Arizona Business Guide

    How to Start a Business in Arizona (AZ) — 2026 Guide

    Everything you need to register, license, and launch your business in Arizona. Step-by-step guide with current fees, tax rates, and compliance requirements.

    Starting a service business in Arizona comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in AZ costs $50, ongoing reporting is no annual report for llcs, sales tax is 5.6% state + local (TPT), and personal income tax runs 2.5% flat. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new Arizona owners off guard.

    Most new registrations come out of Phoenix, Tucson, Mesa and the rest of Arizona — local business licenses are issued at the city or county level, so check yours after the state filing clears.

    What it costs to start a business in Arizona

    ItemAZ cost
    LLC / entity filing (one-time)$50
    Annual / periodic reportNo annual report for LLCs
    Federal EIN (IRS)Free
    Sales tax registrationTypically free
    Trade / professional licenseVaries by trade
    Local business licenseSet by city / county

    Fees change — confirm current amounts with the AZ Secretary of State and the Arizona Department of Revenue.

    Realistic timeline for a Arizona launch

    Week 1

    Choose your structure and file with the AZ Secretary of State ($50). Get your free EIN from the IRS the same day.

    Week 2

    Register for Arizona sales tax with the Arizona Department of Revenue, then open a business bank account under the registered name.

    Weeks 2–4

    Apply for your trade license and local business license. This is usually the longest step: TPT license (free); Professional/trade license.

    Weeks 3–4

    Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.

    Arizona Business Quick Facts

    LLC Filing Fee

    $50

    Annual Report

    No annual report for LLCs

    Sales Tax

    5.6% state + local (TPT)

    Income Tax

    2.5% flat

    Steps to Start a Business in Arizona

    1

    Choose a business structure

    2

    File with Arizona Corporation Commission ($50 for LLC)

    3

    Publish Articles of Organization in a local newspaper

    4

    Get federal EIN

    5

    Register for Arizona Transaction Privilege Tax (TPT)

    6

    Get local business licenses

    7

    Open a business bank account

    Required Licenses & Permits

    TPT license (free)
    Professional/trade license
    City business license

    Arizona Business Tips

    Arizona uses Transaction Privilege Tax (TPT) instead of traditional sales tax

    LLCs must publish Articles of Organization in an approved newspaper

    No annual report required for LLCs — one of the easiest states

    Official Resources

    Frequently Asked Questions

    Why is Arizona good for small businesses?

    Low filing fees ($50 LLC), flat 2.5% income tax, and no annual report for LLCs.

    What is TPT?

    Transaction Privilege Tax — Arizona's version of sales tax, charged to the seller.

    How long does it take to start a business in Arizona?

    Online LLC filings with the AZ Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.

    Do I need an LLC to start a service business in Arizona?

    No — you can operate as a sole proprietor in Arizona and still invoice customers legally. An LLC ($50 to file, no annual report for llcs) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.

    Do I have to collect sales tax in Arizona?

    Arizona sales tax is 5.6% state + local (TPT). Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the Arizona Department of Revenue before you start collecting.

    How do I get paid once my Arizona business is registered?

    Open a business bank account under the registered name, then invoice from a tool that applies AZ tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.

    Invoicing guides by trade in Arizona

    Cities in Arizona

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