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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.
Arizona LLC Costs:
Arizona LLC formation: $50 (regular) or $85 (expedited)
Arizona LLC annual report: none
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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
Department of Revenue Licensing Guide
Transaction Privilege Tax (TPT)
844-698-9176 (TPT help line)
Requirements for different cities and counties
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)