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Frequently Asked Questions

Q. What is the total tax rate?
A. The combined tax rate for the State of Arizona, Maricopa County, and the City of Scottsdale for most taxable activities is 7.95%. The combined rate consists of 5.6% for the State, .7% for the County, and 1.65% for the City of Scottsdale.
Q. Does the City of Scottsdale tax the rental of real property?
A. Yes, the City taxes both the rental of residential and commercial property. All commercial property rented in the City is subject to tax at the 1.65% tax rate. Also, property owners that have residential rental property in the City and have more than two (2) such rental units available in the State of Arizona are subject to City tax at the 1.65% tax rate. Or, if a residential property owner has one (1) or more commercial property units available for rent in the State, then all residential rental property located in the City is subject to the City tax at the 1.65% tax rate.
 
Q. Is all food taxable in Scottsdale? Why?
A. Yes, at the City tax rate of 1.65%. The model City Tax Code provides the cities with an option to not tax food. The City of Scottsdale has not selected this option; therefore all food sold in the City of Scottsdale is subject to the City privilege (sales) tax. The State of Arizona and Maricopa County does not tax food.
Q. How do I remit the tax due?
A: When you apply for a Privilege (sales) Tax License with the City of Scottsdale you will receive instructions regarding the submission of the City’s privilege (sales) tax. Likewise, when you apply for a Privilege Tax License with the State of Arizona you should make sure you receive instructions regarding the submission of privilege (sales) tax to the State and the County for which the State collects on behalf of the County.
Q. How do I obtain a Privilege (sales) Tax License from the City of Scottsdale and the State of Arizona?
A. You can print a Transaction Privilege (Sales) & Use Tax License Application. Once completed, you can either mail it or bring to the City office at: 7447 E. Indian School Rd. #110, Scottsdale, AZ 85251. You may also contact the City Tax & License Section at 480-312-2400. To obtain an application from the State of Arizona you can print an application from the State’s website at: www.azdor.gov/Forms/Transaction.asp or you may call the State at 602-546-4576.
Q. Do I need to charge and remit privilege (sales) tax?
A. Yes, it is the responsibility of the business/artist to remit privilege (sales) tax. Whether you collect it from your customers or not, the tax liability for all taxable business conducted in the City or Scottsdale must be remitted.
Q. How do I calculate my taxes due?
A. Tax are calculated by stating the gross receipts for the reporting period on the tax return, entering the itemized deductions, then multiplying the resulting net taxable amount by the appropriate tax rate (1.65%).
Q. Are repair, service, installation labor, and shipping taxable?
A. For retail transactions, these types of charges are not considered taxable if the charges are separately stated to the customer and the seller separately maintains records summarizing such charges.
Q. If an order is shipped out of state is it taxable?
A. For retail items, the following criteria must be met: 1) the order must be placed from outside of Arizona, 2) the item is delivered to the buyer outside of Arizona and 3) the item must be for use outside of Arizona. For motor vehicle sales, the following criteria must be met: 1) the order must be by a non-Arizona resident, 2) the item is delivered to the buyer outside of Arizona and 3) the item must be for use outside of Arizona. Evidence that the applicable criteria have been met needs to be properly documented in the seller’s books and records.
Q. Are Internet sales taxable? If so, at what rate?
A. Items sold by Scottsdale based businesses via the Internet to Arizona residents are taxable and reportable to the City at the 1.65% tax rate.
Q. There is a line for use tax on my return. What is use tax?
A. Use tax is a tax at the rate of 1.45% on items stored or used in the City, which have been purchased or rented without a local transaction privilege (sales) or equivalent tax being paid to the seller.
Q. Where do City privilege (sales) and use taxes go?
A. For privilege (sales) taxes, 1% goes to the General Fund .2% goes to transportation (per 1989 voter approval), .2% goes to the McDowell Sonoran Preserve (per 1995 voter approval),  .15% goes to the McDowell Sonoran Preserve (per 2004 voter approval) and .1% go to public safety (per 2004 voter approval). For use taxes, 1% goes to the General Fund, .2% goes to the McDowell Sonoran Preserve,  .15% goes to the McDowell Sonoran Preserve (per 2004 voter approval) and .1% go to public safety (per 2004 voter approval).

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