Best Practices for Marijuana Businesses
Adult use marijuana establishments must remit transaction privilege tax (TPT) and marijuana excise tax (MET) to the Arizona Department of Revenue (ADOR). Establishments who sell marijuana are responsible for paying TPT on all marijuana products sold, as well as TPT and MET on adult-use marijuana products sold immediately upon being licensed by the Arizona Department of Health Services.
ADOR wants to provide these best practices and tips to help Marijuana Businesses comply properly.
For quick payments, businesses can pay a TPT liability on AZTaxes.gov under the “Quick Payment Links.” For MET, businesses must login to their account to make a payment.
File and pay the Marijuana Excise Tax using Form MET-1, not as excess (additional) tax on the TPT return.
To protect the safety for all parties involved and to expedite the process, all payments, both TPT and MET, should be paid online via AZTaxes.gov.
When filing an electronic MET-1, be sure that all inventories reported for the various product types are reported using the same unit of measurement (i.e. grams, ounces, pounds). “Each” is not an acceptable unit of measure as “each” item contains a varying amount of THC.
File and pay for the proper filing period and amend if a correction needs to be made.
Businesses must file and pay beginning with the start date of their business. If delinquent returns exist, file as soon as possible to avoid further penalties.
If you have questions about filing or paying, contact DispensaryService@azdor.gov.
Taxpayers are encouraged to file and pay online through AZTaxes.gov for faster processing and fewer errors.
Options for Businesses to Achieve Tax Compliance
You have options to come into compliance with the Arizona Department of Revenue (ADOR) if you have undisclosed tax obligations.
Review both options to see which path fits your situation and eligibility.
Managed Audit
Voluntary Disclosure
Learn more about the disclosure and compliance process to resolve outstanding obligations.
ACH Debit Payment Banking Transition
ADOR has transitioned Automated Clearing House (ACH) Debit payment banking services to JP Morgan Chase. All ACH Debit customers need to contact their bank to provide the new Company ID: 9031897000 to ensure that ACH debit transactions process as expected.
TPT Account Updates
ADOR encourages TPT taxpayers to ensure their account information is up to date. AZTaxes.gov enables registered businesses to update their accounts, but they must have an e-signature PIN to make changes.
On AZTaxes.gov, businesses can do the following:
Change their mailing address on corporate, withholding, and transaction privilege and use tax licenses.
Add, edit, and/or close locations for TPT licenses.
Cancel or close an existing TPT license or single location on a TPT license.
Add a new reporting jurisdiction, business code, or business or rental location.
To update the primary user, taxpayers can also download and submit a Business Account Update Form to ADOR.
Account/Period Selection for Electronic Returns
When filing an electronic TPT return, you will notice three choices listed under Month for selection. Only check the boxes that pertain to the return you are filing.
If filing a routine return, skip the selection and choose “Continue.”
Amended Return - Only check this box if your return is to correct the figures from a previously filed return. Remember, include all corrected lines and any lines that were present on the original return that do not require changes. This will replace the original return.
No Gross Receipts - Only check this box if you are filing a return with zero sales income or no gross receipts to report. Do not check this box if there is tax due and no payment is submitted with this return.
Close Your Account/Final Return - Only check this box if this is your last and final return and you would like to cancel your TPT license. Remember, you must cancel your license if you are closing your business or you may face penalties and renewal fees.
TPT Tax Tips
Avoid the hassle of mailing your return and payment by filing online. Reduces paper, postage, and time.
Only use black ink on white paper to file a return. This helps ensure your handwriting is clear and easy to read; permanent markers can make it hard to interpret handwriting.
Only send one return per envelope.
If you have more than one location, you are required to file electronically. Businesses with an annual TPT and use tax liability of $500 or more during the prior calendar year are required to file and pay electronically. Failure to comply with the electronic filing and payment requirements may result in penalties.
Even if you had no sales and/or tax due for the filing period, you must still file a $0 TPT return by checking the “No Gross Receipts” box.
When filing on AZTaxes.gov, you will receive a confirmation number and acknowledgement that ADOR received your return and payment.
Due Date Reminders
TPT Filing Frequency and Due Dates*- Monthly
If you’re a TPT filer, keep the following July TPT filing deadlines in mind:
August 20 - TPT return due date.
August 28 - Paper returns must be received at ADOR by this date.
August 31 - Electronic return filed in AZTaxes must be submitted before 11:59 p.m. on this date. Electronic payment made in AZTaxes must be submitted before 11:59 p.m. on this date.
*The electronic due date for TPT return is dependent on the return and payment being timely and filed electronically.
Tax Changes
Town of Oro Valley - Effective Date of July 1, 2026
On June 17, 2026 the Mayor and Council of the Town of Oro Valley passed Ordinance No. 26-10 withdrawing Model Option 15 to impose a local Use tax; setting a rate for Use tax of 2.50% and adopting Local Option HH-exempting certain types of charitable donations from the Use tax requirement for the donor; providing for Severability.
The (2.50%) affects the following business classifications:
Use Tax Purchases (029); Use Tax from Inventory (030).
Medical and Adult Use Marijuana:
Use Tax Purchases (029); Use Tax from Inventory (030).
Town of Florence - Effective Date of July 1, 2026
On March 17, 2026 the Mayor and Council of the Town of Florence passed ordinance 780-26 providing an increased tax rate on multiple Privilege Tax business classifications and Use Tax from two percent (2%) to three and one-half percent (3.5%) and an increased rate on the Hotel/Motel (Additional Tax) from two percent (2%) to five percent (5%). Providing for Severability.
The (3.50%) affects the following business classifications:
Advertising (018); Amusement (012); Job Printing (010); Manufactured Buildings (027); Timbering and other Extraction (020); Publication (009); Hotels (044); Commercial, Rental, Leasing, and Licensing for Use (213); Rental, Leasing, and Licensing for Use of TPP (214); Restaurant and Bars (011); Retail Sales (017); MRRA Amount (315); Communications (005); Transporting (006); Utilities (004); Use Tax Purchases (029); Use Tax from Inventory (030).
Medical and Adult Use Marijuana:
Adult Use Marijuana Retail Sales (420); Medical Marijuana Retail Sales (203); Retail Sales (Accessories and Ancillary Products) (017); Use Tax Purchases (029); Use Tax From Inventory (030); Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421).
Remote Seller and Marketplace Facilitators:
Retail Sales (605); Marketplace Facilitators in AZ Third Party Sales (605); Marketplace Facilitators in Arizona Retail Sales (017).
The (5.00%) affects the following business classifications:
Hotel/Motel (Additional Tax) (144).
City of South Tucson - Effective Date of July 1, 2026
On April 21, 2026 the Mayor and Council of the City of South Tucson passed ordinance 26-01 decreasing retail sales – food for home consumption from one and one-half percent (1.5%) to zero percent (0.0%), and providing for Severability.
The (0.00%) affects the following business classifications:
Retail Sales Food for Home Consumption (062).
Remote Seller and Marketplace Facilitators:
Retail Sales Food for Home Consumption (606); Marketplace Facilitators in Arizona Retail Sales Food for Home Consumption (062); Marketplace Facilitators in Arizona Third Party Sales Food for Home Consumption (606).
Cochise County - Effective Date of July 1, 2026
On November 4, 2025, the Cochise County Jail District Excise tax was voted on as part of a Special Election ballot. Following voter approval, the Board of Directors adopted Jail District Resolution No. 25-04, which reinstates the one-half cent (0.5%) excise tax on most eligible transactions. The tax will continue until the earlier of 90 days after the Jail District debt is fully paid or on July 1, 2043.
Town of Huachuca City - Effective Date of August 1, 2026
On May 28, 2026, the Mayor and Council of the Town of Huachuca City passed Ordinance No. 2026-06 providing an increased tax rate on multiple Privilege Tax business classifications and Use Tax from one and nine-tenths percent (1.9%) to two and nine-tenths percent (2.9%), and Rental, Leasing and Licensing for Use of Real Property from one percent (1%) to two and nine-tenths percent (2.9%). Providing for Severability.
The (2.9%) affects the following business classifications:
Advertising (018); Amusement (012); Contracting-Prime (015); Contracting-Speculative Builders (016); Feed at Wholesale (116); Job Printing (010); Manufactured Buildings (027); Timbering and other Extractions (020); Publication (009); Hotels (044); Commercial, Rental, Leasing, and Licensing for Use (213); Rental, Leasing, and Licensing for Use of TPP (214); Restaurant and Bars (011); Retail Sales (017); MRRA Amount (315); Communications (005); Transporting (006); Utilities (004); Use Tax Purchases (029); Use Tax from Inventory (030).
Medical and Adult Use Marijuana:
Medical Marijuana Retail Sales (203); Adult Use Marijuana Retail Sales (420); Retail Sales (Accessories and Ancillary Products) (017); Use Tax Purchases (029); Use Tax From Inventory (030); Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421).
Remote Seller and Marketplace Facilitators:
Retail Sales (605); Marketplace Facilitators in Arizona Retail Sales (017); Marketplace Facilitators in Arizona Third Party Sales (605).
City of Kingman - Effective Date of September 1, 2026
On June 16, 2026, the Mayor and Council of the City of Kingman passed Ordinance No. 2003 providing an increased tax rate on multiple Privilege Tax business classifications and Use Tax from two and one-half percent (2.50%) to three percent (3.00%), and Rental, Leasing and Licensing for Use of Real Property from two percent (2.00%) to three percent (3.00%), and Additional Tax on Transient Lodging from four percent (4.00%) to five percent (5.00%), and Adopting Local Option V, for single item transactions exceeding the ten thousand dollars ($10,000) threshold, the entire single item will be taxed at a rate of two and one-half percent (2.5%). Providing for Severability.
The (3.00%) affects the following business classifications:
Advertising (018); Amusement (012); Contracting-Prime (015); Contracting-Speculative Builders (016); Contracting-Owner Builder (037); Job Printing (010); Manufactured Buildings (027); Timbering and other Extractions (020); Publication (009); Hotels (044); Commercial, Rental, Leasing, and Licensing for Use (213); Rental, Leasing, and Licensing for Use of TPP (214); Restaurant and Bars (011); Retail Sales (017); MRRA Amount (315); Communications (005); Transporting (006); Utilities (004); Use Tax Purchases (029); Use Tax from Inventory (030).
Medical and Adult Use Marijuana:
Medical Marijuana Retail Sales (203); Adult Use Marijuana Retail Sales (420); Retail Sales (Accessories and Ancillary Products) (017); Use Tax Purchases (029); Use Tax From Inventory (030); Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421).
Remote Seller and Marketplace Facilitators:
Retail Sales (605); Marketplace Facilitators in Arizona Retail Sales (017); Marketplace Facilitators in Arizona Third Party Sales (605).
The (5.00%) affects the following business classifications:
Hotel/Motel (Additional Tax) (144).
The (2.50%) affects the following business classifications:
Retail Sales (Single Item Over $10,000) (917); Use Tax Purchases (Single Item Over $10,000) (929).
Medical and Adult Use Marijuana:
Medical Marijuana Retail Sales-Single Item Over $10,000 (665); Adult Use Marijuana Retail Sales-Single Item Over $10,000 (681); Retail Sales (Accessories and Ancillary Products)-Single Item Over $10,000 (917); Use Tax Purchases-Single Item Over $10,000 (929).
Remote Seller and Marketplace Facilitators:
Retail Sales-Single Item Over $10,000 (624); Marketplace Facilitators in Arizona Retail Sales-Single Item Over $10,000 (917); Marketplace Facilitators in Arizona Third Party Sales-Single Item Over $10,000 (624).
Town of Tusayan - Effective Date of October 1, 2026
On July 14, 2026, the Mayor and Council of the Town of Tusayan passed ordinance 2026-02 providing an increased tax rate on multiple Privilege Tax business classifications from two percent (2%) to four percent (4%) and an increased rate on Restaurants and Bars from four percent (4%) to six percent (6%). Providing for Severability
The (4.00%) affects the following business classifications:
Advertising (018); Amusement (012); Contracting-Prime (015); Contracting-Speculative Builders (016); Contracting-Owner Builder (037); Job Printing (010); Manufactured Buildings (027); Timbering and other Extraction (020); Publication (009); Hotels (044); Commercial, Rental, Leasing, and Licensing for Use (213); Rental, Leasing, and Licensing for Use of TPP (214); Retail Sales (017); Communications (005); Transporting (006); Utilities (004).
Medical and Adult Use Marijuana:
Medical Marijuana Retail Sales (203); Adult Use Marijuana Retail Sales (420); Retail Sales (Accessories and Ancillary Products) (017).
Remote Seller and Marketplace Facilitators:
Retail Sales (605); Marketplace Facilitators in Arizona Retail Sales (017); Marketplace Facilitators in Arizona Third Party Sales (605).
The (6.00%) affects the following business classifications:
Restaurant and Bars (011).
Medical and Adult Use Marijuana:
Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421).
Town of San Tan Valley - Effective Date of October 1, 2026 and January 1, 2027
The newly incorporated Town of San Tan Valley passed on July 1, 2026 Ordinance No. 2026-06 and Resolution No. 2026-41, adopting the Model City Tax Code and selected options.
Providing for Severability; and designating an effective date of October 1,2026 for:
The imposition of the Transaction Privilege and Use Tax License Fee of two dollars ($2.00) and License Renewal Fee of two dollars ($2.00).
The imposition of multiple Privilege Tax business classifications and Use Tax at two and one-quarter percent (2.25%); Hotels and Hotel/Motel (Additional Tax) at four and one-quarter percent (4.25%); all construction contracting at five percent (5.00%) and Metal Mining at one-tenth of one percent (0.10%).
The adoption of the following options:
Local Option H | Amusements, to impose tax on membership fees/charges for use. |
Local Option P | Feed at Wholesale, to impose tax on sales of wholesale feed and related products. |
Local Option GG | Utilities, to impose tax on municipal utilities provided to residents outside of Town Limits. |
Local Option JJ | Use Tax, to exempt purchases made by the city from Use Tax. |
Model Option 3 | Job Printing, to impose tax on job printing sold to publishers. |
Model Option 4 | Rental, Leasing and Licensing for Use of Real Property, to impose tax on the rental of real property to nonprofit primary health care facilities. |
Model Option 7 | Rental, Leasing, and Licensing for Use of Tangible Personal Property, to impose tax on the rental of coin-operated machines. |
Model Option 11 | Communications, to disallow tax credit for franchise and license fees paid to the municipality. |
Model Option 12 | Transporting for Hire, to exempt transporting persons for hire. |
Model Option 13 | Utilities, to disallow tax credit for franchise fees paid to the municipality. |
In the same Ordinance No. 2026-06, providing for Severability; and designating an effective date of January 1, 2027, the Mayor and Council of the Town of San Tan Valley passed the imposition of Retail Sales Food for Home Consumption at two and one-quarter percent (2.25%).
The (2.25%) affects the following business classifications:
Advertising (018); Amusements (012); Feed at Wholesale (015); Job Printing (010); Manufactured Buildings (027); Timbering and other Extraction (020); Publication (009); Rental, Leasing, and Licensing for Use of TPP (214); Commercial Rental, Leasing, and Licensing for Use (213); Restaurant and Bars (011); Retail Sales (017); Retail Sales Food for Home Consumption effective January 1, 2027 (062); MRRA Amount (315); Communications (005); Transporting (006); Utilities (004); Use Tax Purchases (029).
Medical and Adult Use Marijuana:
Medical Marijuana Retail Sales (203); Adult Use Marijuana Retail Sales (420); Retail Sales (Accessories and Ancillary Products) (017); Medical Marijuana Restaurant (221); Adult Use Marijuana Restaurant (421); Use Tax Purchase (029).
Remote Seller and Marketplace Facilitators:
Retail Sales (605); Marketplace Facilitators in Arizona Retail Sales (017); Marketplace Facilitators in Arizona Third Party Sales (605); Retail Sales Food for Home Consumption effective January 1, 2027 (606); Marketplace Facilitators in Arizona Retail Sales Food for Home Consumption effective January 1, 2027 (062); Marketplace Facilitators in Arizona Third Party Sales Food for Home Consumption effective January 1, 2027 (606).
The (5.00%) affects the following business classifications:
Contracting - Prime (015); Contracting - Speculative Builders (016); Contracting - Owner Builder (037).
The (0.10%) affects the following business classifications:
Severance - Metal Mining (019).
The (4.25%) affects the following business classifications:
Hotels (044); Hotel/Motel (Additional Tax) (144).
Education, Tutorials, and Training
All ADOR workshops are free of charge. Below are upcoming options available to you. To register or access online workshops, tutorials and resources, visit azdor.gov/taxpayer-education.
WORKSHOPS
ADOR Business Tax - Hosted by the Town of Gilbert - (In-Person)
Tower Room (Conference Room 146), Municipal Building I
50 E Civic Center Dr
Gilbert, AZ 85296
Tuesday, August 18, 2026
10:00 a.m. – 1:00 p.m.
ADOR Business Tax Basics - (Via Google Meets)
Wednesday, August 19, 2026
1:00 p.m. – 4:00 p.m.
ADOR Business Tax Basics - (Via Google Meets)
Tuesday, September 1, 2026
9:00 a.m. – noon
ADOR Common TPT Errors and How to Avoid Them - (Via Google Meets)
Thursday, August 20, 2026
10:00 a.m. – 11:00 a.m.
Automobile Dealer Business - (Via Google Meets)
Thursday, August 27, 2026
1:00 p.m. – 4:00 p.m.
ADOR Business Tax - Hosted by the City of Peoria - (In-Person)
Peoria City Hall
8401 W Monroe St
Peoria, AZ 85345
Thursday, September 10, 2026
9:00 a.m. – noon
ON-DEMAND TAX EDUCATION TUTORIALS: Please visit https://azdor.gov/taxpayer-education/tpt-tutorials
