In Arizona, most services are exempt from the Transaction Privilege Tax (TPT). However, there are exceptions where services are taxable, primarily those related to tangible personal property or specific industries:

1. Repair and Maintenance Services: Services involving tangible goods, such as appliance or vehicle repairs, are taxable. This requires businesses to collect TPT on these services.

2. Installation Services: If installation is part of a taxable sale, the service becomes taxable.

3. Professional Services: Legal, accounting, and consulting services may be taxable depending on the transaction specifics and local regulations.

4. Personal Services: Services like gym memberships, personal training, and similar services may incur TPT in some jurisdictions.

For service-based businesses, understanding the taxability of their offerings is crucial. Taxable services require proper collection and remittance of TPT, impacting pricing strategies and compliance efforts. Businesses must verify local regulations to determine if their services are subject to TPT, implement accurate tax collection practices, and maintain detailed records to support tax filings. Non-compliance can lead to penalties, making it essential for service-based businesses to stay informed and adapt to tax obligations accordingly.