When it comes to sales tax in Arizona, you might be confused. First of all, sales tax is really the Transaction Privilege Tax (TPT), which is what the government entities in our state charge retailers doing business in Arizona. Those businesses are allowed to pass that charge along to customers, and consumers usually just call that the sales tax.
Some retailers might include the tax in the advertised price of an item. They still have to pay the state, and the price does take into account that they have to pay it. Have you ever encountered a sale where the ad claims no sales tax? That just means that the store is having a sale with discounts of 10 percent or whatever the rate at the time is. They are still paying the required TPT.
Sales tax often causes confusion for other reasons. It varies significantly from state to state. In Arizona, there's the amount that the state charges, but then there's also have the amount that counties charge and the amount that cities charge. So, every time you buy toilet paper, a smartphone, or anything in between, the tax charged has those three components.
But not everything in Arizona is taxed the same way. Services, such as hotel stays and car rentals, are taxed at different rates than retail products. And even retail products vary. Higher priced products, such as a Maserati, might not have the same sales tax rate as your dog's favorite stuffed animal. Food ordered at restaurants are taxed, but food purchased for home consumption from the grocery store might not be taxed in your city. If it is taxed, you should probably be paying only the city portion (usually about 2 percent or less), since the State of Arizona and Maricopa County don't charge tax on food intended for home consumption.
What about the pharmacy store that sells aspirin, cosmetics, and socks, but also sells cereal, ice cream, and fruit juice? In theory, in most Maricopa County cities, they should be charging you different tax rates on the different products.
So, to sum up, sometimes it is tough to tell what kind of sales tax you should be paying when you shop. On the other hand, sometimes it is easy. If you go to a hardware store and you buy a hammer, you pay the total combined tax rate for the State of Arizona, the county, and the city. If you eat in a restaurant, you likewise pay the total combined tax rate.
Let's say you eat at fast-food restaurants often, and you always frequent those places within the same city limits. You know, by using the Maricopa County sales tax chart, how much tax you should be charged. For example, the sales tax rate in the imaginary City of Blabberville, located in Maricopa County, is 9.3 percent. Everywhere you eat your burgers and fries in Blabberville, they charge 9.3 percent tax. Except for this one place. Yes, they are definitely located in Blabberville, but they are charging you 9.8 percent tax.
You ask the sales clerk why, and you get a glazed look. The staffer tells you that it's built into the system and they can't change it. What do you do? You have four choices. You can:
- Shrug your shoulders and ignore it. It was probably only four cents, or some other small amount, more than you should have been charged. Move on.
- Go ballistic in the store, yelling at the manager and demanding a refund of your four cents. While overcharging is always totally inappropriate—how many customers are they overcharging four cents on a daily basis?—it's probably not the best option.
- Contact the corporate headquarters of the restaurant and request clarification.
- Submit an inquiry to the Arizona Department of Revenue (AZDOR).
How to File a Complaint or Submit an Inquiry With AZDOR
The Criminal Investigations Unit of the AZDOR handles various types of reports of tax fraud. There are two options you can choose between.
- You call and report by phone. You may or may not be able to speak with a human representative at this line.
- You can send an email. This is your best bet. If you are computer savvy and can scan your receipt and attach it to your email, that's even better. You should provide the name and address of the retailer, as well as your own contact information in the email.
AZDOR tries to respond to every inquiry that it receives, but it will not disclose its findings on a complaint due to confidentiality issues. The department does not guarantee a specific timeframe that an inquiry will be addressed or a complaint will be investigated.