The Sedona sales tax, formally called the transaction privilege tax, runs 9.85% on the Yavapai County side of the city and 10.4% on the Coconino County side.1Arizona Department of Revenue. Transaction Privilege and Other Tax Rate Tables – January 1, 2026 Arizona technically charges the tax to the business for the privilege of operating in the state rather than to the shopper, but businesses pass it through as a line on the receipt, so at the register it works like any other sales tax.
Why the Rate Depends on Which Side of Sedona You’re In
Sedona straddles the Yavapai–Coconino county line, and the county portion of the tax is different on each side. Three layers stack to produce the final rate: the state charges 5.6%, Sedona charges 3.5%, and the county adds its own excise tax on top.2Arizona Department of Revenue. Sedona1Arizona Department of Revenue. Transaction Privilege and Other Tax Rate Tables – January 1, 2026
- Coconino County excise is 1.3%, so the combined rate is 10.4%.
- Yavapai County excise is 0.75%, so the combined rate is 9.85%.
The half-point gap matters if you’re running a business near the county boundary. Confirm the exact classification of your address with the Arizona Department of Revenue before you start collecting, because charging the wrong rate creates problems in both directions.
Higher Rates for Hotels and Short-Term Rentals
Lodging carries an extra charge. Sedona adds a 3.5% bed tax on transient lodging on top of its regular 3.5% municipal rate, so lodging operators owe 7% to the city alone before state and county taxes are added.2Arizona Department of Revenue. Sedona The combined lodging rates come to 13.325% on the Yavapai side and 13.9% on the Coconino side.3City of Sedona. Short-Term Rentals Frequently Asked Questions
If you list a property on Airbnb or Vrbo, the platform may collect some of these taxes for you. You remain responsible for confirming the full amount has been remitted. Gaps between what a platform collects and what the state expects are a common audit trigger.
What’s Exempt
Not every purchase in Sedona is taxed. Arizona exempts groceries and most food bought for home consumption, prescription drugs, insulin, hearing aids, prosthetic devices, and durable medical equipment prescribed by a licensed provider.4Arizona Legislature. Arizona Code 42-5159 – Exemptions Sedona’s municipal tax follows the same framework, so most of these items are exempt from the city portion too.
Businesses buying inventory for resale don’t owe TPT on wholesale purchases, but the exemption has to be documented at the time of sale with Arizona Form 5000A, the resale certificate.5Arizona Department of Revenue. Arizona Resale Certificate A single certificate can cover an ongoing relationship for up to 48 months as long as the seller keeps proof that the buyer’s TPT license is valid each year. If the buyer ends up using the goods personally, Arizona use tax applies, and deliberately misusing a resale certificate is a felony.
If You Sell in Sedona: License and Filing
Any business conducting taxable activity in Sedona needs a TPT license before it collects a dollar of tax. You apply using Arizona Form JT-1, the Joint Tax Application, which registers you with the Department of Revenue and the Department of Economic Security at once.6Arizona Department of Revenue. Joint Tax Application for a TPT License7Arizona Department of Revenue. TPT License8Arizona Department of Revenue. Region Codes Filing happens through AZTaxes.gov.9Arizona Department of Revenue. Transaction Privilege Tax
How often you file depends on your estimated annual combined tax liability:10Arizona Department of Revenue. TPT Filing Frequency
- Annual: under $2,000
- Quarterly: $2,000 to $8,000
- Monthly: over $8,000
Most active Sedona businesses end up filing monthly. Even at the 9.85% combined rate, a shop doing roughly $7,000 in sales a month will cross the $8,000 annual liability threshold. Monthly returns are generally due by the last day of the following month, though a few deadlines land a day or two earlier.11Arizona Department of Revenue. Due Dates One detail that trips up new owners: you still have to file for periods with zero sales. Skipping a $0 return is treated the same as filing late.
Annual Renewal
TPT licenses expire at the end of each calendar year and must be renewed by January 1. Pay after the last business day of January and the renewal becomes delinquent, with a penalty of 50% of the city renewal fee.12Arizona Department of Revenue. Renewing a TPT License Operating without a current license is a class 3 misdemeanor. Renewals go through AZTaxes.gov, the same portal you use to file returns.13Arizona Department of Revenue. E-File Services
What Late Filing Costs
Arizona charges separate penalties for failing to file and failing to pay, and they can stack:
- Failure to file: 4.5% of the tax due per month or partial month, up to 25%.
- Failure to pay: 0.5% of the unpaid tax per month, up to 10%.
- Combined penalties for the same period cannot exceed 25% of the tax owed.
Interest runs on top of penalties. For 2026, the rate is 7% annually for the first quarter and 6% for the second, adjusted each quarter from the federal short-term rate plus three points.14Arizona Department of Revenue. Interest Rates The charges compound fast. A business that owes $5,000 and ignores it for six months can face more than $1,500 in combined penalties and interest.
How Long to Keep Records
Keep TPT records for at least four years from the due date of the return or the date you filed, whichever is later. That means gross receipts, invoices, exemption certificates, and anything else supporting the numbers you reported.15Arizona Department of Revenue. Business Record Keeping
Two situations stretch that window. Underreport gross income by 25% or more and the state can look back six years. File a fraudulent return or never file one at all, and there is no time limit on assessment. Four years of organized records is manageable. Having to reconstruct them under audit pressure is where small problems become expensive ones.