Waste Tire

Every business that makes retail sales of new motor vehicle tires must obtain a license to sell their products from the Arizona Department of Revenue (ADOR). The waste tire fee account is obtained at the same time as the transaction privilege tax license, using the Joint Tax Application (JT-1).  If your business already has a TPT license but does not yet have a waste tire fee account, you simply need to file a Form TR-1 and make a payment of the associated waste tire fees you have collected.

Businesses that make retail sales of new motor vehicle tires must pay the waste tire fee, including:

• retailers of new motor vehicle tires,
• retailers of new motor vehicles, 
• wholesalers that sell new motor vehicle tires to the state or a political subdivision of the state, and
• wholesalers that sell new motor vehicle tires to a private entity that does not resell the new tires (including wholesalers that sell to used car dealerships).

“Motor vehicle” means any automobile, motorcycle, truck, trailer, semitrailer, truck tractor and semitrailer combination, or other vehicle operated on the roads of this state, used to transport persons or property and propelled by power other than muscular power. A motor vehicle does not include traction engines, vehicles that run only on a track, bicycles or mopeds.

See Publication 560 for examples.

The fee for sales of new motor vehicle tires on and before March 31, 2025:
The waste tire fee was 2% of the retail price of the tire, up to a maximum of $2 per tire. The fee for new vehicles (where the price of the tires is not listed separately on the invoice) was $1 per tire.

The fee for sales of new motor vehicle tires effective April 1, 2025:
The waste tire fee is 2% of the retail price of the tire, up to a maximum of $4.66 per tire. The fee for new motor vehicle tires sold as part of the sale of a new motor vehicle with a gross weight of less than 10,000 pounds (where the price of the tires is not listed separately on the invoice) is $2.33 per tire. The fee for new motor vehicle tires sold as part of the sale of a new motor vehicle with a gross weight of 10,000 pounds or more (where the price of the tires is not listed separately on the invoice) is $4.66 per tire.

Going forward, the Arizona Department of Environmental Quality may update fees annually.
Beginning July 1, 2026, the fee amounts will be adjusted on an annual basis (see Arizona Revised Statutes § 44-1302(N) and Arizona Administrative Code (A.A.C.) R18-13-2202). 

Waste tire fees must be remitted to the Arizona Department of Revenue on a quarterly basis, using Form TR-1.

The return and payment are due on the 20th of the month following the end of each quarter - that is, April 20, July 20, October 20, and January 20.

• Identify the total retail sales of tires sold for less than $233 each. Multiply that amount by 2%.
• Identify the total retail sales of tires sold for $233 or more each. Multiply that amount by $4.66.
• Identify the total number of new tires sold with new motor vehicles with a gross weight of less than 10,000 pounds, (where the price of the tires is not listed separately on the invoice). Multiply that amount by $2.33.
• Identify the total number of new tires sold with new motor vehicles with a gross weight of 10,000 pounds or more, (where the price of the tires is not listed separately on the invoice). Multiply that amount by $4.66.
• Add the above amounts together, subtract the credit allowance, and the remaining amount is the total fees due.

In a transaction that includes a discount or promotional offer, the waste tire fee applies to the average sales price of each tire after applying the deduction or promotional offer.
Examples:

1. A vendor/manufacturer-funded promotional discount is offered if four tires are purchased (i.e., “buy 4 tires, save $100”). The original retail price of the tires is $150 per tire. The average retail price of the tires after applying the promotion is $125 each. The waste tire fee for each of the four tires is 2% of $125 per tire, or $2.50 per tire.
2. The retailer offers a promotion for “buy 3 tires for $600 and get 1 tire free.” The average retail sales price for the four tires is $150 each. The waste tire fee for each of the four tires is 2% of $150 per tire, or $3 per tire.

A retailer of new motor vehicle tires that is not a member of the tribe for which the reservation was established is required to register with ADOR and collect the waste tire fee on sales of new tires to non-Indians and non-members of the tribe for which the reservation was established. The sale of new motor vehicle tires to a registered member of the tribe for which the reservation was established is not subject to the waste tire fee.

A retailer of new motor vehicle tires that is a registered member of the tribe for which the reservation was established is not required to register with ADOR or to collect the waste tire fee.

A remote seller that meets Arizona’s economic nexus threshold and is required to pay transaction privilege tax on its sales into Arizona is required to pay the waste tire fee on its sales of new motor vehicle tires.

A marketplace facilitator that meets Arizona’s economic nexus threshold and is required to pay transaction privilege tax on its sales into Arizona is required to pay the waste tire fee on its sales of new motor vehicle tires.