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FAQ

What is the total tax rate?

The combined tax rate for the State of Arizona, Maricopa County, and the city of Scottsdale for most taxable activities is 8.05%. The combined rate consists of 5.6% for the State, .7% for the County, and 1.75% for the city of Scottsdale.

Does the city of Scottsdale tax the rental of real property?

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 1.75% 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 1.75% 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 1.75% tax rate.

Residential rentals for less than 30 days are subject to an additional 5.0% transient tax. (See Hotel/Motel brochure)

Scenario	Scottsdale Property Treatment
Owner has one residential rental property in Scottsdale that has rented on a long-term basis (greater than 29 days) and no other residential or commercial rentals in the state.	Non-taxable since the rental is on a long-term basis.
Owner has one residential rental property in Scottsdale that is rented on a short-term basis (less than 30 days) and no other residential or commercial property rentals in the state.	Taxable under the transient lodging classification since the rental is on a short-term basis of less than 30 days.
Owner has one residential property in Scottsdale and one commercial property in another city/town in Arizona.	Taxable due to the commercial rental property.
Owner has a tri-plex rental property in Scottsdale with all units rented or available for rent.	Taxable since a tri-plex has three separate units.
Owner has one residential rental property in three different cities/towns, one in Scottsdale.	Taxable due to having three units in the state.
Owner has a property manager taking care of renting their one residential rental property in Scottsdale.	Taxable due to the property manager renting the property for the owner. Property manager would report on the owner's license.
*This is not an exhaustive list of scenarios.

 

Is all food taxable in Scottsdale? Why?

Yes, at the City tax rate of 1.75%. 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.

How do I remit the tax due?

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: https://azdor.gov/transaction-privilege-tax/reporting-guide

How do I obtain a Privilege (sales) Tax License from the City of Scottsdale and the State of Arizona?

You can apply for a Transaction Privilege (sales) tax license at: azdor.gov. Tutorials on how to apply and file returns are available at: https://azdor.gov/taxpayer-education/tpt-tutorials

Do I need to charge and remit privilege (sales) tax?

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.

How do I calculate my taxes due?

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 (1.75%).

Are repair, service, installation labor, and shipping taxable?

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.

If an order is shipped out of state is it taxable?

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.

Are Internet sales taxable? If so, at what rate?

Items sold by Scottsdale based businesses via the Internet to Arizona residents are taxable and reportable to the City at the 1.75% tax rate.

There is a line for use tax on my return. What is use tax?

Use tax is a tax at the rate of 1.55% 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.

Where do City privilege (sales) and use taxes go?

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), .1% go to public safety (per 2004 voter approval) and .1% goes to transportation (per 2018 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), .1% go to public safety (per 2004 voter approval) and .1% goes to transportation (per 2018 voter approval).