If you live in or do business in Scottsdale, Arizona, you’re probably wondering exactly how much sales tax you’re paying on your purchases. The truth? Scottsdale sales tax is one of the higher rates in Arizona, and understanding it can save you real money. Whether you’re buying groceries, furniture, or a car, knowing the breakdown of Scottsdale sales tax rates—and what’s actually taxable—is the difference between feeling blindsided at checkout and making smart spending decisions.
Let’s be real: sales tax feels invisible until it hits your wallet. But here’s the thing—it adds up fast, and if you’re not paying attention, you could be overspending without even realizing it. This guide walks you through everything you need to know about Scottsdale sales tax, from the current rates to exemptions and strategies to minimize what you owe.
Current Scottsdale Sales Tax Rates
As of 2024, Scottsdale’s combined sales tax rate sits at 8.55%. This breaks down into:
- Arizona state sales tax: 5.6%
- Maricopa County sales tax: 0.7%
- Scottsdale city sales tax: 2.25%
That 8.55% might not sound like much, but it compounds quickly. On a $100 purchase, you’re paying $8.55 in tax. On a $1,000 purchase? That’s $85.50. Over the course of a year, most Scottsdale residents pay hundreds—sometimes thousands—in sales tax without thinking twice about it.
The key thing to understand is that Scottsdale’s Scottsdale sales tax rate is one of the highest in the state. If you’re comparing it to other Arizona cities, you’ll notice Scottsdale residents pay more. This is partly because Scottsdale is a well-funded municipality with robust services, but that doesn’t make your tax bill any smaller.
Pro Tip: Keep track of your major purchases throughout the year. If you’re buying furniture, appliances, or vehicles, timing your purchase strategically—or looking for tax-exempt alternatives—can save you hundreds.
How Scottsdale Sales Tax is Broken Down
Understanding where your sales tax money goes helps explain why Scottsdale’s rate is what it is. The breakdown isn’t random—each level of government has a specific purpose for their portion.
State Tax (5.6%): This goes to Arizona state programs, including education, infrastructure, and public services. Arizona has relied heavily on sales tax revenue for decades, which is why the state rate is relatively high compared to other states.
County Tax (0.7%): Maricopa County uses this portion for county-level services like parks, public health, and transportation infrastructure.
City Tax (2.25%): Scottsdale keeps this portion for local services—police, fire, street maintenance, parks, and city administration. The city’s high quality of life and excellent public services are partially funded by this local sales tax.
This tiered system means that when you pay Scottsdale sales tax, you’re actually paying three different entities. It’s worth noting that each level can theoretically increase their rate independently, though that doesn’t happen frequently.
What’s Actually Taxed in Scottsdale
Here’s where it gets tricky. Not everything you buy is subject to the full Scottsdale sales tax rate. Arizona has specific rules about what’s taxable and what’s not, and understanding these rules can genuinely save you money.
Generally Taxed Items:
- Clothing and accessories (with rare exceptions)
- Electronics and appliances
- Furniture and home goods
- Books and magazines
- Toys and games
- Vehicles (though with special rules—see below)
- Restaurant meals and prepared foods
- Gasoline and fuel
- Haircuts and personal services
Generally NOT Taxed Items:
- Unprepared groceries (raw food you cook at home)
- Prescription medications
- Medical equipment and supplies (often, with caveats)
- Agricultural products (for farmers)
The distinction between prepared and unprepared food is crucial. Buy a rotisserie chicken from the grocery store? That’s taxed as prepared food. Buy a raw chicken to cook at home? No tax. This is one of the most common areas where people overpay without realizing it.
For a comprehensive breakdown of what Arizona considers taxable, you can check the Arizona Department of Revenue’s official guidelines, which detail the state’s transaction privilege tax (Arizona’s official name for sales tax).
Sales Tax Exemptions You Should Know
Beyond the basic taxable vs. non-taxable divide, Scottsdale and Arizona offer specific exemptions that many people don’t know about. If you qualify, these can save you real money.
Medical Exemptions: Certain medical devices and supplies are exempt from Scottsdale sales tax. This includes items like wheelchairs, crutches, hearing aids, and diabetic supplies. You’ll need documentation (usually a prescription or doctor’s note), but if you use these items regularly, the savings add up.
Manufacturing Exemptions: If you’re buying equipment or materials for manufacturing purposes, you may qualify for an exemption. This is primarily for businesses, but it’s worth knowing if you run a home-based operation.
Agricultural Exemptions: Farmers and agricultural operations can exempt certain purchases related to food production. Again, this is primarily for businesses, but Arizona takes agriculture seriously and offers meaningful exemptions.
Nonprofit Exemptions: Registered nonprofits can often purchase items tax-free. If you work for or volunteer with a nonprofit, ask about this—it’s one of the most underutilized exemptions.
To claim an exemption, you typically need to provide documentation to the seller (like a resale certificate or nonprofit registration). It’s not automatic, so you have to ask.
Warning: Don’t assume something is exempt just because you think it should be. The IRS and state tax agencies have very specific rules. When in doubt, ask the retailer or check with the Arizona Department of Revenue directly. Claiming false exemptions can result in penalties.
Vehicle Sales Tax in Scottsdale
Buying a vehicle in Scottsdale? The Scottsdale sales tax rules for vehicles are slightly different from regular retail purchases, and this is where people often lose the most money without realizing it.
When you purchase a vehicle in Scottsdale, you pay the full 8.55% sales tax on the purchase price. However, there’s a critical distinction: trade-in value. If you trade in your old vehicle, you only pay tax on the difference between the new vehicle’s price and your trade-in value. This is called the “net taxable amount.”
Example: You buy a $30,000 car and trade in your old car worth $10,000. You only pay tax on $20,000, not $30,000. That saves you $85.50 right there (8.55% × $10,000).
For detailed information on vehicle tax rules across different states, including how they compare to Scottsdale, check out our guide on State of Texas Vehicle Sales Tax, which explains how vehicle taxation varies by jurisdiction.
There’s also a vehicle license tax in Arizona (separate from sales tax), which is based on the vehicle’s value. This is a one-time tax you pay when you register your vehicle. The rate decreases over time—a brand-new car pays more than a 10-year-old car.
One strategy savvy Scottsdale buyers use: timing. If you’re buying a vehicle near the end of the year, consider waiting until January if possible. Some dealers offer year-end sales that can reduce the purchase price, which directly reduces your sales tax bill.
Smart Strategies to Minimize Your Sales Tax
You can’t avoid sales tax entirely (it’s not legal to try), but you can be strategic about how and where you spend money. Here are real tactics that Scottsdale residents use to keep more money in their pockets.
1. Buy Groceries Strategically
Since unprepared groceries aren’t taxed, buying raw ingredients instead of prepared foods saves you money twice: you avoid the 8.55% tax, and you typically spend less overall. Yes, it takes more time to cook, but if you’re buying prepared meals regularly, you’re paying a premium both in price and tax.
2. Use Online Shopping Wisely
Here’s the nuance: if you order from an out-of-state retailer that doesn’t have a physical presence in Arizona, you might avoid Arizona sales tax. However—and this is important—many online retailers now collect sales tax anyway, and some states require you to pay use tax (which is essentially the same as sales tax) on purchases made out of state. The rules are complex and constantly changing. For the most current information, check Investopedia’s guide to sales tax, which breaks down how online sales tax works.
3. Buy Tax-Exempt Items When Possible
If you need medical equipment or supplies, buy them tax-free by providing proper documentation. Same with nonprofit purchases. These exemptions exist for a reason—use them.
4. Bundle Large Purchases
If you’re planning multiple furniture or appliance purchases, consider buying them all at once. Some retailers offer discounts on bulk purchases, which can offset the tax you’re paying. Plus, you save time and hassle.
5. Track Your Receipts for Deductions
While you can’t deduct sales tax from your federal income tax anymore (that deduction was eliminated in 2017), some people still track sales tax for state tax purposes. It’s worth consulting with a tax professional if you have significant purchases. For more information on maximizing your tax situation, see our guide on Smart Savings: How Much of Your Paycheck Should You Stash.
How Scottsdale Compares to Other Arizona Cities
Scottsdale’s 8.55% Scottsdale sales tax rate is high by Arizona standards, but how does it stack up against other major cities in the state?
Phoenix: 8.65% (slightly higher than Scottsdale)
Tempe: 8.35% (slightly lower)
Mesa: 8.15% (noticeably lower)
Chandler: 8.25% (lower than Scottsdale)
The differences might seem small, but they matter. If you’re buying a $5,000 appliance, the difference between 8.15% and 8.55% is $20. Over a year of purchases, that adds up to hundreds of dollars.
Interestingly, Scottsdale’s higher rate reflects the city’s investment in quality services and infrastructure. Residents generally accept the higher tax in exchange for excellent schools, parks, police, and fire services. But that doesn’t mean you shouldn’t be aware of it when making purchasing decisions.
If you live near the border of another city with a lower rate, it might be worth the drive for major purchases. Some Scottsdale residents strategically buy large items in Mesa or Chandler to save on tax. Is it worth the gas? That depends on the purchase size, but for items over $1,000, it can definitely pencil out.
For comparison with other states and cities, check out our guides on San Francisco Sales Tax and Sales Tax for Orange County California to see how Scottsdale’s rate compares nationally.
Frequently Asked Questions
Is Scottsdale sales tax the highest in Arizona?
– No, Phoenix is slightly higher at 8.65%, but Scottsdale at 8.55% is among the highest. Several other cities have lower rates. The difference is usually due to local city taxes, which vary based on how each city chooses to fund services.
Do I have to pay sales tax on groceries in Scottsdale?
– Only on prepared foods. Raw groceries you cook at home are not taxed. This is why buying a rotisserie chicken (prepared, taxed) versus a raw chicken (not taxed) makes a difference at checkout.
Can I get a refund if I overpaid sales tax?
– Generally, no. Sales tax is calculated and collected at the point of sale. If you believe you were charged incorrectly, you’d need to contact the retailer or the Arizona Department of Revenue. This is rare, but it does happen with certain exempt items.
Do I pay sales tax when I trade in my vehicle?
– You only pay tax on the net amount (purchase price minus trade-in value). This is one of the biggest ways to reduce your vehicle tax bill in Scottsdale.
Is there a way to avoid Scottsdale sales tax legally?
– Yes, by purchasing exempt items (medical supplies with documentation, nonprofit purchases, etc.) or by buying unprepared groceries instead of prepared foods. You can also strategically time large purchases or buy in lower-tax jurisdictions for major items. But you cannot legally avoid sales tax on taxable items purchased in Scottsdale.
What’s the difference between sales tax and use tax?
– Sales tax is collected when you buy something in Scottsdale. Use tax is what you’re supposed to pay on items you buy out of state but use in Arizona. In practice, most people don’t pay use tax, but technically, it’s owed. The rate is the same as the local sales tax rate.
How often does Scottsdale sales tax change?
– The state rate is set by the Arizona legislature and changes infrequently. Local city rates can change more often but still don’t change yearly. Check the Arizona Department of Revenue website for current rates if you’re planning a major purchase.
Can I deduct Scottsdale sales tax on my taxes?
– Not on your federal taxes (that deduction was eliminated in 2017). Some states allow a state-level deduction, but Arizona doesn’t. Consult a tax professional if you have questions about your specific situation.
