One of the most common questions individuals ask when starting a business is, "Where do I get an Arizona business license?" This question is based on the assumption that 1) everyone needs a license, 2) there is only one type of license needed, and 3) licensing is handled by one central licensing office. None of which is true in Arizona. Another common question is, "Can you tell me what licenses my business needs?" Determining business compliance requirements will take research on your part.
Complete I am ready to start my business in Arizona or I am expanding or relocating my business to Arizona to create a checklist that will direct you to most of the business forms you may need and information for contacting licensing agencies. To learn more about Transaction Privilege (Sales) Tax, Business, and Regulatory licensing, see below.
Types of Business Licensing:
Any license(s) you need to be in business, could be - and often is - generically referred to as a "business" license, however, there are basically three different types of "business" licenses in Arizona: Transaction Privilege (Sales) Tax (TPT), Business, and Regulatory (professional/special). (23)
- Transaction Privilege (Sales) Tax (TPT) License - If you plan to sell a product or engage in an activity subject to transaction privilege (sales) or use tax*, you will most likely need to obtain the state transaction privilege tax (TPT) license - commonly referred to as a sales tax, resale, wholesale, vendor or tax license - from the Arizona Department of Revenue (ADOR).
*Types of business activities subject to the transaction privilege (sales)/use tax include, but are not limited to: 911 Telecommunications; Advertising; Amusement; Commercial Lease, Rental & Licensing for Use; Communications; Construction Contracting (Owner Builder, Prime, Speculative Builder); E911 Prepaid Wireless; Feed at Wholesale; Hotel/Motel (Transient Lodging); Jet Fuel Tax; Job Printing; Manufactured Buildings; Mining-Nonmetal; Municipal Water; Online Lodging Marketplace; Personal Property Rental; Pipeline; Private (Rail) Car; Publication; Rental, Leasing, & Licensing for Use of Tangible Personal Property; Residential Rental, Leasing, & Licensing for Use; Restaurants and Bars; Retail; Retail Sales Food for Home Consumption; Severance-Metalliferous Mining; Telecommunications Devices; Timbering and Other Extraction; Transporting; Use Tax (Direct Payments, Jet Fuel, Purchases, Utilities, from Inventory); and Utilities.
For questions about whether or not your business activity is subject to transaction privilege (sales) or use tax, check with the Arizona Department of Revenue. (23)
The Arizona Department of Revenue publishes informational brochures regarding selected activities subject to state and county tax. Check with individual city/town offices for their informational tax brochures.
The Arizona Department of Revenue Transaction Privilege Tax (TPT) Rates and Deduction Codes contain rates for Transaction Privilege and other taxes imposed by the State of Arizona, the counties, and most Arizona cities. (23)
- Business License - Arizona does not issue nor require a state business license, however, most city/town offices issue business licenses. Some may only require businesses that are based within their jurisdiction to obtain their license; others may require anyone conducting business within their city/town limits to obtain their license. There is not a "blanket state license" that allows you to "opt out" of obtaining any local licenses which may be required.
For questions about whether or not your business activity is subject to one or more business licenses, check with each city/town office in which you plan to be based and/or conduct business. (23)
- Regulatory (Professional/Special) Licensing/Permits - If your business is involved in activities supervised and regulated by one or more federal, state, and/or local governmental office, then you may need to obtain special licenses, certification, or permits, in addition to any other licenses/permits that may be required.
For questions about whether or not your business activity is subject to regulatory compliance/licensing, use the links provided to below to begin your research. You may wish to consult with your attorney. (23)
- Federal - Examples of regulated industries include: agriculture; alcohol; appliances; automobiles; aviation; clothing and textiles; finance; firearms, ammunition and explosives; fish and wildlife; franchises, business opportunities, and investments; funerals; human resources; jewelry; mining and drilling; non-profits; radio and television broadcasting; real estate and mortgages; tobacco; transportation and logistics, etc. (23)
Visit the U.S. Small Business Administration (SBA) Apply for licenses and permits: Federal Licenses & Permits web page for a brief list of business activities that require a federal license or permit. (23)
U.S. Small Business Administration (SBA): Stay legally compliant
- State - Examples of regulated business activities/occupations include: construction contracting, transporting for hire, massage, adult care home, child care, home inspection, pest control, selling alcohol, tobacco, etc.
For questions about whether or not your business activity is subject to state regulatory compliance/licensing, check with the appropriate state regulatory agencies and review the Arizona Revised Statutes and the Arizona Administrative Code (where the official rules of the state of Arizona are published.)
Arizona Revised Statute (ARS): 41-1001.02. Clarification of interpretation or application; exemption
Arizona's new universal licensing recognition law makes it easier for people who are already licensed in another state to get an occupational license at the same level in Arizona.
- Local - Examples of regulated business activities/occupations include: food-related businesses, street vendors, hanging flyers, knocking on doors, selling second-hand items or antiques, selling ammunition/firearms, pet grooming, selling scrap metal, auctioneers/auction houses, carnivals, fortune telling, pawn shops, alarm-related businesses, massage businesses, etc.
The county health departments issue permits to - and perform inspections on - businesses like food establishments, pet shops, public accommodations, public and semi-public swimming pools, mobile food vendors, and trailer parks. The county regulates water, wastewater and solid waste related activities.
For questions about whether or not your business activity is subject to any business compliance requirements at the local level, check with the different city/town/county departments - such as planning and zoning, building, business licensing, regulatory (special) licensing, environmental health, fire, and police/sheriff's office.
- Industry Certifications - Industry certification may be available for certain professions, such as auto mechanics, travel agents and speech therapists. In addition, industry associations may be aware of governmental requirements for your industry.
To find out more, contact your industry association. Chapter 8 of our online Arizona Entrepreneur's Edge Resource Guide (pdf) includes a listing of associations. A more comprehensive list of national and local industry associations is available through the Encyclopedia of Associations. Check with your local library for this multi-volume directory.