Arizona Business Licenses and Permits

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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 secure 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.”

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.

Department of Revenue Licensing Guide
https://www.azdor.gov/Business/LicensingGuide.aspx

Transaction Privilege Tax (TPT)
https://www.azdor.gov/Business/TransactionPrivilegeTax.aspx
https://www.azdor.gov/TransactionPrivilegeTax(TPT).aspx
844-698-9176 (TPT help line)

Requirements for different cities and counties
http://www.azcommerce.com/small-business/quick-links/citytown-offices
http://www.azcommerce.com/small-business/quick-links/business-licensing

The Arizona Commerce Authority Small Business Services website above contain a list of AZ cities and counties, downloadable business license forms, and contact details (it’s very detailed and well-organized).

Taxes and Licenses Guide in Arizona
A Guide to Taxes for Arizona Businesses (Publication 622)

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
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.

2 Comments

  1. Jared January 23, 2018

    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.

    reply
    • Matt Horwitz January 24, 2018

      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.

      reply

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