- Taxable retail sales of tangible personal property delivered to Arizona customers
- Direct sales under the retail TPT classification
- Sales facilitated by a licensed marketplace facilitator that collects and remits TPT on the business's behalf
- Non-retail TPT classifications such as rentals, contracting, and restaurant sales
Affiliate nexus
Arizona aggregates sales across affiliated entities when determining whether the economic nexus threshold is met. An "affiliated person" is defined as any entity with a direct or indirect ownership interest of more than 5% in the other entity. When the combined taxable retail sales of all affiliated entities exceed $100,000, each affiliate must independently obtain its own TPT license, even if no single affiliated entity would qualify on its own. Affiliates may satisfy this obligation through individual returns or on a consolidated return.
Physical nexus
Physical presence in Arizona creates substantial nexus across all 16 TPT classifications from the first dollar of sales, with no threshold requirement. Confirmed physical nexus triggers include maintaining an office or other place of business in Arizona; owning or leasing real or personal property in the state; maintaining inventory in Arizona under the seller's direction and control; delivering goods in company-owned or leased vehicles; employing or engaging agents in Arizona for sales, management, or marketing purposes; and using in-state suppliers to fulfill orders.
Certain activities do not create physical nexus: attending a one-time conference or meeting in Arizona without making sales; a remote employee performing back-office tasks while temporarily present in Arizona for personal reasons; and inventory held in a third-party fulfillment center over which the seller exercises no direction or control, though the Arizona DOR has not issued a definitive ruling on this last point.
Establishing TPT nexus in Arizona automatically confers nexus with all Arizona municipalities, as state nexus equals municipal nexus under the state's unified TPT structure.
Trailing nexus
Arizona has two distinct trailing nexus rules codified in A.A.C. R15-5-2002(E). For physical nexus, the obligation to report and remit TPT continues through the last day of the month in which physical presence ends. For economic nexus, a business that met the $100,000 threshold in the prior calendar year but does not meet it in the current year must continue remitting for the entire current calendar year.
