If you sell products to customers in Arizona, you may have a tax obligation even if your business is located outside the state.
Arizona uses a Transaction Privilege Tax (TPT) rather than a traditional sales tax. For remote sellers, Arizona’s economic nexus threshold is more than $100,000 in direct gross sales into Arizona during the current or previous calendar year.
Arizona Economic Nexus at a Glance
| Rule | Arizona Rule |
| Economic nexus threshold | More than $100,000 |
| Measurement period | Current or previous calendar year |
| Transaction threshold | None |
| Marketplace sales included in seller’s threshold? | No |
| Marketplace facilitator rules | Yes |
| Tax authority | Arizona Department of Revenue (ADOR) |
What Is Economic Nexus in Arizona?
Economic nexus allows Arizona to require an out-of-state business to pay TPT based on its level of sales into the state, even if it doesn’t have a physical presence there.
Arizona is slightly different from most states because it technically doesn’t impose a traditional sales tax. Instead, it imposes Transaction Privilege Tax (TPT) on businesses for the privilege of conducting taxable business in the state. For remote sellers, economic nexus is based on their direct retail sales into Arizona.
What Is the Economic Nexus Threshold in Arizona?
A remote seller generally establishes economic nexus when it has more than $100,000 in direct gross sales into Arizona during the current or previous calendar year. Arizona does not have a separate transaction-count threshold.
If you exceed the threshold during the current year, your TPT obligation generally begins in the month following 30 days after the threshold was met.
What Sales Count Toward Arizona’s $100,000 Threshold?
For a remote seller, Arizona looks at direct sales into the state when calculating the $100,000 economic nexus threshold.
This can include sales made through:
- Shopify
- WooCommerce
- Your own ecommerce website
- Other direct sales channels
Sales made through a marketplace facilitator are not included in the remote seller’s economic nexus threshold calculation.
Businesses selling through multiple channels should therefore track their direct Arizona sales separately from marketplace sales.
Do Amazon Sales Count Toward Arizona Economic Nexus?
Yes, economic nexus isn’t the only way to establish sales tax nexus.
Physical presence can potentially create nexus regardless of your sales volume. This can include:
- Inventory stored in Alabama
- A warehouse or business location
- Employees working in the state
- Certain other in-state business activities
This is particularly important for Amazon FBA sellers and businesses using third-party warehouses.
What Should You Do After Crossing the Alabama Nexus Threshold?
Generally, no. Sales made through a marketplace facilitator such as Amazon, Etsy, eBay or Walmart are not included when calculating an individual remote seller’s $100,000 economic nexus threshold.
The marketplace facilitator is generally responsible for collecting and remitting TPT on those transactions.
For example, if you have $150,000 of Amazon sales and $60,000 of direct Shopify sales into Arizona, you would generally remain below the economic nexus threshold based on your direct sales. However, sellers should also consider whether they have physical nexus in Arizona.
Can You Have Arizona Nexus Below $100,000?
Yes, physical presence can create an Arizona TPT obligation regardless of whether you reach the economic nexus threshold.
Physical nexus can potentially be created through:
- An office or other business location
- Employees working in Arizona
- Property or equipment in the state
- Certain ongoing business activities in Arizona
Once physical nexus is established, the remote seller economic nexus threshold no longer applies and the business is generally treated as an Arizona retailer.
How Does Arizona TPT Work?
Unlike a traditional sales tax imposed on the customer, TPT is a tax on the seller for the privilege of conducting taxable business in Arizona. Remote sellers with economic nexus must account for the applicable state, county and city taxes.
The rate can therefore vary depending on where the sale is delivered. Arizona DOR publishes specific tax rate tables for remote sellers and marketplace facilitators.
What Should You Do After Crossing the Arizona Nexus Threshold?
If your direct Arizona sales exceed $100,000:
- Confirm when you crossed the threshold.
- Check whether you also have physical nexus.
- Register for an Arizona TPT license through AZTaxes.gov.
- Configure your sales channels to collect the appropriate tax.
- Begin filing and remitting TPT as required.
Remote sellers should continue monitoring their Arizona sales because both the current and previous calendar year can affect their nexus status.
Arizona Economic Nexus Examples
Shopify seller:
A remote business has $120,000 of direct Shopify sales into Arizona. It exceeds the economic nexus threshold and should register for TPT.
Amazon-only seller:
A business has $200,000 of Arizona sales entirely through a qualifying marketplace facilitator. Those marketplace sales aren’t included in the individual remote seller’s economic nexus threshold, and the marketplace generally handles TPT collection.
Amazon and Shopify seller:
A business has $120,000 of Amazon sales and $105,000 of direct Shopify sales into Arizona. The direct sales alone exceed $100,000, so the seller has economic nexus and should register for its direct sales.
What If You Should Have Registered Previously?
If you exceeded Arizona’s economic nexus threshold in a previous period but didn’t register, you could have outstanding TPT liabilities, together with applicable penalties and interest.
Depending on your circumstances, a Voluntary Disclosure Agreement (VDA) may be worth considering to resolve historical tax liabilities. It’s important to investigate your options before being contacted by the Arizona Department of Revenue.
FAQs
What is the economic nexus threshold in Arizona?
Remote sellers generally establish economic nexus when their direct gross sales into Arizona exceed $100,000 during the current or previous calendar year.
Does Arizona have a transaction threshold?
No, Arizona’s current remote seller economic nexus test is based on sales rather than a separate transaction-count threshold.
Do Amazon sales count toward Arizona’s economic nexus threshold?
No, sales made through a marketplace facilitator generally aren’t included when calculating an individual remote seller’s $100,000 threshold.
Does Arizona have sales tax?
Arizona technically uses Transaction Privilege Tax (TPT) rather than a traditional sales tax. TPT is imposed on the seller for conducting taxable business in the state.
Can I have Arizona nexus without reaching $100,000?
Yes, physical presence can create nexus independently of the $100,000 economic nexus threshold.
Final Thoughts
Arizona’s economic nexus rules are relatively straightforward once you understand the distinction between direct and marketplace sales. Remote sellers should monitor their direct Arizona sales against the $100,000 threshold while also considering whether they have any physical presence in the state.
Businesses selling through multiple channels should keep marketplace and direct sales clearly separated, as this can significantly affect whether the economic nexus threshold has been reached.
RJM Tax Exemption can help you determine whether you have nexus in Arizona and assist with TPT registration, filing and Voluntary Disclosure Agreements where required.
Last updated: August 2026. Tax rules can change. Always check current Arizona Department of Revenue guidance when determining your obligations.
