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The transition to centralized licensing, reporting and payment of Transaction Privilege (Sales) taxes to the Arizona Department of Revenue will begin with the January 2017 tax return which is due in February.

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Tax Rates

Transaction Privilege (Sales) Tax Rate

The City of Scottsdale imposes a 1.65% Privilege "sales" tax.

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1.65%

The City of Scottsdale imposes a 1.65% Privilege "sales" tax. Privilege tax revenues are used to finance the cost of various City services including but not limited to police, fire, parks, libraries, and streets. One eighth (1/8) of the privilege tax revenue is used specifically for transportation purposes, and 1/5 is for purchasing land for the McDowell Sonoran Preserve in the McDowell Mountains and the surrounding Sonoran Desert, and 1/16 is for public safety.

Use Tax Rate

The City of Scottsdale imposes a 1.45% use tax on items stored or used in the city which have been purchased or rented without a privilege or sales tax equal to the Scottsdale use tax rate.

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1.45%

The City of Scottsdale's Use tax rate is 1.45%. Use tax is imposed on the purchaser for the privilege of using, consuming or storing tangible personal property within the city limits. The use tax provides an indirect benefit to retailers located in Scottsdale because it removes incentives for customers to shop outside the city in order to avoid paying city tax. Approximately one fourth (1/4) of the tax is earmarked for the McDowell Sonoran Preserve in the McDowell Mountains and the surrounding Sonoran Desert and 1/14 for public safety.

Transient Tax Rate

In addition to the 1.65% privilege tax on rental of real property, there is a 5.0% transient lodging tax on any hotel, motel, apartment, or individual charging for lodging space to any person for 29 days or less.

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5.0%

In addition to the privilege tax, an additional 5.0% transient tax is due on income from charges for lodging to any transient. Fifty percent (50%) of the transient tax revenues are used for destination marketing to promote tourism and fifty percent (50%) are used for tourism-related event support, tourism research, tourism-related capital projects, and other eligible uses as determined by City ordinance or State law.

Combined Tax Rate

The combined rate consists of 5.6% for the State, .7% for the County, and 1.65% for the city of Scottsdale.

Download Combined Tax Rates Chart

7.95%

Personal Property Tax

All businesses are assessed tax on personal property.

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All businesses are assessed tax on personal property. Mobile homes can also be subject to personal property tax. Personal property subject to the tax includes: machinery, equipment, furniture, and other capital items. Businesses are required to complete an annual business property statement (Form DOR 82520). Governmental or charitable organizations may be exempt with the approval of the county assessor. After processing the annual business property statements, and completing the assessment of property to be placed on the personal property tax roll, the Assessor mails a Notice of Value to the Taxpayer. The County Treasurer bills personal property taxes.

Business owners should contact the Maricopa County Assessor at 602-506-3386 for information and to obtain the business property statement.

For additional information regarding personal property tax, contact the Arizona Department of Revenue at:

Phoenix Area: 602-255-2060
Other Arizona Areas: 800-352-4090
Arizona Department of Revenue. Select the "Property Tax Info" link.

Reporting & Payments

Contact the Arizona Department of Revenue for licensing, filing and payment of Transaction Privilege (sales) tax, including amounts owed to Scottsdale.

In order to engage or continue in business, a Transaction Privilege (Sales) Tax license is required. It is the business owner's responsibility to make an application and obtain a license with the Arizona Department of Revenue. Even if you have no income to report, you must write zero in the appropriate areas, then sign and submit your tax return.

Reporting & Payment Process

The online process is completed using the www.aztaxes.gov website.

Steps:

  1. Apply for a combined Arizona & Scottsdale sales tax license. Be sure to add Scottsdale as a Region Code (SC)
  2. File & pay sales tax. Be sure to file the return first, then pay the return.

Email sales tax questions or suggestions to BusinessRegulation@ScottsdaleAZ.gov.

Resources

List of Taxable Activities

Gross receipts generated from the following types of business are subject to the City of Scottsdale privilege tax. This summary provides only broad guidelines as to which activities are taxable and is not intended to be a comprehensive list of such activities.

Advertising (PDF):
Includes advertising by radio, television, direct mail, billboards, or any other means.
Amusements, Exhibitions & Similar Activities (PDF):
Includes movies, concerts, circuses, sporting events, video games, tennis courts, golf course, etc.
Construction Contractor, Owner Builders and Speculative Builders Guide (PDF):
Includes developers, speculative builders, general contractors, construction managers and owner-builders.
Job Printing (PDF):
Includes copying, photo reproductions, engraving, embossing, micrographics, etc.
Mining, Timbering & Extraction:
Includes mining, smelting or producing minerals; felling, producing or preparing timber; extracting, refining or producing oil or natural gas.
Publishing & Periodical Distribution (PDF):
Includes newspapers, periodicals, magazines, etc. including advertising and subscription income.
Renting, Leasing, or Licensing for Use of Real Property (PDF):
Includes rental or lease of any real property, including commercial building(s), apartments, homes or other residential units.
Renting, Leasing, or Licensing for Use of Tangible Personal Property (PDF):
Includes rental of equipment, automobiles, tools, furniture, etc.
Restaurants and Bars (PDF):
Includes preparing and serving food or beverages for consumption on or off the premises.
Retail Sales (PDF):
Includes the sale of any tangible personal property such as food, artwork, cars, furniture, equipment, etc.
Telecommunication Services (PDF):
Includes telephone, telegraph, cable TV, monitoring security or alarm systems, computer interface, FAX, etc.
Transient Lodging - Hotel/Motel (PDF):
In addition to the one and sixty-five hundredths percent (1.65%) privilege tax on the rental of real property, there is a five percent (5%) transient lodging tax on any hotel, motel, apartment, or individual charging for lodging space to any person for 30 days or less.
Transporting For Hire:
Includes transporting persons or property by railroad; property by aircraft; or oil, natural gas or artificial gas through a pipeline.
Use Tax (PDF):
Use tax is a one and forty-five hundredths percent (1.45%) tax on the purchase or rental of tangible personal property (such as vehicles, equipment, supplies, etc.) on which an equivalent City tax has not been paid.
Utility Services:
Includes providing water, electricity or gas.
The taxable activities in Scottsdale may be different than the State of Arizona or other municipalities. Please contact the Arizona Department of Revenue at 602-542-4576 or the other cities in which you will be conducting business for additional information.

FAQ

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.

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.

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.

When you apply for a Privilege (sales) Tax License with the Arizona Department of Revenue you will submit privilege (sales) tax for the State, the County and the City of Scottsdale on a consolidated tax return form. You can find more information at: www.azdor.gov/TransactionPrivilegeTax(TPT).aspx

You can apply for a Transaction Privilege (sales) tax license at: www.aztaxes.com. Tutorials on how to apply and file returns are available at: www.azdor.gov/TaxpayerEducation/Tutorials.aspx

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.

Taxes 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%).

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.

For tax exemption on retail items in the City of Scottsdale, 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 tax exemption on 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.

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.

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.

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).

Office Location

Phone Number/Hours
Monday, Tuesday, Thursday and Friday 8 a.m. - 5 p.m.
Wednesday 9 a.m. - 5 p.m. except City Holidays
Notice - Tuesday, December 19 2017 office hours will be 9:00 a.m. to 5:00 p.m.
If fingerprint processing is required,
please arrive at our office by 4:30 p.m.
P: 480-312-2400
F: 480-312-4806
Tax and License Office Location
Business Services Tax and License
7447 E. Indian School Road, Suite 110
Scottsdale, AZ 85251

Construction Factored Tax Calculations