Arizona · AZ · Money & taxes
Arizona: Are groceries taxed?
Groceries exempt
Arizona exempts groceries from its state transaction privilege (sales) tax, but cities and towns may tax food.
Arizona's sales tax is called the transaction privilege tax. Food sold by grocery businesses is exempt from the state tax, but food eaten on the premises is not. State law lets cities and towns levy their own tax on retail food sales, so local tax on groceries depends on the city.
What the law says
Except for the gross proceeds of sales or gross income from the sale of food for consumption on the premises, the taxes imposed by this chapter do not apply to the gross proceeds of sales or gross income from sales of food by any of the following: 1. A retailer who conducts an eligible grocery business.
Sources
- A.R.S. § 42-5102 (tax exemption for sales of food) Official · azleg.gov
- A.R.S. § 42-5061(A)(15) (retail classification; food exemption) Official · azleg.gov
- A.R.S. § 42-6017 (municipal taxation of retail sales, including food) Official · azleg.gov
Confirm with the state
- Agency
- Arizona Department of Revenue
- Phone
- (602) 255-3381
- Website
- azdor.gov
How bordering states compare
- California Groceries exemptCalifornia exempts most groceries, legally called food products for human consumption, from sales tax.
- Colorado Groceries exemptColorado exempts food for home consumption from its state sales tax, but cities and counties may still tax groceries.
- Nevada Groceries exemptNevada exempts food for human consumption from sales tax; prepared food, alcohol, pet food and vitamins are taxed.
- New Mexico Groceries exemptNew Mexico lets grocery stores deduct food sales from gross receipts, so groceries aren't subject to its gross receipts tax.
- Utah Taxed at a lower rateUtah taxes groceries at a 1.75% state rate instead of its 4.85% general state rate; with local taxes, groceries pay 3%.