Peoria, AZ Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Governing law
- Peoria City Code § 12-400 et seq.
- Enforcing agency
- City Tax Collector
- Advertising tax rate
- 1.8% of gross income (§ 12-405)
- Amusements tax rate
- 2.8% of gross income (§ 12-410)
- Contracting deduction
- 35% deduction, subcontractors exempt (§ 12-415)
- Criminal penalty
- Class One Misdemeanor (§ 12-580)
- Default presumption
- All gross income taxable unless disproved
Summary
Peoria taxes business activity through a classification-based privilege (sales) tax under City Code Chapter 12. Sec. 12-400 levies a separate tax on gross income for each business classification, from construction contracting at 1.8% to amusements at 2.8%, collected by the City Tax Collector, with every dollar of gross income presumed taxable until the taxpayer proves otherwise.
(a) There are hereby levied and imposed, subject to all other provisions of this Chapter, the following Privilege Taxes for the purpose of raising revenue to be used in defraying the necessary expenses of the City, such taxes to be collected by the Tax Collector: (1) A Privilege Tax upon persons on account of their business activities, to the extent provided elsewhere in this Article, to be measured by the gross income of persons, whether derived from residents of the City or not, or whether derived from within the City or from without. ... (c) Presumption. For the purpose of proper administration of this Chapter and to prevent evasion of the taxes imposed by this Chapter, it shall be presumed that all gross income is subject to the tax until the contrary is established by the taxpayer. (d) Limitation of exemptions, deductions, and credits allowed against the measure of taxes imposed by this Chapter. All exemptions, deductions, and credits set forth in this Chapter shall be limited to the specific activity or transaction described and not extended to include any other activity or transaction subject to the tax.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: 2026 S-9: Supplement contains: LLocal legislation current through Ord. 2026-15, passed 6-16-26).
Full Breakdown
Peoria does not impose one flat business tax; it imposes a Privilege Tax by classification under Sec. 12-400, with the rate and rules set separately for each business activity later in Chapter 12, Article IV. Advertising (Sec. 8% of gross income from billboards, direct mail, radio and television, with statutory carve-outs for multistate franchise advertising and presidential campaign ads. Amusements (Sec. 8% of gross income, with deductions for hotel amusement income already taxed under Sec. 12-444 and Arizona State Fair ride revenue. Construction Contracting: Prime Contractors (Sec.
8%, but a prime contractor may take a 35% deduction against taxable gross income, subcontractor income is fully exempt, and direct architectural or engineering costs incorporated into a contract since July 1, 2008 are excluded. Sec. 12-400(b) makes every classification's tax additional to all other City licenses, fees and taxes, and Sec. 12-400(c) creates a presumption that all gross income is subject to tax until the taxpayer proves otherwise. Sec. 12-400(d) limits any exemption, deduction or credit strictly to the specific activity or transaction it names; it cannot be stretched to cover other taxable activity. A separate occupancy privilege tax on real property rentals runs under Sec. 12-440. The Tax Collector administers filing, recordkeeping and audit under this Chapter.
Violations & Fines
Sec. 12-580 makes it a Class One Misdemeanor to knowingly or willfully fail to obtain a Privilege License, fail to file a required return, fail to remit collected tax by its delinquency date, or file a false or fraudulent return or exemption claim. A person who knowingly swears to a false statement on a return can additionally be charged with perjury and punished as provided by law. Sec. 12-370 separately makes anyone who wrongly claims an exemption liable for the underlying tax plus interest and penalties as if delinquent.
Frequently Asked Questions
How does Peoria decide which tax rate a business pays?
Does a subcontractor pay Peoria's contracting privilege tax?
What happens if a business never gets a Peoria Privilege License?
Who has to prove a business's income isn't taxable in Peoria?
Sources & Official References
Other rules in Peoria
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