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Arizona · 2026 · 38 steps · official links

How to start a business in Arizona

Every step to open an LLC in Arizona and get ready to hire, in order, with the official state page for each one. Agencies you'll deal with: Arizona Corporation Commission · Department of Revenue (ADOR) · Department of Economic Security (DES) · Industrial Commission of Arizona.

LLC filing fee
$50
State sales tax
5.6%
Seller's permit
$12 per location
Out-of-state sales threshold
$100,000
Last verified
October 27, 2026

This is the most common path: a new LLC, general business, paying W-2 employees and 1099 contractors. Adding a location, forming a corporation, or in a licensed industry? Customize it and check off steps as you go.

Customize this checklist

Popular Arizona business types:

Step 1

Set up the business with the state

Do this first. The state tax and payroll accounts ask for your registration details.

Get a federal EIN

Apply free on the IRS website and get the number immediately. You'll need it for the state tax registration, a business bank account, and payroll. Opening a new location? You already have one; the same EIN works in every state.

FederalFreeIRS: Get an EIN

Sign an operating agreement

This internal document sets out who owns what, how decisions get made, and what happens if an owner leaves. It isn't filed with the state, but banks often ask for it, and it helps protect your liability shield. Single-owner LLCs need one too.

Every state

Open a business bank account

Bring your EIN letter, filed formation documents, and operating agreement or bylaws. Keeping business and personal money separate is one of the main things that protects your personal assets.

Every state

Check industry licenses and permits

Many businesses need a license or permit before opening, separate from registering the company. Check three levels: the state licensing board for your field, your city or county, and any federal agency that regulates your industry.

  • Trades and construction: general contractors, electricians, plumbers, HVAC and roofers usually need a state or local license, and often a bond
  • Personal services: salons, barbers, nail and esthetics shops need a shop license plus licensed staff; massage and tattoo studios are licensed too
  • Professional services: accounting, engineering, architecture, law, real estate and insurance require state licenses for the people and sometimes the firm
  • Child care, elder care and home care need a state facility or agency license and background checks
  • Retail with restricted products: alcohol, tobacco and vape, cannabis, firearms (federal FFL), pawn and secondhand dealers
  • Auto, transport and logistics: auto dealers and repair shops, towing, movers, and trucks that need a USDOT number
  • Money and finance: lenders, mortgage brokers, debt collectors and money transmitters are licensed by the state, often through NMLS
  • Local permits for almost everyone: city business license or tax registration, zoning or home occupation permit, sign permit and fire inspection

Decide on S corp tax treatment (optional)

If you want S corp taxation, file IRS Form 2553. The deadline is tight: generally within 2 months and 15 days after the start of the tax year you want it to apply. See Business basics for when it makes sense.

Form your LLC with the state

File Articles of Organization (or the state's equivalent) online through Arizona Business Center (Arizona Corporation Commission).

Name a Arizona statutory agent

The statutory agent must sign a Statutory Agent Acceptance form, which has no filing fee.

AZ

Register a trade name (DBA) if you use a different name

Trade names are registered with the Arizona Secretary of State.

AZIf it applies

Know Arizona's formation rules

An optional $35 expedite fee is available on most filings. LLCs must publish a formation notice 3 times within 60 days of approval unless the statutory agent's address is in Maricopa or Pima County, where the Commission's online posting satisfies the rule.

AZ

Publish your LLC notice if outside Maricopa or Pima

If your statutory agent's address is outside Maricopa and Pima counties, publish the LLC formation notice in a local newspaper 3 times, starting within 60 days of approval. Expect to pay roughly $60 to $300.

Step 2

Register for state taxes

Register with Department of Revenue / DES

File one Arizona Joint Tax Application (JT-1/UC-001) with ADOR to register for transaction privilege tax (TPT), employer withholding, and unemployment insurance. You need a federal EIN first.

  • Employees complete Form A-4 (employees pick 0.5% to 3.5%; default is 2% if no form) for state withholding
  • Arizona charges transaction privilege tax (TPT) instead of a sales tax. The state TPT license costs $12 per location, and cities may require their own TPT or business license.

Check local taxes and business licenses

Many Arizona cities require a city TPT license or a business/occupational license for each city where you operate. Arizona has no city or county income tax.

AZ

Get city licenses as well as the state TPT license

The state TPT license is $12 per location. Each city where you have a location or operations may require its own TPT or business license.

Step 5

Collect sales tax

Applies if you sell products, or services this state taxes. Most medical care is exempt. See Business basics for sales tax.

Register to collect sales tax

Arizona calls it a Transaction Privilege Tax (TPT) License. Register with the Arizona Department of Revenue (ADOR) through AZTaxes.gov (Arizona Joint Tax Application, Form JT-1/UC-001) before you make your first taxable sale in Arizona. You'll collect tax from customers and send it to the state.

  • State rate: 5.6%
  • Local taxes: Counties and cities add their own transaction privilege tax, and combined rates reach about 11.2%. City taxes and city licenses are handled through the state (ADOR and AZTaxes.gov), and some cities tax items the state does not, like food for home use.
  • Renews every year by January 1; no state renewal fee, but many cities charge one.
  • Most services are not taxed unless they fall in a listed TPT business class, but SaaS is taxed as a rental of personal property.
AZ$12 per location for the state license, plus a separate fee for each city where you do business; remote sellers and marketplace facilitators pay $12 and city fees are waived.Arizona: Register for sales tax

Buy items you resell tax-free with a resale certificate

Give your supplier Form 5000A, Arizona Resale Certificate so you don't pay tax on inventory you'll resell. The buyer fills it out and gives it to the seller at the time of sale; it is not sent to ADOR and can cover one sale or a set period. Keep certificates your own customers give you, too.

Selling into Arizona from another state? Watch the threshold

Out-of-state sellers must register once sales into Arizona pass $100,000 (previous or current calendar year), even with no office here.

  • Counts gross sales into Arizona through any channel. The threshold was $200,000 in 2019 and $150,000 in 2020.
  • Marketplace facilitators with more than $100,000 in Arizona sales must collect TPT for third-party sellers, and sellers who sell only through them do not need an Arizona license.

Note this Arizona sales tax rule

TPT is legally a tax on the seller for the privilege of doing business, though sellers usually pass it on to customers.

AZ
Step 6

Before your first payroll

Applies once you pay W-2 employees who work in this state.

Complete Form I-9 and W-4 for each hire

Form I-9 is never mailed to the government. You keep it in your own files and show it only if ICE or the Department of Labor asks for an inspection.

  • The employee completes Section 1 by their first day of work
  • You review their original documents and complete Section 2 within 3 business days of the start date
  • Keep it for 3 years after the hire date or 1 year after employment ends, whichever is later
  • Store I-9s together, separate from personnel files, so an inspection doesn't expose other records
  • Remote hire? Have an authorized representative check documents in person, or, if you use E-Verify, use the DHS remote video inspection option
  • Also collect a federal W-4 for withholding

Post federal workplace notices

Federal posters (minimum wage, EEO, FMLA if you have 50+ employees, and others) go alongside the state ones.

Register for unemployment insurance with Department of Economic Security (DES)

Register once you pay wages to employees working in Arizona. Reports and payments are usually quarterly.

  • 2026 new employer rate: 2%
  • Taxable wage base: $8,000
  • File quarterly wage reports and pay through the DES online Tax and Wage System. 2026 experience rates run 0.03% to 8.36%.

Buy workers' compensation insurance

Required at 1 or more employees. Workers' comp coverage is mandatory and the employer pays the full premium. The Industrial Commission of Arizona administers the law.

Report each new hire

Report rehires after a break of 60 or more consecutive days. Private employers may report contractors but are not required to.

Check the state E-Verify requirement

All Arizona employers must use E-Verify for every new hire (required since January 1, 2008). Businesses that fail can lose state licenses.

Follow Arizona pay timing rules

Arizona's wage payment rules:

  • Pay frequency: At least twice a month, with paydays no more than 16 days apart.
  • Final pay: Fired: within 7 working days or by the end of the next regular pay period, whichever is sooner. Quit: by the next regular payday.
  • Overtime: Follows federal law: 1.5x over 40 hours a week. No daily overtime.
  • Keep payroll records such as check stubs for 4 years. Payroll card users must get an earnings and deductions record each deposit.

Pay at least Arizona minimum wage

$15.15 an hour.

  • Tipped employees: $12.15 (up to $3.00 tip credit)
  • Local rates: Flagstaff: $18.35 in 2026, with no tip credit. Tucson: $15.45 in 2026 for work of 5 or more hours per pay cycle in city limits.
  • Coming up: Statewide $15.65 on Jan 1, 2027. Flagstaff $19.00 and Tucson $16.00 in 2027.

Set up required sick leave

All employees (full-time, part-time, temporary) earn 1 hour of paid sick time per 30 hours worked. Employers with fewer than 15 employees may cap at 24 hours a year; 15 or more may cap at 40 hours.

  • Accrual starts on the hire date
  • Employers may delay use until day 90 of employment
  • Unused time carries over, or the employer pays it out at year end
  • Must be usable in increments of 1 hour or less

Retirement plan: no state mandate

Arizona has no state auto-IRA retirement mandate for private employers.

AZIf it applies

Adopt a harassment policy (training recommended)

Arizona doesn't require harassment training for private employers. A written policy and a yearly refresher are still best practice.

AZIf it applies

Post Arizona workplace notices

Display the state's required labor law posters where employees can see them, along with the federal posters. Workers' comp notices come from your carrier.

AZFree

Enroll in E-Verify before your first hire

Arizona requires every employer to verify new hires through federal E-Verify. Enrollment is free through the Department of Homeland Security.

Check city minimum wages in Flagstaff and Tucson

Flagstaff and Tucson set higher minimum wages than the state. Flagstaff allows no tip credit.

Step 7

Paying 1099 contractors

Collect a W-9 before the first payment

The W-9 gives you the contractor's legal name and tax ID for their 1099. Check the classification first: if you control how and when they work, they may legally be an employee.

Send Form 1099-NEC to contractors

File with the IRS and send the contractor a copy by January 31. For payments made in 2026 and later, the reporting threshold is $2,000 per contractor per year (it was $600 before).

FederalDue Jan 31
Step 8

Stay in good standing

Recurring deadlines. Put these on your calendar now.

Skip the FinCEN BOI report (U.S. companies are exempt)

FinCEN's final rule, effective August 14, 2026, permanently exempts companies formed in the U.S. from beneficial ownership reporting. Ignore letters or emails demanding a BOI filing fee; they're a common scam. Only companies formed outside the U.S. still file.

File the Annual Report (corporations only)

Keeps your business in good standing with the state. Missing it can lead to penalties or dissolution.

AZEvery year by the corporation's formation anniversary date.$45 for for-profit corporations; LLCs file no annual reportArizona: Annual report

Know your state business taxes

No franchise tax. Arizona LLCs have no state annual report or annual fee.

AZ

File quarterly unemployment reports and withholding returns

File unemployment wage reports each quarter and state withholding returns on the schedule you're assigned (if the state has income tax), plus the annual W-2 reconciliation.

AZQuarterly

File sales tax returns on time

Annual if yearly tax is under $2,000, quarterly for $2,000 to $8,000, and monthly over $8,000; due the 20th of the next month, with e-filers timely through the last business day. File a zero return if you had no sales; skipping it can bring penalties.

AZ

Deadline calendar

Recurring dates for Arizona and federal filings. A payroll service handles most payroll lines, but you should know they're happening.

WhenWhatFiled with
Jan 1Minimum wage increases ($15.65 in 2027)Arizona
Jan 31, Apr 30, Jul 31, Oct 31Quarterly DES unemployment insurance wage report and payment dueArizona
Formation anniversaryCorporation annual report due ($45); LLCs exemptArizona
Jan 1Annual TPT license renewalArizona
Assigned scheduleSales tax return (file a zero return if no sales)Arizona
Jan 31W-2s to employees and SSA (with W-3); Form 940; 4th-quarter Form 941IRS / SSA
Jan 311099-NEC to contractors and IRSIRS
15th monthlyFederal payroll tax deposit (monthly depositors)IRS
Apr 30 · Jul 31 · Oct 31Form 941 for the quarterIRS
Jul 31Form 5500 or 5500-SF, if you sponsor a 401(k) (Oct 15 with Form 5558 extension)DOL (EFAST2)

Last verified: October 27, 2026

Common questions

How much does it cost to form an LLC in Arizona?

The Arizona state filing fee for an LLC is $50. That's the fee to form your LLC with the state. Expect other costs too, such as a registered agent service if you use one, licenses, and annual filings. See the checklist above for each step.

Do I need a seller's permit in Arizona?

You need to register to collect sales tax in Arizona if you sell taxable products or services there. The state rate is 5.6%, and local taxes may add to it. Registration cost: $12 per location.

When does an out-of-state business have to collect Arizona sales tax?

Out-of-state sellers must register once their sales into Arizona pass $100,000 a year. Having an employee or office in Arizona also creates nexus right away.

What does an Arizona business have to file after it opens?

Recurring filings include: file the Annual Report (corporations only); file quarterly unemployment reports and withholding returns; file sales tax returns on time. The deadline calendar above lists the dates.

Checklists for every state

This guide organizes official requirements. It isn't legal or tax advice. Fees, forms, and deadlines change, so confirm on each linked state page before you file, and talk to an attorney or CPA about your specific situation.