Selling on Etsy, eBay, Amazon, or at Craft Fairs in Arizona: TPT, Marketplace Rules, and 1099-K

TL;DR

• Clearing out your own closet isn't a business. ADOR treats an isolated, one-off sale, like a garage sale, as a "casual sale" that doesn't need a TPT license. Selling used items regularly, for example at local flea markets, is a business. (ADOR, Conducting Taxable Retail Activity; A.R.S. § 42-5001.)
• If you sell only through marketplace facilitators, ADOR says you don't need a TPT license. A marketplace facilitator is a platform that lists your items and collects payment from the buyer for you. The facilitator collects and pays Arizona TPT on those sales. Keep the platform's exemption certificate (ADOR Form 5020) or similar written notice. (ADOR, Remote Sellers and Marketplace Facilitators FAQ; ADOR Form 5020.)
• You likely need your own license once you sell anywhere else: your own website, craft fairs, swap meets, farmers markets, or local cash and app-payment sales. The state fee is $12, plus city fees. Event-only vendors pay the $12 state fee once no matter how many events, but may owe a city fee for each city where an event is held. (ADOR, TPT License.)
• The $100,000 "remote seller" threshold isn't for Arizona residents. It applies to sellers located outside Arizona. ADOR says any retailer physically located in Arizona is an Arizona retailer, with or without a storefront. (ADOR, Arizona-Based Sellers.)
• Buying inventory tax-free uses the Arizona Resale Certificate (Form 5000A), which asks for your TPT license number. Using it for things you keep is subject to use tax, and willful misuse is a felony. (ADOR Form 5000A.)
• Form 1099-K: payment apps and online marketplaces generally have to send one only if your payments are over $20,000 and over 200 transactions in a year. Card payments you take directly are reported at any amount. All income is reportable either way. (IRS.)
• Selling personal items at a loss isn't taxable, but you may still need to show it on your return if you get a 1099-K. Profits from reselling are taxable, and self-employment tax applies once net earnings reach $400. (IRS.)

Who this guide is for

You might sell vintage finds on eBay, handmade jewelry on Etsy, thrifted clothes on a resale app, or furniture through Facebook Marketplace. Or you might be booking a table at a holiday craft fair or a swap meet. This guide explains when Arizona's TPT applies to you, when the platform handles it, what changes at in-person events, and how federal 1099-K reporting works after the 2025 law change.

It doesn't promise income, and we don't publish earnings estimates. What you make depends on what you buy or make, your prices, fees, and your time, and we can't verify typical figures on an official source.

If you sell food you made at home, the Arizona Cottage Food Law guide covers the health rules. This page is about tax and licensing for goods.

First: are you selling stuff, or running a business?

Arizona TPT. TPT is a tax on the privilege of doing business. Arizona law defines "business" as activity engaged in "with the object of gain, benefit or advantage," and says it doesn't include casual activities or sales. (A.R.S. § 42-5001(1).) ADOR explains it this way:

• A casual sale is "an isolated or one-off transaction" where "the volume and frequency do not indicate the seller regularly sells such property." ADOR's example is a garage sale.
• But "selling used items regularly at local flea markets would be considered a business and subject to tax because the sale is repeated and continuous and not isolated in nature."
• ADOR's answer to "Do I need a TPT license if I make a casual sale?" is no.

(ADOR, Conducting Taxable Retail Activity; A.A.C. R15-5-101(2).)

There's no dollar or item-count cutoff in that rule. Buying things to resell, or making things to sell on an ongoing basis, points toward a business. ADOR's publication for event promoters also notes that "the sales of crafts may be taxable even if the seller considers the sales a 'hobby'." (ADOR Pub 550.) If you're unsure which side of the line you're on, ask ADOR.

Federal income tax draws a different line. Selling your own personal items for less than you paid creates no tax, while profits on personal items and income from reselling or crafting are taxable. See the federal section below.

Selling only on Etsy, eBay, Amazon, and similar platforms

Arizona law defines a marketplace facilitator as a person that lists or advertises a marketplace seller's items for sale and, directly or through third parties, collects payment from the buyer and sends it to the seller. A plain payment processor (a card processor that only handles the transaction) isn't one. (A.R.S. § 42-5001(9).)

When a facilitator handles the sale, ADOR's guidance for sellers is clear:

"No, you are not required to obtain a transaction privilege tax (TPT) license if you only sell through a marketplace facilitator."

ADOR also says this applies "regardless of its physical presence with Arizona," so it covers Arizona residents, not just out-of-state sellers. (ADOR, Remote Sellers and Marketplace Facilitators FAQ; ADOR, Licensing and Renewal Requirements.)

What to do:

1. Get the paperwork. Your platform "should provide you with documentation that it will be collecting and remitting the TPT on your behalf." That can be ADOR's Form 5020 exemption certificate, an email, or another specific notice. Keep it with your records. (ADOR FAQ; Form 5020.)
2. Don't assume. We don't list which platforms collect Arizona TPT, because that isn't on an ADOR page we can cite. Look in your platform's seller tax settings or help center, and ask for its Form 5020 or written notice if you can't find it.
3. Already licensed? ADOR says a marketplace-only seller may cancel after getting the exemption certificate or other documentation, or may keep the license. If you keep it, you must file returns, and you deduct the facilitator's sales using deduction code 804. (ADOR FAQ.)

Why the paperwork matters: ADOR says that if a facilitator didn't give you an exemption certificate or proper documentation, a seller who otherwise has to file must include those sales in gross receipts and pay TPT on them. "A deduction may only be taken if you have the proper exemption certificate or other appropriate documentation." (ADOR FAQ.)

When you still need your own TPT license

The marketplace exemption covers only sales the facilitator handles. If you also sell other ways, those sales are yours to license and report.

(A.R.S. § 42-5001; ADOR, Remote Sellers and Marketplace Facilitators FAQ; ADOR, Conducting Taxable Retail Activity; ADOR, Vendors.)

About local pickup deals. Under the statute, a platform is a marketplace facilitator for a sale when it collects the buyer's payment. If a buyer finds your listing online but pays you in person, by cash or a payment app, the platform didn't collect that payment. Plan on treating those as your own sales. How a specific platform's checkout or shipping option works is something to confirm in its seller terms.

If you mix channels, ADOR says to report all of your sales, including marketplace sales, under the retail business code 017, and then deduct the marketplace facilitator's sales with deduction code 804. (ADOR FAQ, Arizona Retailer.)

Getting the license. You apply through AZTaxes with the Arizona Joint Tax Application. The state fee is $12 per location, plus any city fees, which ADOR collects for most cities. If you run the business from home, ADOR says to use your home address as the business address. Step-by-step instructions are in our Arizona TPT License for Side Hustles guide. (ADOR, TPT License.)

Craft fairs, swap meets, and markets

In-person events are where most Arizona sellers who use a platform end up needing their own license.

• Event-only sellers still need a license. ADOR: "Even vendors who only do business for special events in Arizona are required to have a license." The $12 state fee stays the same no matter how many events you do. However, "a separate city license fee is required for each city unless a vendor is currently licensed for the city in which an event will be held." (ADOR, TPT License.)
• Ask the promoter about a central cash register. A promoter may get a TPT license and collect and pay tax for vendors, but only "as long as a central cash register system is deployed." Vendors "conducting sales independently of the central cash register system will be required to be licensed and to collect and remit tax independently." (ADOR, Vendors.)
• Expect the organizer to ask for your details. State law requires the operator of a swap meet, flea market, fair, festival, or other transient selling event to keep a current list of vendors with each vendor's name, business name, and business address, and to provide it to ADOR on written notice. (A.R.S. § 42-1105(G); ADOR, Special Events.)
• Display-only booths don't need a TPT license, ADOR says. Neither do bona fide 501(c)(3) nonprofits or nonprofit fundraising food and drink sales that ADOR describes. (ADOR, Vendors.)
• Food at events can fall under different TPT classifications, such as restaurants and bars, and has its own health rules. See Arizona Cottage Food Law and Arizona Food Truck Permits and Licenses.
• Cities may require more. ADOR's promoter publication says "many cities require a business permit to conduct business," and to contact the city. (ADOR Pub 550.) Our Arizona Business License for Side Hustles guide covers Phoenix and Tucson.

Arizona's busy market season runs through the cooler months. Get licensed before your first booking. See Snowbird Season Side Hustles for seasonal ideas.

Buying inventory for resale: the resale certificate

When you buy goods you'll resell, you can give the seller an Arizona Resale Certificate (Form 5000A) so you don't pay tax on that purchase. TPT is then collected when you sell to the final customer. (ADOR, Arizona Resale Certificate; ADOR, Conducting Taxable Retail Activity.)

What the form itself says:

• It's for buying "tangible personal property for resale in the ordinary course of business," and it asks for your TPT or other state's sales tax license number.
• You fill it out and give it to the vendor. It isn't sent to ADOR.
• If you later use or consume the item yourself instead of selling it, the purchase is subject to Arizona use tax.
• "Willful misuse of this Certificate will subject the purchaser to criminal penalties of a felony."

(ADOR Form 5000A.)

So a certificate isn't for thrift-store or garage-sale buys you pay for normally. It's for business purchases from vendors who will accept one. A marketplace-only seller without a TPT license doesn't have a license number to put on it. Whether getting a license just to buy for resale makes sense for you is a question for ADOR or a tax professional.

ADOR also warns that if you mistakenly pay tax on a resale item when you buy it, TPT must still be collected when you sell it to the final customer. (ADOR, Conducting Taxable Retail Activity.)

If you're licensed: rates, filing, and city tax

Rates. TPT rates combine state, county, and city rates and depend on where the sale is sourced. We don't list rates because they vary and change. Use ADOR's Tax Rate Table and rate lookup tools. (ADOR, TPT License; Tax Rate Table.)

City privilege tax. For most Arizona cities, the city's privilege tax is licensed and reported through ADOR on the same license and return. ADOR also notes that "Arizona cities generally require anyone selling at retail within their jurisdiction to obtain a city business license and a city privilege tax license." That's why event vendors may owe a city fee in each city where they sell. (ADOR, TPT License; ADOR, Licensing and Renewal Requirements.)

How often you file. State law sets the default schedule by your estimated annual tax liability, and ADOR assigns your frequency:

(A.R.S. § 42-5014(A)–(B).) Returns filed electronically are delinquent if ADOR doesn't receive them by the last business day of that month. Taxpayers with an annual liability of $500 or more must file electronically unless ADOR grants a waiver. (A.R.S. § 42-5014(A), (B), (P), (Q).) ADOR may require a seller whose business is "of a transient character" (a seller not regularly engaged in selling in Arizona who sells from stands, booths, or concessions at fairs or similar events for 30 days or less) to file on a daily, weekly, or per-transaction basis. (A.R.S. § 42-5014(C).) Your assigned schedule controls, so confirm it in AZTaxes.

Track sales by location. If you sell at events in several cities, log each sale's date, city, amount, and tax collected. TPT is reported by location.

Closing up. If you stop selling, cancel the license through ADOR instead of letting it sit. See the TPT guide.

What about the $100,000 threshold?

You may have read that sellers don't owe Arizona TPT until they pass $100,000 in sales. That threshold is real, but it's for remote sellers, meaning sellers located outside Arizona shipping into the state. (ADOR, Licensing and Renewal Requirements; ADOR, Arizona-Based Sellers.)

ADOR says "any retailer physically located in Arizona is considered an Arizona-based retailer or a local Arizona retailer. This is true regardless of whether the retailer has a physical store front or not." An Arizona seller with a website and no storefront "is not a remote seller in Arizona." (ADOR, Arizona-Based Sellers; ADOR FAQ.) If you live and sell here, the threshold doesn't excuse your own direct sales.

Selling to other states: ADOR notes that an Arizona business selling online "may be considered a remote seller in other states." Each state sets its own thresholds, so check with that state if your direct sales there grow. (ADOR FAQ.)

Federal taxes: Form 1099-K and what to report

The 1099-K threshold went back to $20,000. The One, Big, Beautiful Bill retroactively reinstated the reporting threshold in effect before the American Rescue Plan Act of 2021. Payment apps and online marketplaces (third party settlement organizations) aren't required to file Form 1099-K unless your payments for goods or services are over $20,000 and over 200 transactions. The IRS lists craft or maker marketplaces, auction sites, and online community marketplaces among the platforms this covers. (IRS, IR-2025-107, Oct. 23, 2025; IRS, Understanding your Form 1099-K.)

Three things the IRS stresses:

• You may get one anyway. Platforms may send a 1099-K for lower amounts. If customers pay you directly by credit, debit, or gift card, your card processor reports it "no matter how many payments you got or how much they were for." (IRS.)
• The form doesn't decide what's taxable. The gross amount isn't adjusted for fees, refunds, shipping, or discounts, and you can account for those from your records. "Just because a payment is reported on Form 1099-K doesn't mean it's taxable." (IRS, What to do with Form 1099-K.)
• No form doesn't mean no tax. "Whether or not you receive a Form 1099-K, you must still report any income on your tax return," including "personal items such as clothing or furniture sold at a gain." (IRS.)

Personal items vs. resale and crafts:

(IRS, What to do with Form 1099-K; IRS, Instructions for Schedule C; IRS, Know the difference between a hobby and a business.)

Hobby or business? The IRS lists factors such as whether you run the activity like a business, keep complete and accurate books, change methods to improve profitability, advertise, and have made or expect to make a profit. (IRS FS-2022-38.)

Self-employment tax generally applies once your net earnings from self-employment are $400 or more. (IRS.) There's no withholding on that income, so many sellers set money aside for estimated taxes. Our Arizona side hustle tax set-aside calculator can help you plan, and Side Hustle Taxes in Arizona covers Arizona income tax and quarterly payments.

Keeping records

The IRS says to keep documents that show the amounts and sources of your gross receipts, such as deposit records, receipt books, and invoices, plus records of purchases, meaning "the items you buy and resell to customers." (IRS, What kind of records should I keep.) For a selling side hustle, that usually means:

1. Inventory cost: receipts or notes for what you paid for each item or batch of supplies. For personal items you sell, a note of roughly what you paid helps show a loss.
2. Platform reports: download each marketplace's annual sales and fee reports, and keep any 1099-K.
3. Facilitator paperwork: Form 5020 or the platform's written notice that it collects Arizona TPT.
4. Off-platform sales log: date, item, amount, how paid, city, and TPT collected, for events, local pickups, and your own website.
5. Resale certificates you gave vendors, and any you accepted from wholesale buyers.

A simple decision path

1. Just clearing out your own things now and then? That's generally a casual sale under TPT, and personal items sold at a loss aren't taxable income. Keep a rough record of what you paid.
2. Selling regularly, but only through platforms that collect payment and remit Arizona TPT? You don't need a TPT license, per ADOR. Get and keep the platform's Form 5020 or notice. Report your income for federal taxes.
3. Also selling at events, on your own site, or for direct payment? Get a TPT license through AZTaxes ($12 state fee plus city fees), collect and report tax on those sales, and deduct marketplace sales with code 804.
4. Selling from home? Check your city's home occupation rules, especially if buyers will pick up at your house.
5. Not sure? Call ADOR at (602) 255-3381, or try our Arizona side hustle license & permit checklist.

Frequently asked questions

Do I need a TPT license to sell on Etsy in Arizona? Not if you sell only through marketplace facilitators that collect payment and remit Arizona TPT for you. ADOR says marketplace-only sellers don't need a license, but you should keep the platform's exemption certificate (Form 5020) or written notice. If you also sell at craft fairs or on your own website, you need a license for those sales.

Do I need a TPT license to sell on eBay or Amazon? The same marketplace facilitator rule applies. Confirm that the platform collects Arizona TPT on your sales and keep its documentation.

Do I need a TPT license to sell on Facebook Marketplace? It depends on how you're paid and how often you sell. If the buyer pays you directly, by cash or a payment app, the platform didn't collect payment, so those are your own sales. Occasional sales of your own used things are generally casual sales that don't need a license. Regular reselling generally does.

Do I need a TPT license to sell at a craft fair or swap meet in Arizona? Usually yes, unless the promoter runs all sales through its own central cash register and handles the tax. The state fee is $12 no matter how many events you do, but a separate city fee may apply in each city where an event is held.

Is a garage sale taxable in Arizona? ADOR uses a garage sale as its example of a casual sale, which isn't taxable under the retail classification and doesn't need a TPT license. Selling used items regularly at flea markets is a business.

What is the 1099-K threshold now? Payment apps and online marketplaces generally must send Form 1099-K only if your payments are over $20,000 and over 200 transactions in the year, after the One, Big, Beautiful Bill reinstated the older threshold. You may still get one below that, and card payments you take directly are reported at any amount.

Do I have to pay taxes on things I sold on eBay if I lost money? Not on personal items sold for less than you paid. The IRS says a loss on a personal item creates no tax and can't be deducted. If you got a 1099-K for those sales, you can zero out the amount on Schedule 1 or report it on Form 8949. Items you bought to resell are different: that's business income.

Does the $100,000 threshold mean I don't owe Arizona tax? No, not if you're based in Arizona. That threshold is for remote sellers outside Arizona. ADOR treats any retailer physically located in Arizona as an Arizona retailer, with or without a storefront.