What is an event?
An event may be a trade show, swap meet, craft show, specialty show, fair, parade, sporting event, circus, country store at a RV park, carnival, festival, religious revival or other church event, political rally, vehicle show and display or similar recognized activity.
Are event activities taxable?
Transaction privilege tax is divided into different classifications or activities. The most common classifications of taxable transactions for vendors at events include the following: retail sales, restaurant/bar, and amusements.
You cannot lawfully operate a taxable business until you have a Transaction Privilege Tax license for the State of Arizona and the City of Mesa.
For more information on license requirements, visit Applying for a TPT License.
To apply for a license, visit www.aztaxes.gov.
If you sell tangible personal property, including crafts (even if you consider it a hobby), at events in the City of Mesa, you must possess a Transaction Privilege license for the City of Mesa and are responsible for remitting transaction privilege tax under the Retail Tax Classification (17) (Code ME for Mesa)
There are a few exceptions to the tax on retail sales; however, the most common exemption is sale for resale (sometimes called wholesale).
Note: The sale of food at events is taxable unless it meets the requirements for an exemption as "Food For Home Consumtion". For further information please see Arizona Publication 575: Tax Exempt Food.
Sales for Resale (Wholesale)
When you sell an item to a customer who plans to rent or resell the item in the normal course of their business, you may not owe tax on that sale. You must have a clear and complete record of these sales or you will be responsible for the tax. Your records must separately show figures for retail sales and sales-for-resale.
Sales-for-resale may be documented by using an exemption certificate prescribed by Arizona Department of Revenue TPT Forms.
- the merchandise or property sold
- the buyer’s name and address
- the buyer’s transaction privilege tax license number
- a signed statement by the buyer stating the goods will be resold in the ordinary course of business.
Remember, without complete records, all your sales are subject to tax. The City of Mesa will accept the Arizona Department of Revenue Form 5000 “Exemption Certificate” if complete and accepted in good faith.
Sales of Artwork
The sales of paintings, sculptures or similar works of fine art, provided that such works of fine art are sold by the original artist, are exempt. However, the sales of “art creations”, such as jewelry, macramé, glasswork, pottery, woodwork, metalwork, furniture, and clothing, when such “art creations” have a dual purpose, both aesthetic and utilitarian, are not exempt, whether sold by the artist or by another. See Mesa Tax Code, Section 5-10-465 (t).
Restaurant/Bar (Food & Beverages)
Sales of food or beverages prepared or served for consumption on or off the premises, including the activity of catering, are taxable under the Restaurant and Bar Tax Classification. Cover charges and minimum charges must be included in the gross income. Businesses selling alcoholic beverages are required to obtain a City of Mesa Liquor License as well as the City of Mesa Transaction Privilege Tax License. Contact the licensing office at 480-644-2316 for information.
The tax on amusements applies whenever an admission is charged for events, exhibitions or entertainment. Any charges or fees for activities such as carnivals, circuses, fairs, contests, games, rides, animal rides, balloon rides, public dances, dance halls, sports events or any admission fees are subject to tax under the Amusement Tax Classification.
Displaying the Tax License
The transaction privilege tax license shall be on display to the public in the licensee’s place of business in a conspicuous place. Posting the license at all times avoids delays while conducting business when tax department representatives make compliance checks to verify the vendors are licensed.
Reporting your Tax Liability
All vendors are required to report transaction privilege tax for any sales occurring at the Convention Center. Vendors must obtain a Transaction Privilege Tax License prior to the event. The cost of the license is $20.00.
Calculating the Tax
Although transaction privilege tax is usually passed on to the customer, it is actually a tax on the vendor for doing business in Arizona. The tax can be added to the sales price or factored into the sales price.
Tax Rate at Events
The City of Mesa tax rate is 2% of the taxable income. The total combined rate is 8.3% for retail sales. (5.6% state + .7% county + 2% city).
Factoring Transaction Privilege Tax
When a business “factors” transaction privilege tax, it means the tax is included in the total price rather than shown as a separate charge. If you choose to factor the tax, the tax must be calculated using a factoring formula. There are many different factoring formulas depending on the city tax rates, state and county tax rates or differences in allowable city tax deductions. The combined factors for the State, Maricopa County & City of Mesa tax rate of 8.3% are
.07663897 Retail, Restaurant/Bar, Amusements. See more information on factoring tax.
Out of State Sales
All of the following requirements must occur for an out of state exempt sale of tangible personal property:
- The order is placed from without the State of Arizona; and
- The property is delivered to the buyer at a location outside the State; and
- The property is purchased for use outside the State.
Persons engaged in a business claiming out-of-State sales shall maintain accounting records or books indicating for each out-of State sale the following documentation:
- Information regarding location of order placement; and
- Shipping, delivery or freight documents showing where the buyer took delivery; and
- Documentation of intended location of use or storage of the tangible personal property sold to such buyer.
A broker acting for a seller, lessor or other similar person deriving gross income shall be liable for the tax. See Mesa Tax Code, Regulation 5-10-100.1.
For more information see Special Event/Craft Show Vendors [PDF].