Phoenix sales tax is 8.6 percent on most purchases

When you buy something in Phoenix, the total price you pay includes a sales tax of 8.6 percent. This means a $100 purchase costs $108.60 at checkout. The 8.6 percent rate combines the Arizona state sales tax (5.6 percent), the Maricopa County tax (0.7 percent), and the City of Phoenix tax (2.3 percent). Each of these three layers funds different government services.

The rate applies to most goods and some services. Groceries, prescription medications, and medical equipment are exempt — you do not pay sales tax on those. Restaurant meals, prepared foods, and non-prescription items are taxed. If you buy something online from a seller with a physical location in Arizona, you typically owe the same 8.6 percent, though some out-of-state sellers may not charge it.

Key Takeaways

  • Phoenix sales tax is 8.6 percent, made up of state (5.6%), county (0.7%), and city (2.3%) portions.
  • Groceries and prescription medications are not taxed, but restaurant meals and prepared foods are.
  • The tax rate can vary slightly in nearby cities and unincorporated areas of Maricopa County.
  • Online purchases from Arizona-based sellers are subject to the same tax as in-store purchases.
  • Businesses collect and send the tax to the state, which distributes it to the county and city.

What the state, county, and city portions fund

The 5.6 percent Arizona state portion funds statewide services including education, transportation, and public safety programs. The state collects this money and distributes some of it back to cities and counties. The 0.7 percent Maricopa County tax supports county services like the sheriff's office, courts, and public health programs. The 2.3 percent City of Phoenix tax pays for city services including police, fire, streets, parks, and libraries.

When you pay sales tax, the store collects it and sends it to the state Department of Revenue. The state then distributes the county and city portions to those governments. This happens monthly for most businesses. The breakdown means that roughly 65 percent of your sales tax goes to the state, 8 percent to the county, and 27 percent to the city.

Items that are and are not taxed in Phoenix

Groceries sold in a grocery store — bread, milk, vegetables, meat, eggs — are not taxed. This applies to raw food you cook at home. Prescription medications filled by a pharmacist are also exempt. Medical equipment like wheelchairs, crutches, and diabetic supplies are not taxed. Durable medical equipment prescribed by a doctor has its own exemption rules.

Restaurant meals, coffee shop drinks, and prepared foods from a deli counter are taxed at the full 8.6 percent. Candy, soda, and other non-essential food items are taxed. Clothing and shoes are taxed. Gasoline is taxed, though Arizona adds a separate fuel tax on top of sales tax. Services like haircuts, car repairs, and plumbing are generally taxed, though some professional services have exemptions.

The line between taxed and untaxed can be unclear. A rotisserie chicken from a grocery store deli is taxed because it is prepared food. A raw chicken from the meat counter is not taxed. If you are unsure whether something is taxed, the store cashier or the Arizona Department of Revenue website can tell you.

How the rate compares to other Arizona cities

Phoenix's 8.6 percent rate is higher than some nearby cities but lower than others. Tempe has a combined rate of 8.35 percent. Mesa is 8.55 percent. Scottsdale is 8.725 percent. Chandler is 8.6 percent, the same as Phoenix. Glendale is 8.6 percent. These differences exist because each city sets its own local tax rate on top of the state and county rates.

If you live in an unincorporated area of Maricopa County — outside any city — you pay 6.3 percent (state plus county, with no city tax). This is why the rate matters if you are deciding where to make a large purchase. The difference between 6.3 percent and 8.6 percent on a $1,000 item is $23. For most everyday shopping, the difference is small enough that convenience usually matters more than the tax rate.

When Phoenix sales tax changed and why

Phoenix's city sales tax rate has changed several times over the past two decades. In 2017, the city increased its portion from 2.0 percent to 2.3 percent to fund public safety, transportation, and affordable housing. This was a voter-approved measure. Before that increase, Phoenix's combined rate was 8.3 percent. The state and county rates have also shifted, though less frequently.

Tax rate changes happen when a city or the state passes a new law or when voters approve a measure. Phoenix voters must approve any increase to the city portion. The state legislature controls the state rate. Maricopa County voters approved the current county rate. These changes are announced in advance, and the new rate takes effect on a specific date — usually the first of a month.

Sales tax on online and out-of-state purchases

If you order from an Arizona-based online retailer, you owe Phoenix sales tax just as you would in a store. Amazon, for example, collects 8.6 percent sales tax on orders shipped to Phoenix addresses because Amazon has warehouses in Arizona. The tax appears on your receipt or invoice.

If you order from an out-of-state retailer with no physical presence in Arizona, that retailer may not charge you sales tax at checkout. However, Arizona law says you owe the tax anyway — you are supposed to report it on your state income tax return as "use tax." In practice, most individual shoppers do not report this, and the state does not pursue individuals for small amounts. Businesses are expected to track and report use tax on their purchases.

The rule changed in 2018 when the U.S. Supreme Court decided that states can require online retailers to collect sales tax even without a physical location in that state. Most large retailers now collect it. Smaller sellers may not, depending on their setup and the state's rules.

How to calculate the total price before you buy

To find the final price of an item, multiply the listed price by 1.086. A $50 item costs $50 × 1.086 = $54.30. A $200 item costs $200 × 1.086 = $217.20. This works for any price. If you want to work backward — you have $100 and want to know the pre-tax price — divide by 1.086. $100 ÷ 1.086 = $92.08 pre-tax price, with $7.92 in tax.

Most stores round the final total to the nearest cent, so the exact amount you pay may be a penny or two different from your calculation, depending on how the register rounds. This is normal and legal. If you are buying multiple items, the tax is calculated on the total of all taxable items, not on each item separately, which can sometimes result in a slightly different total than if you calculated tax on each item individually.

Frequently Asked Questions

Do I pay sales tax on groceries in Phoenix?

No. Raw groceries like produce, meat, dairy, and bread are not taxed. Prepared foods from a deli, bakery, or restaurant are taxed at 8.6 percent. The difference is whether the food is ready to eat or requires cooking at home.

Is gasoline taxed in Phoenix?

Yes, gasoline is subject to the 8.6 percent sales tax. Arizona also adds a separate fuel tax of about 19 cents per gallon. The sales tax is calculated on the price before the fuel tax is added, so the total tax on gas is higher than 8.6 percent.

What if I buy something in Phoenix but live outside the city?

You pay the sales tax rate where the purchase is made. If you buy something in a Phoenix store, you pay 8.6 percent. If you buy it in Tempe, you pay Tempe's rate. If you order online and it ships to your address outside Phoenix, the tax depends on where the seller is located and where the item is shipped.

Can I get a sales tax refund if I move out of Arizona?

No. Sales tax is not refundable once you have paid it. If you are moving and have large purchases to make, you may want to time them based on your location, but Arizona does not issue refunds for tax already paid.

Why is Phoenix sales tax higher than some other cities?

Each city sets its own local tax rate. Phoenix's 2.3 percent city rate is higher than some nearby cities because voters approved it to fund specific services like police, fire, and transportation. Cities with lower rates either have lower local needs or chose not to raise the rate.