CPA for Phoenix, AZ Clients: Remote Tax, Payroll and Accounting

We are a Naperville, Illinois CPA firm and we serve Phoenix-area clients remotely; we do not have an office in Arizona. Arizona offers two tax features that stand out for Phoenix residents: a low flat personal income tax, and a business-side tax called transaction privilege tax that is not quite a sales tax. A recent change also matters to anyone who owns a rental house in the Valley.

Arizona's flat income tax

For tax year 2025, the Arizona resident return instructions use a single rate of 2.5% for all income, so there are no brackets to track. Arizona starts from federal adjusted gross income, so changes in federal law flow through unless Arizona adjusts them. Part-year residents and nonresidents with Arizona-source income file their own versions of the return. If you moved to the Phoenix area from Illinois or another state, your first Arizona return and your final return in the old state need careful coordination, and your employer needs a new withholding form. Our Arizona page has more on the state's rules.

Transaction privilege tax

TPT is often called a sales tax, but Arizona describes it as a tax on a vendor for the privilege of doing business in the state. The Department of Revenue collects it for counties and cities, and the rate depends on the business activity, the city and the county. A business may need a state TPT license, which costs $12 per location, and a TPT or business license from each city where it operates. A company with several locations can license each separately or use a consolidated license. Individuals can also owe use tax when a seller does not charge tax on something used in Arizona. Phoenix has a city privilege tax of its own, so a retailer or contractor in the city can face a different total than one in a neighboring suburb. Our sales and use tax service reviews license and filing setup.

The end of residential rental TPT

Arizona changed its rules for landlords. Starting with periods beginning January 1, 2025, residential rental owners no longer collect or file city TPT on income from stays of 30 days or more, and a city cannot impose a transaction privilege, sales, gross receipts, use or similar tax on renting real property for residential use. Many landlord licenses were cancelled effective December 31, 2024, but liabilities for earlier periods remain. Owners still need to register property with the county assessor where required. Short stays of fewer than 30 days remain subject to TPT under the transient lodging classification. If you rent out a house in Phoenix, our real estate investor tax work and our guide to rental property taxes cover the federal side. Nonresident Indians who buy Arizona property can read our page on NRIs investing in US real estate.

The community

The Phoenix-Mesa-Chandler metro area has about 67,000 residents who identify as Asian Indian alone or in combination, and Maricopa County has about 66,400 (roughly 1.5%), including about 24,300 in the city of Phoenix, according to the American Community Survey for 2020 to 2024. We support families and employers with the US-India tax treaty, India account reporting, and payroll.

How we can help

We prepare federal and Arizona returns, set up TPT licensing and filings, run payroll and keep books for Phoenix small businesses and landlords. For specific situations, such as a cancelled rental license with past-period liability, speak with a qualified professional.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.