I am ready to start my business in Arizona

Please note: Click on the "plus" (+) sign within each box above to view content.

 

STATE LICENSING

Business License

Contrary to popular belief, Arizona does not issue nor require a "generic" state business license just because you are in business. Therefore, direct customer service activities, such as house cleaning, lawn maintenance, pet sitting, etc., do not typically need a license from the state to be in business.

Transaction Privilege (Sales) Tax (TPT) License

If you plan to sell a product or engage in a service subject to state and/or local 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. For more information, see Engaging in activities subject to transaction privilege (sales)/use tax.

Regulatory (Professional/Special) Licensing/Permits

If your business is involved in activities supervised and regulated by one or more state offices, 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 state regulatory compliance/licensing, check with the appropriate state regulatory agencies and review the Arizona Revised Statutes. For more information, see Business Licensing

LOCAL COMPLIANCE

Zoning

There may be restrictions on where you can locate your business and what improvements you can make to your existing property, so it is necessary to contact the city/town (or county if business will be based in an unincorporated region of the county) planning and zoning division regarding zoning laws before you commit to anything.

Business Licensing

Most city/town offices require businesses based within their jurisdiction - including those that operate from their home via the Internet - to obtain their business license. Businesses operating within their jurisdiction may also need to obtain their business license. This is true even if the business is engaged in an activity that does not require a license from the state. 

County offices do not typically issue a general business license, however, they may still have business compliance requirements/restrictions. See Special Licensing/Compliance section below. 

There is not a "blanket state license" that allows you to "opt out" of obtaining any local licenses which may be required.

Contact the business licensing division of any city/town/county office in which your business will be based and/or operate to verify any license requirements they may have for your particular business/business activity.

Special Licensing/Compliance

Certain types of businesses or business activities may be subject to special licensing at the local level - in addition to any other business license requirements. Examples include: alarm-related businesses; auctioneers/auction houses; carnivals; coin-operated game machines/centers; concession games; curb painters; escort bureaus; filming; food-related businesses; fortune telling; hanging flyers; knocking on doors; activities involving liquor and related products; massage businesses; mechanical rides; pawn shops/pawnbrokers; pet grooming; pool halls; selling ammunition/firearms; selling scrap metal; selling antiques or second-hand items, including gold, clothing, and appliances; sexually-oriented businesses; special events; mobile food vendors; street/sidewalk vendors; teenage dance halls; towing services; valet services; 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.

City/town offices generally require pretreatment devices - such as grease traps or sand/oil interceptors - for businesses that discharge to the local sewer system. Types of businesses include restaurants, auto shops, car washes, laundromats, bakeries, and breweries.

Contact the different city/town/county departments directly - such as building, regulatory (special) licensing, environmental, fire, and police/sheriff – to inquire about any business compliance requirements or restrictions they may have for your particular business/business activity.

ENVIRONMENTAL COMPLIANCE

Your business may be subject to environmental compliance at the state, local and/or federal level. Many industries are subject to environmental compliance, including: Asphalt, Auto Repair, Car Wash, Construction, Dry Cleaner/Laundry, Food Processing, Pest Control, Pharmaceutical, Photographer, Portland Cement Plant, Print Shop, RV/Mobile Home Park, School, Solid Waste Hauler, Spray Painting Booth, Water Company, Woodworking Shop, etc.

BONDING/INSURANCE

Although not generally a legal requirement, bonding and insurance for service businesses may be required or requested by your customers in order to perform your services. Please refer to your personal insurance agent or a bonding company for assistance on this matter and any additional insurance needs.

BUSINESS TAXES

Our Business Taxes page includes links to many helpful resources including: Business Basics - A Guide to Taxes for Arizona Businesses; Starting a Business - What New Business Owners Need to Know About Federal Taxes; and Seminars, Workshops and Online Learning.

PROTECT YOUR BUSINESS

Visit Protecting Small Businesses on the Federal Trade Commission (FTC) website for information to help you avoid scams, protect your computers and networks, keep your customers’ data safe – and protect your bottom line. Stay connected by subscribing to the FTC’s Business Blog.

BUSINESS COUNSELORS

Some organizations, such as the Arizona Small Business Development Centers (AZSBDC) Network and SCORE offer small business entrepreneurs confidential business counseling services at no charge, local and online workshops, as well as, resources, templates and tools to assist entrepreneurs. 

FEEDBACK/SUGGESTIONS

Didn't find what you needed? Find a bad link? Identify information that needs to be added/updated? Encounter a problem? Call the Program Manager at 602-845-1274. Thank you.

Did you find this Checklist Program easy to use and helpful? Click here to take our quick customer service survey. We welcome your feedback and suggestions - and appreciate your support - to enhance this free, online tool! 

DISCLAIMER

The ACA Checklist Program is not intended to be comprehensive and should not be used as the sole reference when starting a business. Regulations and other legal requirements change constantly and there may be some obligations for your specific business activity this Checklist Program does not cover. We strongly suggest you consult an attorney, accountant or other business consultant

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Thank you for using the ACA Checklist Program. We hope you will take advantage of this statewide "go-to" resource for each phase of your business development. We wish you much success in your business endeavor.

Sincerely,
Arizona Commerce Authority - Small Business Services

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Glendale

The City of Glendale requires all businesses, except for residential rental businesses, based and/or engaging in any business activity within their city limits to be licensed by them. In addition, depending on your type of business, special regulatory licenses may also be required. (18)

Contact:

City of Glendale, Licensing Office, Licensing & Sales Tax
5850 W. Glendale Avenue, Glendale, AZ 85301 
623.930.3190 

The City of Glendale imposes a transaction privilege (sales)/use tax on the gross receipts from various types of business activities. If your business activity is subject to city transaction privilege (sales)/use tax, you will need to obtain the state transaction privilege tax (TPT) license from the Arizona Department of Revenue in addition to any city requirements. See Engaging in Activities Subject to Transaction Privilege (Sales)/Use Tax. (19)

 

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Peoria

The City of Peoria requires that all persons conducting business in Peoria unless exempt must first obtain their city license. This includes businesses within the Peoria city limits, or those outside the limits who conduct business or perform services within Peoria. In addition, businesses may be subject to regulatory licenses and permits. (18)  

Contact:
City of Peoria, Sales Tax and License
8401 W. Monroe Street, Peoria, AZ 85345
623.773.7160

 

The City of Peoria imposes a transaction privilege (sales)/use tax on the gross receipts from various types of business activities. If your business activity is subject to city transaction privilege (sales)/use tax, you will need to obtain the state transaction privilege tax (TPT) license from the Arizona Department of Revenue in addition to any city requirements. See Engaging in Activities Subject to Transaction Privilege (Sales)/Use Tax. (18)

 

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Phoenix

To determine if the location of your proposed business has the correct zoning, contact the City of Phoenix Zoning Division.

Contact:
City of Phoenix, Planning and Development Department
200 W. Washington Street, 2nd Floor, Phoenix, Arizona 85003
602.262.7131, option 6

 

The City of Phoenix does not have or issue a general business license. Only certain activities are regulated and require a license or require a recommendation/approval from the City. 

Examples of regulated activities include: alarm businesses, amusements, auctions, curb painters, escort bureaus & escorts, massage establishments & managers, sexually oriented businesses & performers, structured sober living homes, vending (mobile, sidewalk, street, secondhand dealers, swap meet lots, scrap metal dealers, downtown sidewalk), liquor, bingo, off-track betting, and topless bars. (16)

Contact:
City of Phoenix City Clerk Department - License Services
Liquor and Regulated Business Licensing Information
200 West Washington Street, 1st Floor, Phoenix, AZ 85003
602.262.4638

 

The City of Phoenix imposes a transaction privilege tax on the gross receipts from various types of business activities. If your business activity is subject to city transaction privilege (sales)/use tax, you will need to obtain the state transaction privilege tax (TPT) license from the Arizona Department of Revenue in addition to any city requirements. See Engaging in Activities Subject to Transaction Privilege (Sales)/Use Tax. (19)

 

Additional Information:

List of Business Activities subject to City of Phoenix privilege sales/use tax is available on the City website. 

City of Phoenix: Entrepreneur ResourcesSmall Business Resources

City of Phoenix, Burton Barr Central Library: hive @ central - A discovery space for business entrepreneurs, combining elements of a co-working space with expert library fact-finding services and resources, and ASU startup expertise.



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Scottsdale

All businesses located in the City of Scottsdale require a Business Registration license - Service or Merchant, and may require an additional Regulatory license. (18)

Contact:
City of Scottsdale, Business Services
7447 E. Indian School Road, Ste. 110, Scottsdale, AZ 85251
480.312.2400

 

The City of Scottsdale imposes a transaction privilege (sales)/use tax on the gross receipts from various types of business activities. If your business activity is subject to city transaction privilege (sales)/use tax, you will need to obtain the state transaction privilege tax (TPT) license from the Arizona Department of Revenue in addition to any city requirements. See Engaging in Activities Subject to Transaction Privilege (Sales)/Use Tax. (19)

 

Additional Information:
City of Scottsdale, Scottsdale Public Library: The Loft @ Civic Center - A collaborative workspace equipped with free Wi-Fi, coworking areas, a computer station and access to library resources, located at Civic Center Library.

 

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Cleaning Service/Janitorial Maintenance

If you plan to perform direct customer service activities, see Local Compliance section below.

 

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Having Full-Time or Part-Time Employees   

As a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee before you can know how to treat payments that you make to that person. 

If you plan to hire one or more employees within Arizona, you will be subject to both federal and state requirements. Below are some resources to help connect you to the information you need. You may also wish to consult with your accountant or attorney for assistance.

Federal
State
  • Employers paying wages to employees for services performed in the state must register to remit withholding tax. The Arizona Joint Tax Application is used to register for your employer withholding/unemployment insurance license. The application is called "Joint" because it is used by both the Departments of Revenue and Economic Security. 
      
    Register Online: Businesses > Enroll to File and Pay Online (for Employer Withholding and Unemployment Insurance License)
    Download Form: Joint Tax Application for a TPT License (JT-1)  
     
    Contact:
    Arizona Department of Revenue: Arizona Withholding Tax
    Frequently Asked Questions - Withholding FAQs
    602.255.3381 or toll-free 800.843.7196 (from area codes 520 and 928) 
     
    Contact:
    Arizona Department of Economic Security - Questions Regarding Unemployment Tax 
    Arizona Department of Economic Security (DES): Unemployment - Employer
    Unemployment Insurance Tax (UIT) - Frequently Asked Questions
    602.771.6602 
     
  • Under Arizona law, it is mandatory for employers to secure workers’ compensation insurance for their employees. Workers’ compensation is a “no fault” system in which an injured employee is entitled to receive benefits for an industrial injury, no matter who caused the job-related accident. Employers are required to bear the entire cost of workers' compensation insurance.
      
    Companies may choose to insure their employees by insuring with an authorized carrier of the state, or by qualifying as a self-insurer under the rules and regulations of the Industrial Commission of Arizona. (17)

    The Arizona Department of Insurance can verify if a company is licensed and authorized to sell workers’ compensation insurance in the State of Arizona.

    Contact: Arizona Department of Insurance, Consumer Affairs Division, 602.364.2499 or 800.325.2548 

    The Industrial Commission of Arizona administers the Workers' Compensation Law. (17)
      
    Contact:
    Industrial Commission of Arizona, Claims Division: What Is Workers' Compensation and How Does It Work? 
    Phoenix area 602.542.4661 or Tucson area 520.628.5181 
      
  • On October 1, 1998, the Arizona New Hire Reporting Program from the Arizona Department of Economic Security, Division of Child Support Enforcement was established. State and federal law requires all employers to report each new and rehired employee to the State Directory of New Hires within 20 days of their hire date.   
      
    Contact: Arizona New Hire Reporting Center, 888.282.2064
     
  • Arizona law requires employers in Arizona to use the “E-Verify” system (a free Web-based service offered by the federal Department of Homeland Security) to verify the employment authorization of all new employees hired after December 31, 2007.  
      
    E-Verify: Enroll in the Program
      
    The Arizona Attorney General's Office web site provides basic information about the Legal Arizona Workers Act, sometimes called the “Employer Sanctions Law,” as amended. 

Additional Information
Employer Handbook on Unemployment Insurance Tax
: A publication of the Arizona Department of Economic Security to help you understand the Employment Security Law of Arizona and the withholding provisions of the State Income Tax regulations. 

Fair Labor Standards Act (FLSA) 
The Fair Labor Standards Act (FLSA) is a federal law administered by the Wage and Hour Division of the U.S. Department of Labor (DOL). This law establishes minimum wage, overtime pay and child labor standards for employers. The Industrial Commission of Arizona (ICA) has jurisdiction over all businesses in the state that are not covered by the FLSA. The Industrial Commission also shares jurisdiction with the Wage and Hour Division when both federal and state laws are the same. Visit the DOL website for easy-to-understand information about a number of federal employment laws. In addition, visit the ICA website. (17)

U.S. Department of Labor (DOL), elaws: Information about Federal Employment Laws   

Industrial Commission of Arizona (ICA), Labor Department: Information on State Labor Laws/Youth Employment/Wages 



Occupational Safety and Health Act of 1970 
The Industrial Commission of Arizona, under the Occupational Safety and Health Act of 1970, is the state agency charged with regulating industrial plants for fire, health and safety requirements. The safety standards enforced in Arizona are the same standards used by the U.S. Department of Labor. Arizona provides a consultation program from which businesses can obtain information to determine whether their facilities are in compliance with safety standards. For information on the Occupational Safety and Health Act of 1970, visit OSHA’s website. 

U.S. Department of Labor - Occupational Safety & Health Administration (OSHA): Occupational Safety and Health Act of 1970 

OSHA’s “Safety Pays” Program Provides Planning Tool for Businesses: Interactive tool to help employers approximate the costs of occupational injuries and illnesses and the estimated impact on a company’s profitability. 

U.S. Department of Labor, Occupational Safety and Health Administration, Help for Employers: How to comply, go beyond compliance, and improve your bottom line



U. S. Equal Employment Opportunity Commission (EEOC): Information is available from the U. S. Equal Employment Opportunity Commission (EEOC) for small businesses including a brief fact sheet, a booklet concerning the laws enforced by EEOC, and information concerning the mediation program which you are encouraged to consider in the event a charge of discrimination is filed against your business. 
Phoenix District Office: 602.640.5000 or 602.640.5052 or 602.640.5024 or 800.669.4000  

Governor's Office of Equal Opportunity: The mission of the Governor's Office of Equal Opportunity (GOEO) is to prepare, revise and administer the State of Arizona Equal Opportunity Guidelines for equal employment opportunity and economic growth as outlined in Executive Order 93-20. 
 
Maricopa Skill Center, division of GateWay Community College: Offers quality driven, workforce training programs. Coming soon are the following Green Technology Certifications: Solar Photovoltaic Installer, Solar Thermal Installer, Energy Auditor and Alternative Wall System Installer. These programs are developed in partnership with the City of Phoenix.

 

The Arizona Department of Insurance website provides health insurance resources such as publications, compared premiums, complaint ratios, health insurance resources, and more. 

 

IRS Tax Information for Businesses: If you decide to hire full-time or part-time employees, visit the IRS website for tax information for businesses. 

 

Internal Revenue Service - Tax Information for Retirement Plans Community: Forms, publications and information on how to start, maintain and administer a retirement plan.
 

SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA Plan: Provides employers and their employees with a simplified way to contribute toward retirement. 
 
U.S. Department of Labor's Employee Benefits Security Administration (EBSA) 
Compliance Assistance > For Small Businesses 
SIMPLE IRA Plans for Small Businesses  
Toll free: 866.444.EBSA (3272) 


Employers Council: Non-profit membership organization, founded in 1939, designed to partner with employers to maintain effective employer/employee relationships. A "one-stop shopping" resource for members in the areas of human resource management, employment law, surveys and training.
602.955.7558 or Arizona toll free 800.437.9262

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Independent Contractors

As a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee before you can know how to treat payments that you make to that person. 

The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work, and not the means and methods of accomplishing the result. 

If there is any doubt about the status of your employees or independent contractors, contact the IRS, Arizona Department of Economic Security, your workers’ compensation insurance provider, an attorney or an accountant for professional assistance. (13)

Contact: Internal Revenue Service, 800.829.4933
Independent Contractor (Self-Employed) or Employee?

Contact: Arizona Department of Economic Security, Tax Audit Offices 
Employment and Wages: Defining An Employee - Who Is An Employee?

Additional Information:
IRS: Forms and Associated Taxes for Independent Contractors 

IRS Publication 15-A, Employer’s Supplemental Tax Guide (Supplement to Publication 15 (Circular E), Employer’s Tax Guide) points out the differences between an independent contractor and an employee and gives examples from various types of occupations.

  

Having Employees/Independent Contractors

Whether building a team or adding talent to your company, hiring decisions are among the most difficult and important choices to make. Your first questions will be do you hire full-time or part-time employees or do you hire subcontractors to perform specific projects on an as-needed basis? This section is designed to help you with your hiring decisions and compliance requirements.


Occupational Safety and Health Administration (OSHA) Standards
Small businesses, particularly those in high-hazard industries or involved in hazardous operations, can work with safety and health consultants to identify workplace hazards, receive advice on compliance with OSHA standards, and receive assistance in establishing safety and health programs for their employees.

Additional Information:

Arizona Entrepreneur's Edge, Chapter 6: Hiring Employees and Contract Labor – Labor Guidelines and Workforce Programs

ARIZONA@WORK is the statewide workforce development network that helps employers of all sizes and types recruit, develop and retain the best employees for their needs. Through the support of federal funding, services are provided at no charge.

The Arizona Office of Economic Opportunity (OEO) provides a wide variety of state, region and local labor market, demographic and economic data, including: employment statistics, wage and price indices, etc. 

Please note: Click on the "plus" (+) sign within each box above to view content.

 

STATE LICENSING

Business License

Contrary to popular belief, Arizona does not issue nor require a "generic" state business license just because you are in business. Therefore, direct customer service activities, such as house cleaning, lawn maintenance, pet sitting, etc., do not typically need a license from the state to be in business.

Transaction Privilege (Sales) Tax (TPT) License

If you plan to sell a product or engage in a service subject to state and/or local 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. For more information, see Engaging in activities subject to transaction privilege (sales)/use tax.

Regulatory (Professional/Special) Licensing/Permits

If your business is involved in activities supervised and regulated by one or more state offices, 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 state regulatory compliance/licensing, check with the appropriate state regulatory agencies and review the Arizona Revised Statutes. For more information, see Business Licensing

LOCAL COMPLIANCE

Zoning

There may be restrictions on where you can locate your business and what improvements you can make to your existing property, so it is necessary to contact the city/town (or county if business will be based in an unincorporated region of the county) planning and zoning division regarding zoning laws before you commit to anything.

Business Licensing

Most city/town offices require businesses based within their jurisdiction - including those that operate from their home via the Internet - to obtain their business license. Businesses operating within their jurisdiction may also need to obtain their business license. This is true even if the business is engaged in an activity that does not require a license from the state. 

County offices do not typically issue a general business license, however, they may still have business compliance requirements/restrictions. See Special Licensing/Compliance section below. 

There is not a "blanket state license" that allows you to "opt out" of obtaining any local licenses which may be required.

Contact the business licensing division of any city/town/county office in which your business will be based and/or operate to verify any license requirements they may have for your particular business/business activity.

Special Licensing/Compliance

Certain types of businesses or business activities may be subject to special licensing at the local level - in addition to any other business license requirements. Examples include: alarm-related businesses; auctioneers/auction houses; carnivals; coin-operated game machines/centers; concession games; curb painters; escort bureaus; filming; food-related businesses; fortune telling; hanging flyers; knocking on doors; activities involving liquor and related products; massage businesses; mechanical rides; pawn shops/pawnbrokers; pet grooming; pool halls; selling ammunition/firearms; selling scrap metal; selling antiques or second-hand items, including gold, clothing, and appliances; sexually-oriented businesses; special events; mobile food vendors; street/sidewalk vendors; teenage dance halls; towing services; valet services; 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.

City/town offices generally require pretreatment devices - such as grease traps or sand/oil interceptors - for businesses that discharge to the local sewer system. Types of businesses include restaurants, auto shops, car washes, laundromats, bakeries, and breweries.

Contact the different city/town/county departments directly - such as building, regulatory (special) licensing, environmental, fire, and police/sheriff – to inquire about any business compliance requirements or restrictions they may have for your particular business/business activity.

ENVIRONMENTAL COMPLIANCE

Your business may be subject to environmental compliance at the state, local and/or federal level. Many industries are subject to environmental compliance, including: Asphalt, Auto Repair, Car Wash, Construction, Dry Cleaner/Laundry, Food Processing, Pest Control, Pharmaceutical, Photographer, Portland Cement Plant, Print Shop, RV/Mobile Home Park, School, Solid Waste Hauler, Spray Painting Booth, Water Company, Woodworking Shop, etc.

BONDING/INSURANCE

Although not generally a legal requirement, bonding and insurance for service businesses may be required or requested by your customers in order to perform your services. Please refer to your personal insurance agent or a bonding company for assistance on this matter and any additional insurance needs.

BUSINESS TAXES

Our Business Taxes page includes links to many helpful resources including: Business Basics - A Guide to Taxes for Arizona Businesses; Starting a Business - What New Business Owners Need to Know About Federal Taxes; and Seminars, Workshops and Online Learning.

PROTECT YOUR BUSINESS

Visit Protecting Small Businesses on the Federal Trade Commission (FTC) website for information to help you avoid scams, protect your computers and networks, keep your customers’ data safe – and protect your bottom line. Stay connected by subscribing to the FTC’s Business Blog.

BUSINESS COUNSELORS

Some organizations, such as the Arizona Small Business Development Centers (AZSBDC) Network and SCORE offer small business entrepreneurs confidential business counseling services at no charge, local and online workshops, as well as, resources, templates and tools to assist entrepreneurs. 

FEEDBACK/SUGGESTIONS

Didn't find what you needed? Find a bad link? Identify information that needs to be added/updated? Encounter a problem? Call the Program Manager at 602-845-1274. Thank you.

Did you find this Checklist Program easy to use and helpful? Click here to take our quick customer service survey. We welcome your feedback and suggestions - and appreciate your support - to enhance this free, online tool! 

DISCLAIMER

The ACA Checklist Program is not intended to be comprehensive and should not be used as the sole reference when starting a business. Regulations and other legal requirements change constantly and there may be some obligations for your specific business activity this Checklist Program does not cover. We strongly suggest you consult an attorney, accountant or other business consultant

- - -

Thank you for using the ACA Checklist Program. We hope you will take advantage of this statewide "go-to" resource for each phase of your business development. We wish you much success in your business endeavor.

Sincerely,
Arizona Commerce Authority - Small Business Services