You owe tax on advertising if:

You are in the business of selling "local advertising" within the city. This tax is paid on the advertising income of persons in such businesses as billboards, direct mail, radio, television, etc. The commissions and fees retained by an advertising agency are not part of the taxable income.


Tax rate on advertising

The tax rate is 1.75% of the gross income from "local advertising."

Collection of Tax

You may choose to charge the tax separately on each sale, or include Transaction Privilege Tax in your price. If you over charge any tax to your customers, you must remit the excess tax to the city.

If your price includes Transaction Privilege Tax, you can compute how much of the total price is Transaction Privilege Tax. You may deduct the Transaction Privilege Taxes from your gross receipts.


What is "local advertising"?

Local advertising is the advertising of products, services, and activities with a presence within the state. 

What is "local advertising"?
Advertising is considered "local advertising" unless it fits one of the following "national advertising" categories:
  • A product or service which is sold nationally or at least in other areas as well as Arizona. To qualify, the ad must not name just one specific Arizona business or one chain of Arizona businesses. It may name several different businesses.
  • A facility or service which is not located in Arizona.
  • A product which can only be bought from an out-of-State supplier.
  • Political advertising for a United States Presidential or Vice Presidential candidate.
  • Advertising by means of a coupon for a product good at any business which carries the product. This does not apply if the coupon is only good at one business or business chain.
  • Advertising a transportation service which includes substantial interstate and foreign carriage.

The following are some examples of "local advertising" and are taxable:
  • A chain of stores including some within the State when only the common business name is identified.
  • Sales of real estate located within the State.
  • A hospital located within the State.
  • An ad for a motel chain as long as the ad identifies any location within the State.
  • Stockbrokers doing business within the State.
  • A nonprofit organization which has an office within the State.
  • Political ads except for President & Vice President.
  • A restaurant chain which has an outlet within the State.
  • Service businesses when the service is provided within the State.
  • Coupons which can be redeemed only at a location within the State.
  • An entertainment event which will be held at a location within the State.


These examples are typically "national advertising" when the ad does not name a specific Arizona business or chain:
  • A soft drink sold nationally and available in numerous stores.
  • A new movie.
  • A Las Vegas hotel.
  • A Caribbean cruise.
  • Lots for sale in San Diego.
  • A coupon for purchase of toothpaste.
  • Records and tapes by mail order from out of state.
  • An airline company.
  • A railroad.



When is an advertising business operating "within the city"?

Businesses are generally considered to be doing business in the City if a major portion of their dissemination facilities are located in the City. A broadcasting studio located in the City is an example.

Outdoor advertising such as billboards is taxable based on the city in which the billboard is located.

Advertising income from newspapers and periodicals is taxable as part of the tax on publishing.


Office Locations:
Licensing Office
55 N. Center St.
Mesa, AZ  85201
Phone: 480-644-2316
FAX: 480-644-3999

Tax Audit & Collections
20 E. Main St, Suite 450
Mesa, AZ 85201
Phone: 480-644-3816
FAX: 480-644-2687

Office Hours:

Monday - Thursday
7:00 a.m. to 6:00 p.m.
Closed Fridays

Mailing Address:
Tax & Licensing Office
P.O. Box 1466
Mesa, Arizona 85211-1466


Tax Simplification questions 

More Information:

Tax & Licensing home

Tax Information
Recent Tax Changes

Licensing Information
Liquor License Status
Liquor License FAQ


Helpful Links

Fees and Charges