HB2290 • 2026

TPT; sourcing; business location; receipt

HB2290 - TPT; sourcing; business location; receipt

Housing Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Justin Olson
Last action: 2026-03-03
Official status: House passed
Effective date: Not listed

Plain English Breakdown

The exact effective date depends on when the general effective date is set by executive action or statute not included in this text.

HB2290: Rules for Where Online Sales and Rentals Are Taxed

This bill clarifies that server locations do not decide where an online order is received, defines what counts as a business location, and sets rules for taxing sales of items and rentals in Arizona.

What This Bill Does

States that the physical place of servers does not determine where an order is received for tax sourcing rules involving tangible personal property.
Defines 'business location' as a physical space like an office or room in a house where business happens.
Clarifies that orders are considered received when all necessary information arrives at the seller's business location, regardless of where servers are located.
Sets specific rules to decide if sales of items and rentals should be taxed based on the seller's or buyer's address.

Who It Names or Affects

Sellers who make retail sales of tangible personal property in Arizona
Businesses that lease or rent out physical goods
Owners involved in shared vehicle transactions

Terms To Know

Tangible Personal Property: Physical items that can be touched, moved, or sold.
Sourcing: The rule used to decide which location determines the tax rate for a sale.
Business Location: A physical space like an office or room where business activities take place.

Limits and Unknowns

The bill does not state the specific calendar date it becomes effective, only that it applies to tax periods starting after a certain point.
Definitions for shared vehicle terms refer to another law (section 28-9601) and are not listed in this text.

Bill History

2026-03-03 House
House passed
2026-03-03 House
House third read failed
2026-03-03 House
House committee of the whole
2026-02-24 House
House minority caucus
2026-02-24 House
House majority caucus
2026-02-23 House
House consent calendar
2026-01-21 House
House second read
2026-01-20 House
House Rules: C&P
2026-01-20 House
House Ways & Means: DP
2026-01-20 House
House first read

Official Summary Text

HB2290 - 572R - House Bill Summary

ARIZONA HOUSE OF REPRESENTATIVES

57th
Legislature, 2nd Regular Session

Majority Research Staff

House:
WM DP 5-3-0-1

HB
2290
: TPT; sourcing; business location; receipt

Sponsor:
Representative Olson, LD 10

House
Engrossed

Overview

Specifies
that the location of servers does not determine where an order is received for
purposes of sourcing certain transaction privilege tax (TPT) transactions
involving tangible personal property and defines
business location
.

History

Current law provides that retail sales of tangible personal
property be sourced to the seller's business location if the seller receives
the order at a business location in Arizona (
A.R.S. � 42-5040
).

Provisions

1.

Specifies
that the location of servers used to transmit the information necessary to
accept an order does not determine where an order is received
for purposes of sourcing certain
TPT transactions involving tangible personal property. (Sec. 1)

2.

Defines
business
location
. (Sec. 1)

3.

Makes
technical changes. (Sec. 1)

4.

Contains an
applicability clause. (Sec. 2)

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VP������������ HB 2290

3/3/2026��� Page 0 House Engrossed

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Current Bill Text

Read the full stored bill text

HB2290 - 572R - H Ver

House Engrossed

TPT; sourcing;
business location; receipt

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2290

AN
ACT

amending section 42-5040, Arizona Revised
Statutes; relating to transaction privilege tax.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 42-5040, Arizona Revised
Statutes, is amended to read:

START_STATUTE
42-5040.

Sourcing of certain transactions involving tangible personal
property; definitions

A. Except as provided in section 42-5075,
retail sales of tangible personal property shall be sourced as follows:

1. To the seller's business location if the seller
receives the order at a business location in this state.

2. Except as provided in section 42-5008.01,
to the purchaser's location in this state if the seller receives the order at a
business location outside this state or, if there is no delivery address, to
the purchaser's billing address.

B. A shared vehicle transaction shall be sourced as
follows:

1. To the permanent street address of the registered
shared vehicle owner if the shared vehicle is registered in this state.

2. To the street address in this state where the
shared vehicle owner resides while in this state if the shared vehicle is
registered in another state or country.

3. To the location of the shared vehicle at the car
sharing start time if the shared vehicle owner does not reside in this state
and the shared vehicle is registered in another state or country.

C. For the purposes of subsection A of this section,
an order is received when all of the information necessary to accept the order
has been received by or on behalf of the seller
at a business
location of the seller
, regardless of where the order is accepted or
approved. The place of business or residence of the purchaser
or the location of servers used to transmit the INFORMATION necessary
to accept the order to a business location
does not determine where the
order is received.

D. The gross receipts from leasing or renting
tangible personal property shall be sourced as follows:

1. To the lessor's business location if the lessor
has a business location in this state.

2. To the lessee's address if the lessor does not
have a business location in this state or, if there is no lessee's address, to
the lessee's billing address. The gross receipts are taxable when
the property is shipped, delivered or otherwise brought into this state for use
in this state.

E. For the purposes of this section:

1. "Business location"
means a physical space that a person can occupy, such as an office or a room in
a house, and in which business is carried on.

1.
2.
"Car
sharing start time" has the same meaning prescribed in section 28-9601.

2.
3.
"Lessee's
address" means the residential address of an individual lessee and the
primary business
location
address of any other lessee.

3.
4.
"Lessor's
business location" means the business
location
address
that appears on the lessor's transaction privilege tax license.

4.
5.
"Shared
vehicle" has the same meaning prescribed in section 28-9601.

5.
6.
"Shared
vehicle owner" has the same meaning prescribed in section 28-9601.

6.
7.
"Shared
vehicle transaction" has the same meaning prescribed in section 28-9601.

END_STATUTE

Sec. 2.
Applicability

This act applies to taxable periods
beginning on or after the first day of the month following the general
effective date.