services like haircuts and repairs are generally not taxed, though this can vary by city.

The line between taxable and non-taxable can be unclear in some cases. For instance, hot prepared food is taxed, but cold prepared food (like a sandwich from a deli case) may not be, depending on how it is sold. If you are unsure whether something is taxed, ask the cashier or check the Arizona Department of Revenue website.

Sales tax on online and out-of-state purchases

If you order something online from a company that has a warehouse, office, or other physical location in Arizona, you pay Arizona sales tax on that order. The same rule applies if the seller meets federal thresholds for remote sales — as of 2021, most large online retailers collect and pay Arizona sales tax even if they have no physical presence in the state.

If you buy from an out-of-state seller that does not collect Arizona sales tax, you are technically responsible for paying what is called use tax — a tax on items you bring into Arizona or have shipped to you. In practice, most individual buyers do not pay use tax, but it is legally owed. Some states ask you to report it on your income tax return.

The rules around online sales tax are still changing as states and the federal government work out how to handle remote purchases. If you are buying from a small out-of-state seller and are unsure whether tax will be collected, contact them directly before checkout.

Who collects and where the money goes

Retailers collect sales tax at the register and send it to the Arizona Department of Revenue. The state keeps the 5.6 percent state portion and distributes the local portions to the appropriate counties and cities. Businesses file sales tax returns monthly or quarterly, depending on their size and sales volume.

Local governments use their share of sales tax revenue for schools, roads, public safety, libraries, and other services. Because sales tax is a major source of funding for Arizona cities and counties, the rate can change if a community votes to increase it for a specific project or ongoing need.

How sales tax differs from income tax

Arizona has both a state income tax and a state sales tax. They are separate taxes that work differently. Income tax is based on what you earn, while sales tax is based on what you spend. You pay income tax once a year (or through paycheck withholding), but you pay sales tax every time you make a purchase.

Some states have no sales tax but higher income tax. Arizona has both, so residents pay tax on earnings and on purchases. The combined burden depends on how much you earn and how much you spend.

Frequently Asked Questions

What is the sales tax rate in my city?

Your rate depends on your county and city. The Arizona Department of Revenue publishes a complete rate table on its website organized by location. You can search by city name or ZIP code to find your exact rate, which typically ranges from 7.6 percent to over 11 percent.

Do I have to pay sales tax on groceries?

No. Unprepared food you buy at a grocery store to cook at home is not taxed in Arizona. However, prepared food — hot items, deli items sold as ready-to-eat, and restaurant meals — is taxed at the regular rate.

Is sales tax included in the price shown on the shelf?

No. Prices shown in Arizona stores do not include sales tax. The tax is added at checkout, so your final bill will be higher than the displayed price.

Do I pay sales tax on items I buy online?

If the online seller has a physical location in Arizona or meets federal thresholds for remote sales, yes — they collect and pay Arizona sales tax. If they do not, the tax may not be collected, though you are technically responsible for use tax on those purchases.

Are prescription medications taxed?

No. Prescription medications and medical equipment prescribed by a doctor are exempt from Arizona sales tax. Over-the-counter medications and health products are taxed like regular goods.