Sales Tax Rules
Arizona imposes a state sales tax rate of 5.6%, with a maximum combined rate (state plus local) of 11.2% when local taxes are added. Economic nexus is triggered at $100,000 in sales — meaning out-of-state businesses that exceed this threshold must collect and remit Arizona sales tax. SaaS and digital software products are taxable in Arizona. Groceries are exempt from state sales tax.
SaaS Tax Details
Taxed under the personal property rental classification.
Grocery Details
Exempt from state tax; many cities still impose a local tax.
What is the sales tax rate in Arizona?
Arizona's state sales tax rate is 5.6%. When local taxes are added, the maximum combined rate can reach 11.2%. The actual rate you pay depends on the county and city where the purchase is made.
What is the economic nexus threshold in Arizona?
Arizona requires out-of-state businesses to collect sales tax once they exceed $100,000 in sales in a calendar year. Once nexus is established, the business must register, collect, and remit Arizona sales tax.
Is SaaS taxable in Arizona?
Yes. Arizona considers SaaS (Software as a Service) taxable. Businesses selling SaaS products to Arizona customers must collect sales tax. Taxed under the personal property rental classification.
Are groceries taxed in Arizona?
Groceries are generally exempt from sales tax in Arizona. Exempt from state tax; many cities still impose a local tax.
Are digital goods taxable in Arizona?
Yes. Arizona taxes digital goods including downloaded software, music, movies, and e-books. Businesses selling digital products to Arizona customers should collect sales tax.
Are clothing items exempt from sales tax in Arizona?
Clothing is subject to sales tax in Arizona at the standard state rate.
How often do I need to file sales tax in Arizona?
Arizona requires sales tax filing on a Monthly, Quarterly, or Annual. Online filing is available through the official Department of Revenue portal.
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Official Source
Arizona Department of Revenue
Last verified: 2026-03-26 · Always confirm current rates with your tax advisor before filing.