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Why are there two calculations for an Arizona city?

Overview

You want to know why you are seeing two separate tax calculations for an Arizona city on your invoice.

Environment

Avalara AvaTax

Resolution

  • Arizona imposes a two-tier tax rate for any single item of tangible personal property.
    • Each city can set a dollar-amount threshold, where the standard rate applies to the dollar amount below the threshold and a different rate applies to the dollar amount above the threshold.
    • An example example is Phoenix, where the first  $10,968.00 in sales for a single item is taxed at 2.3%, while the remaining amount for the item is taxed at 2%.

Next Steps

Please review the TPT tax rate tables on the Arizona state website for information on tax rates and what local jurisdictions have adopted the two-tier tax rates. Cities with this two-level tax structure have separate rates listed for "single item portion over" the threshold amount.