Arizona Business License Requirements (2025 Update)
The Arizona business license is not a general statewide business license. However, businesses must obtain licenses at the local (city or county) level, and depending on the nature of the business, additional state-level permits may be required.
Each county and municipality may have its own specific requirements and fees, so it’s important to check with local offices. Understanding how to obtain a business license in Arizona is essential to ensure proper registration and avoid legal complications.
Does Arizona Require a Business License?
As mentioned above, Arizona does not require a general statewide business license. Not all businesses are required to have a license, and some businesses must have more than one license. The basic types of tax licensing in Arizona include:
- Transaction Privilege Tax (TPT) License: Required for businesses selling products or services subject to sales tax.
- Regulatory (Professional/Special) Licenses: Certain businesses may require additional licenses, certifications, or permits depending on their industry and regulations.
- Local Business/Occupational Licenses: Each city or town in Arizona may require a local business or occupational license.
Arizona Business License vs Municipal License
In Arizona, businesses must comply with both state and local regulations, meaning they must obtain licenses at the city or county level where they operate.
For businesses engaged in certain activities, such as selling goods or providing taxable services, they must register with the Arizona Department of Revenue (ADOR) for a Transaction Privilege Tax (TPT) license. This license functions similarly to a sales tax license and is often considered part of the Arizona business license process. The following are the details to be noted:
- State Business License: Arizona does not require a general statewide business license. Instead, businesses must register with the ADOR for a TPT license if they are engaged in taxable activities.
- Municipal Licenses: Additional licenses may be required by individual cities or towns. These can include general business licenses, health department certifications, and industry-specific permits.
Requirements in Arizona’s Largest Cities
The following points highlight the requirements of three of the largest cities in Arizona:
- Phoenix: Requires both a state TPT license and a city business license.
- Tucson: Requires a city business license in addition to the state TPT license.
- Scottsdale: Requires both a state TPT license and a city business license.
Arizona Business License: Occupational & Professional Permits
In Arizona, certain professions require additional Arizona business licenses beyond the standard business privilege license. These licenses ensure that professionals meet the necessary standards of competence. The main professions that require additional licensing are:
- Contractors: Must be licensed by the Arizona Registrar of Contractors. To apply, contractors must meet experience requirements, pass exams, and submit an application through the Arizona Registrar of Contractors.
- Cosmetologists: Need a license from the Arizona Barbering & Cosmetology Board. Applicants must complete the required training hours and apply through the board.
- Certified Public Accountants (CPAs): Are licensed by the Arizona State Board of Accountancy. To become licensed, applicants must meet educational and experience requirements and apply through the board.
Arizona Sales Tax License (Certificate of Authority)
In Arizona, businesses must obtain a Transaction Privilege Tax (TPT) license to collect and remit sales tax. This applies to both in-state businesses and remote sellers who establish nexus in the state.
Nexus can be created by having a physical location, storing inventory, conducting business, or exceeding $100,000 in annual sales. Businesses must apply for a TPT license through the ADOR.
The following steps highlight how to apply for a sales tax license in Arizona:
- Go to the Arizona Department of Revenue (ADOR) website.
- Navigate to the TPT Registration page and select “Apply for a TPT License” to begin the registration process.
- Provide your Employer Identification Number (EIN), business details, and relevant tax information.
- Submit the form online for review.
- Once processed, you’ll receive your TPT license by mail within 5-7 business days.
Renewal of Sales Tax License
Since there’s no statewide Arizona business license, the TPT license needs to be renewed annually. The license is valid for one calendar year, from January 1 through December 31 and businesses must renew annually by January 1.
Federal Licenses Needed in Addition to an Arizona Business License
In Arizona, while businesses are required to obtain a state-level TPT license or municipal licenses as part of their Arizona business license process, certain industries also require federal licenses or clearances to operate legally.
These federal licenses are issued by agencies such as the ATF, FAA, FDA, USDA, and FCC. Some of these industries are:
- Alcohol Production and Distribution: Businesses involved in manufacturing, importing, or selling alcohol must obtain a permit from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
- Firearms and Explosives: Engaging in the business of manufacturing, importing, or dealing in firearms or explosives requires a Federal Firearms License (FFL) from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
- Aviation Services: Operating aircraft or providing aviation-related services requires certification from the Federal Aviation Administration (FAA).
- Agricultural Products: Businesses involved in the import or transport of animals, plants, or biotechnology across state lines must obtain permits from the U.S. Department of Agriculture (USDA).
Note: Holding a state-issued business license does not fulfil federal licensing requirements.
How to Get an Arizona Business License?
Starting a business in Arizona requires obtaining the necessary licenses and permits. The following are the steps for how to get a business license in Arizona:
- Decide on your business structure (LLC, Corporation, Sole Proprietorship) and select the appropriate NAICS code that best describes your business activities.
- If forming an LLC or Corporation, register your business entity with the Arizona Secretary of State through the Arizona Corporation Commission. Sole proprietors and partnerships may need to register a Trade Name with the Arizona Secretary of State.
- Most businesses need a TPT license to collect and remit sales tax. Apply online via the AZTaxes.gov portal.
- Check with your city or county to determine if a local business license is required. Requirements vary by location and business type.
- Depending on your business activities, you may need additional permits, such as health permits, liquor licenses, or professional certifications.
- Pay any applicable fees, and once approved, display your licenses at your place of business as required.
How Much Is an Arizona Business License?
If you’re wondering, “How much is a business license in Arizona?” the fees differ based on your business activities and location. The cost of a business license varies depending on the business type and location. The following are the details to be noted:
- Transaction Privilege Tax (TPT) License: Required for businesses engaged in taxable activities. The state fee is $12 per location.
- Municipal Fees: Local cities and towns may impose additional fees for business licenses. Here are some examples:
- Variable Fees for High-Risk Trades: Certain industries may incur higher licensing fees due to increased regulatory requirements.
Renewing an Arizona Business License
To keep your business in good standing and avoid penalties, it’s essential to complete your Arizona business license renewal on time. Below are the key details for the renewal process:
- Renewal Requirement: Remote sellers and marketplace facilitators must renew their TPT license annually if they meet the $100,000 sales threshold.
- Renewal Fee: The renewal fee is $12 for remote sellers and marketplace facilitators with no physical presence in Arizona.
- Renewal Process:
- Log in to AZTaxes.gov to complete the renewal.
- The license is valid for the entire calendar year.
- Municipal Fees: No additional fees unless the business has a physical presence in Arizona, in which case municipal fees may apply.
Penalties for Operating Without an Arizona Business License
Operating without the required business licenses or permits in Arizona can lead to serious consequences. Depending on the nature of your business, you may face:
- Penalties for Unlicensed Operation: Businesses must pay the annual license fee plus a 50% penalty for each year they operate without a license.
- Failure to Renew: If a business fails to renew its license by January 31, it will be considered unlicensed and subject to penalties.
- Non-Transferable License: The TPT license is non-transferable, and businesses must display it at their place of business.
Best Arizona Business License Filing Services
Filing a business license in Arizona can be a complex and time-consuming task, but several services are available to simplify the process and ensure compliance. Commenda is the #1 choice for many businesses, offering fast, affordable, and reliable service.
The following are the best Arizona business license services that can help make the whole process efficient:
1. Commenda
- Price: Offers affordable pricing with various packages tailored to different business types.
- Turnaround: Typically processes within 1 to 3 business days.
- Support: U.S.-based live support with personalized assistance.
2. LegalZoom
- Price: Pricing starts at $79 plus state fees, with various packages offering additional services.
- Turnaround: 7 to 10 business days standard.
- Support: Email and phone support during business hours.
3. Incfile
- Price: Starts at $0 plus state fees, offers add-ons for compliance tracking.
- Turnaround: 3 to 5 business days.
- Support: Online chat and help center.
While all three offer solid service, Commenda stands out for its hands-on support and ability to handle both state and municipal filings in one place.
How Commenda Makes Arizona Business Licensing Easy
Commenda takes the complexity out of business licensing in Arizona with:
- All-in-One Dashboard: Manage and track both state and local licenses seamlessly from a single platform, simplifying the entire filing process.
- Compliance Reminders & Auto-Renewal: Stay on top of your deadlines with automated compliance reminders and auto-renewal tools to ensure you never miss critical updates.
- Expert Live Support: Receive personalized guidance from experienced, U.S.-based professionals available to assist you every step of the way.
Conclusion and Next Steps
Obtaining your Arizona business license doesn’t have to be complicated. Here’s a quick recap:
- Choose your business structure and NAICS code.
- Register with the Secretary of State, if applicable.
- Apply for state and local licenses.
- Confirm whether your industry needs special permits.
- Renew on time to stay in compliance.
Let Commenda handle the paperwork so you can focus on growing your business. Book a free demo today to learn more.
Arizona Business License FAQs
Q. How do I get a business license in Arizona if I run an online-only store?
You need to register your business with the Arizona Department of Revenue (ADOR) and obtain a Transaction Privilege Tax (TPT) license to collect and remit sales tax.
Q. How much does a standard Arizona business license cost, and are city fees extra?
The TPT license costs $12 for remote sellers and marketplace facilitators, and it is valid for the calendar year. Municipal fees will depend on the city or town where your business operates, and additional fees may apply based on your business type.
Q. What happens if I operate without a valid Arizona business license — fines or shutdown?
You may face civil penalties, cease-and-desist orders, and in some cases, criminal charges for repeated violations.
Q. Do home-based businesses in Arizona need both a municipal permit and a state license?
Often yes. You may need a zoning permit or local business license in your town, along with state-level registration for tax collection or regulated services.
Q. Is a Sales Tax Certificate of Authority the same as an Arizona business license?
No, a Sales Tax Certificate of Authority (TPT license) is required for collecting sales tax but is not a substitute for other industry-specific or local business permits, which may be required depending on your business activities.
Q. How long does approval take when you apply for a business license in Arizona online?
Approval for a business license in Arizona can take anywhere from a few days to several weeks, depending on the type of permit and the specific municipality.
Q. Can I transfer my Arizona business license if I move the company to another county?
You must update your address with the state and likely reapply for permits in your new city or town.
Q. What documents are required to renew an Arizona business license each year?
Typically, you need your current license number, business information, and proof of compliance, such as insurance or inspection records for regulated industries.
Q. Are professional and occupational licenses mandatory in addition to a general Arizona license?
Yes. Professions like contractors, barbers, accountants, and real estate agents require additional state-issued licenses.
Q. Which service offers the best done-for-you Arizona business license filing and renewal?
Commenda is highly rated for its all-in-one platform, expert help, and automatic renewal tracking.
Q. Do non-U.S. owners need a registered agent before getting an Arizona business license?
Yes. If you are a foreign entity, you must appoint a registered agent with a physical address in Arizona for Arizona business license registration.
Q. Does the federal government ever override Arizona licensing, such as ATF, FDA, FAA permits?
Yes. Federal permits are required for regulated activities and take precedence over state licenses in those sectors.
