Home » Arizona LLC » Arizona Business Licenses and Permits

Last updated July 13, 2021

Arizona LLC
Business Licenses and Permits

How to form an LLC in Arizona
This Quick Start Guide is a brief overview of how to form an LLC in Arizona.

Detailed Lessons:

 

Arizona LLC Costs:
Arizona LLC formation: $50 (regular) or $85 (expedited)
Arizona LLC annual report: none

Need help?
Hire a reliable service to form your Arizona LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

★ Check out Northwest vs LegalZoom

Licenses and Permits

Before your LLC can do business in Arizona, you may need to get state, and city/county licenses and permits.

The licenses and permits depend on the nature of your business, and the city or county where it is located.

Types of licenses you may need in Arizona

Examples of permits/licenses your Arizona LLC may need include:

  • Seller/reseller permit
  • Building permit
  • Health permit
  • Signage permit
  • Home occupation permit
  • Zoning and land use permits
  • Withholding taxes (if you have employees)

Arizona Transaction Privilege Tax (TPT)

Quoted from the Arizona Department of Revenue:

“The Arizona transaction privilege tax (TPT) is commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Although TPT is usually passed on to the consumer, it is actually a tax on the vendor. TPT is applied to entities engaged in certain business classifications, including retail sales.

Types of business activities subject to TPT include, but are not limited to: retail sales, restaurants/bars, hotel/motel (transient lodging), commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured building, severance (mining, timbering), transportation, printing, publishing, utilities, communications, air/railroad, private cars/pipelines and use tax.

The Arizona Department of Revenue (ADOR) collects the tax for the counties and most cities, however, some of the cities license and collect their tax independently. Tax rates vary depending on the type of business activity, the city and the county.

If you are selling a product or engaging in a service subject to transaction privilege tax, you will most likely need to obtain the state transaction privilege tax (TPT) license from ADOR (commonly referred to as a sales tax, resale, wholesale, vendor or tax license) and a TPT or business/occupational license from the city or cities in which you are based and/or operate.

If you have questions about whether or not your business activity is subject to TPT, check with both ADOR and the licensing office(s) of the city or cities in which you will be based and/or operate.

Please note: There are some differences between the state and local authorities in the taxability of transactions. For instance, the state does not impose TPT on 1) renting, leasing, or licensing for use residential real property or 2) the sale of advertising. However, many cities do tax these activities. For questions regarding TPT, please call 1-(844)-698-9176.”

You can also find more information about the Transaction Privilege Tax (TPT) here: Department of Revenue: Transaction Privilege Tax.

Do it yourself in Arizona

Need Help? If you don’t want to make phone calls and determine the licensing requirements yourself, we recommend hiring IncFile.

Below are some helpful guides and resources.

Arizona Department of Revenue

The Department of Revenue has a helpful resource page for business licenses and permits: Arizona Department of Revenue: Business – Starting a new business

They also have a guide on taxes for Arizona businesses:
A Guide to Taxes for Arizona Businesses (Publication 622)

Arizona Commerce Authority

The Arizona Commerce Authority has a number of helpful pages:

Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.

2 comments on “Arizona Business Licenses and Permits”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. I see that advertising is listed as a business activity subject to TPT but then it also lists “advertising sales” as an exception. Could you please clarify?
    I am starting a business that will involve selling online advertising in Arizona and I’m trying to determine if this is subject to the Arizona TPT. I will be doing business from my house which is outside of any city boundaries.

    • Hi Jared, apologies for the confusion. Unfortunately we can’t advise on TPT in Arizona specific to your situation. Taxes vary so much from person to person and business to business. I wish we could though. I recommend giving our “knights of the roundtable” strategy a try and phoning a few accountants who are more familiar with TPT requirements. I’m curious to hear what you come up with though, so feel free to keep us posted.

Leave a comment or question

Comments are temporarily disabled.