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Why are there two calculations for an Arizona city?

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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.