Starting a New Business
Starting a new business is an exciting venture and the department congratulates you on your decision to become an entrepreneur or franchisee.
The goal of the Arizona Department of Revenue (ADOR) is to help business owners maintain tax and licensing compliance. In fact, A Guide to Taxes for Arizona Businesses is designed to do just that. The guide describes the types of licenses and taxes applicable in the state and identifies other agencies that impose taxes and require licensing. This publication is part of a series that discusses in detail transaction privilege and other tax issues administered by the state.
Your business must register with ADOR before conducting any taxable business activity in Arizona for TPT purposes.
Other Taxes and Licenses
Depending on the type of business, you may be subject to other taxes or licenses, such as if you conduct business involving liquor, tobacco, or bingo.
Corporate Income Taxes
Businesses are also subject to corporate income tax.
Buying a Business
If you are purchasing an existing business, you need to register the business. Contact ADOR to ensure that you will not be responsible for the previous business owner’s tax liabilities.
Licensing and Taxes
In Arizona, not all businesses are required to have a license, and some businesses must have more than one license. There is not a “generic” state business license.
The basic types of licensing in Arizona include:
- State Transaction Privilege Tax License – Businesses selling a product or engaging in a service subject to transaction privilege tax will 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).
Please see our TPT licensing section for more information.
- Regulatory (Professional/Special) Licensing/Permits – Special licenses, certification, permits, etc. may be required of certain businesses/professions. Business regulations vary by state, local and federal government and industry.
Please note: A service business may or may not be subject to regulatory licensing, TPT and/or business licensing. Businesses can use the Arizona Commerce Authority (ACA) Small Business Services’ Checklist Program to research business compliance requirements that may impact a business. Business owners may also wish to consult an attorney for assistance. If they need accountant or attorney referrals, business owners can review the Finding Professional Partners in the ACA Small Business Services’ Checklist Program under “I am thinking about starting a business in Arizona.”
- Local Business/Occupational License/Permit(s) – Each city in which a business operates may require licensing. For additional information, including contact information and links to download license applications, click here.
Arizona businesses that engage in activities which are supervised and regulated by one or more federal, state or municipal government office may be required to obtain special licenses, certifications or permits. These activities may include one or more of the following examples, but are not limited to:
- Construction Contracting
- Transportation for Hire
- Adult Home Care
- Child Care
- Home Inspection
- Pest Control
- Tobacco or Liquor Sales
If you are starting a business and need help determining licensing, contact License Compliance at [email protected].
Know Your Rights
Arizona Revised Statute outlines notice requirements for all licenses, fees, audits, rulemaking and written comments for small businesses.
Businesses should be aware of the following: