by PHOENIX, AZ — Whether you’re running a business in Arizona’s largest city or making remote sales to Phoenix customers, understanding the latest sales tax rules is essential for staying compliant and avoiding costly mistakes.
As of July 1, 2025, the combined sales tax rate in Phoenix has increased to 9.1%, following a 0.5% city tax hike approved by the Phoenix City Council.
Breaking Down the Sales Tax Rates
The total sales tax rate in Phoenix is made up of:
- Arizona state sales tax: 5.6%
- Maricopa County sales tax: 0.7%
- City of Phoenix sales tax: 2.8% (increased from 2.3% in July 2025)
- Special district taxes: 0%
This combined rate applies to all taxable goods and services sold within Phoenix unless an exemption applies.
Top 10 Phoenix ZIP Codes and Their Tax Rates
Here’s a snapshot of sales tax rates across the most populated ZIP codes in Phoenix:
| ZIP Code | State Tax | County Tax | City Tax | Special Tax | Total |
|---|---|---|---|---|---|
| 85008 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85009 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85022 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85029 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85032 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85033 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85035 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85037 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85041 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
| 85042 | 5.6% | 0.7% | 2.8% | 0.0% | 9.1% |
What Items Are Taxable in Phoenix?
Common taxable items include:
| Item | Description | TIC Code |
|---|---|---|
| Apparel | Clothing and footwear | TIC1001 |
| Electronics | Consumer electronics | TIC1002 |
| Furniture | Household furniture | TIC1003 |
What Items Are Tax-Exempt?
Tax-exempt items include:
| Item | Description | TIC Code |
|---|---|---|
| Groceries | Unprepared food items | TIC2001 |
| Prescription Drugs | Medications prescribed by a doctor | TIC2002 |
| Medical Devices | Durable medical equipment | TIC2003 |
Who Needs to Collect Sales Tax in Phoenix?
If your business has either a physical nexus or an economic nexus in Arizona, you’re required to collect sales tax. This applies to businesses with:
✅ A physical location, warehouse, employees, or property in Arizona
✅ Sales of $100,000 or more or 100+ transactions into Arizona annually (even if based out of state)
How to Get a Sales Tax Permit
Businesses that meet nexus requirements can register for a sales tax permit through the Arizona Department of Revenue’s website. Registration is free and ensures legal compliance.
Staying Sales Tax Compliant
With different tax rates across cities and the potential for changes throughout the year, staying compliant can be complicated. Businesses can:
✅ Manually track and update tax rates (labor-intensive)
✅ Use automated solutions like TaxCloud to calculate, collect, and remit taxes accurately
Filing and Remitting Sales Tax in Arizona
The good news for businesses is that Arizona simplifies the process. You only need to file a state-wide sales tax return, regardless of where the sales occurred within Arizona. The state distributes the collected taxes to the appropriate counties and cities.
Final Thoughts
The 2025 sales tax landscape in Phoenix brings important changes for businesses. With a combined tax rate of 9.1%, understanding your obligations is key to avoiding penalties and staying compliant. Whether you’re a local retailer, an online seller, or a service provider, being proactive with sales tax collection and filing protects your business.
