Self-employed in Scottsdale, AZ: taxes and retirement for 2026

Guides for Scottsdale

Scottsdale local rules

Local income tax

No city income tax in Scottsdale.

Scottsdale Transaction Privilege (Sales) Tax (TPT)

Since July 1, 2025 the city rate is 1.7% (8.0% combined with state and county) on taxable activities such as retail sales, restaurants and bars, rentals, construction contracting, advertising and transportation for hire. Short-term rentals and hotels also owe a 5% city transient lodging tax on stays of 30 days or less. Businesses with taxable activity need an Arizona Department of Revenue TPT license listing Scottsdale (SC). The city's list of taxable activities does not include professional or personal services.

City business license

Yes; the city says all businesses located in Scottsdale need a Business Registration License (service license: $12 application fee plus a $50 annual license fee, with a $25 penalty if you apply after starting). Home-based businesses must also complete the home business questionnaire on the application.

Also worth knowing

No city income tax: the city's tax page lists only transaction privilege (sales) and use taxes, and Tax Foundation's 2023 local income tax primer (secondary source, https://files.taxfoundation.org/20230222173518/Local-Income-Taxes-A-Primer-2023.pdf) does not list Arizona among the states whose localities levy income taxes. Taxable activity list and lodging tax: https://www.scottsdaleaz.gov/taxes/taxable-activities. Fee and questionnaire details: https://www.scottsdaleaz.gov/docs/default-source/scottsdaleaz/licenses/business-registration-license-application.pdf. We found no city ordinance for gig, app-based or freelance workers. Population is the U.S. Census Bureau Vintage 2025 estimate for July 1, 2025 (https://www2.census.gov/programs-surveys/popest/datasets/2020-2025/cities/totals/sub-est2025.csv).

Arizona rules that apply in Scottsdale

State income tax (2026)

Arizona has a flat 2.5% state income tax for 2026. The 2026 Form 140ES worksheet figures estimated tax at 2.5% of Arizona taxable income. Arizona also lets taxpayers elect to report small business income separately on Form 140-SBI.

State estimated tax

You must make 2026 Arizona estimated payments if your Arizona gross income was over $75,000 in 2025 and is over $75,000 in 2026 ($150,000 for both years if married filing jointly). Same dates as federal: April 15, June 15, and September 15, 2026, and January 15, 2027. Form 140ES.

Arizona transaction privilege tax (TPT)

TPT is a tax on the vendor for the privilege of doing business in Arizona. A sole proprietor in a taxable classification, such as retail sales, restaurants and bars, contracting, or rentals, needs a state TPT license ($12 per location) and often a city license too. The state rate is 5.6%, plus county and city rates (ADOR TPT rate table, October 2026).

Minimum wage (2026)

$15.15 an hour; tipped cash wage $12.15 an hour. The maximum tip credit is $3.00. The Industrial Commission of Arizona set the 2026 state rate at $15.15 (up from $14.70) effective January 1, 2026 (azica.gov). Flagstaff's 2026 minimum wage is $18.35, and all employees, including tipped workers, must be paid the full amount (flagstaff.az.gov/3520/Minimum-Wage). Tucson also has its own higher local minimum wage.

Declaration of Independent Business Status (A.R.S. 23-1601)

An optional signed declaration in which the contractor affirms they run their own business and are responsible for their own taxes and licenses. It must also show at least six of ten listed independence factors. When the parties act consistently with it, the declaration creates a rebuttable presumption that the worker is an independent contractor.

Qualified marketplace contractors (A.R.S. 23-1603)

Workers who find jobs through a qualified marketplace platform are independent contractors for all state and local law purposes, including unemployment and workers' compensation, if three conditions are met: they are paid for output, they have a written contract, and they keep control over their hours and their freedom to work elsewhere. Sealed freight and parcel delivery is excluded.

Questions

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Sources

• azdor.gov/sites/default/files/document/FORMS_INDIVIDUAL_2026_140ES_f.pdf
• azdor.gov/sites/default/files/document/FORMS_INDIVIDUAL_2025_140Booklet.pdf
• www.dol.gov/agencies/whd/state/minimum-wage/tipped
• azdor.gov/business/transaction-privilege-tax
• www.azleg.gov/ars/23/01601.htm
• www.azleg.gov/ars/23/01603.htm
• www.scottsdaleaz.gov/taxes
• www.scottsdaleaz.gov/licenses

Facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.