Arizona consistently ranks as one of the top states for small business. Low taxes, a growing economy, and a fast state filing process make it an attractive place to launch.
Here's a step-by-step guide to starting a business in Arizona.
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Why Arizona Is Great for Business
- No LLC franchise tax, Unlike California ($800/year minimum), Arizona charges no annual franchise tax on LLCs
- Low state income tax, Arizona has a flat 2.5% individual income tax rate (one of the lowest in the country)
- Fast LLC formation, Standard filing is processed in 3–5 business days; expedited in 24 hours
- Growing economy, Phoenix and Scottsdale are among the fastest-growing business markets in the U.S.
- No publication requirement, Many states require you to publish your LLC formation in a newspaper. Arizona does not.
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Step 1: Choose Your Business Structure
For most small businesses, an LLC is the right choice. It protects your personal assets and is simple to run.
Your options:
- Sole Proprietorship: No registration required, no liability protection
- LLC: Best for most small businesses, protects personal assets, pass-through taxes, easy to operate
- Corporation (S-Corp or C-Corp): Better for businesses seeking investors or planning to go public
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Step 2: Name Your Business
Your business name must be unique in Arizona. Before you fall in love with a name:
1. Search the Arizona Corporation Commission name database at azcc.govazcc.govhttps://ecorp.azcc.gov
2. Check for trademark conflicts at tmsearch.uspto.govtmsearch.uspto.govhttps://tmsearch.uspto.gov
3. Verify the .com domain is available (Namecheap.com)
4. Check Instagram, TikTok, and other social handles
Arizona LLC names must include "LLC," "L.L.C.," or "Limited Liability Company."
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Step 3: Form Your LLC with the Arizona Corporation Commission
File online at [ecorp.azcc.gov](https://ecorp.azcc.gov)
What you'll need:
- Business name
- Arizona statutory agent (registered agent) name and address, must be an AZ resident or registered business with an AZ address
- Member/manager information
- Filing fee: $50
Processing time: 3–5 business days standard; 24 hours for $35 expedited fee
Important: Arizona LLCs formed after September 1, 2020 do not need to publish formation in a newspaper. Earlier rules required this, the law changed.
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Step 4: Get Your EIN from the IRS
An EIN (Employer Identification Number) is your federal business tax ID. You need it to:
- Open a business bank account
- Hire employees
- File federal taxes
Apply free at [IRS.gov/EIN](https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online), takes about 10 minutes online.
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Step 5: Get Your Arizona Business License
Arizona does not have a single statewide general business license. Instead, licensing happens at multiple levels:
Arizona Transaction Privilege Tax (TPT) License:
Required if you sell taxable goods or services. Apply at AZTaxes.govAZTaxes.govhttps://aztaxes.gov, this is essentially Arizona's sales tax permit. Cost: $12 one-time fee.
City/County Business License:
Many Arizona cities require a local business license:
- Phoenix: City of Phoenix business license required for most businesses (~$50/year)
- Scottsdale: Scottsdale business license required (~$25–$150 depending on business type)
- Tucson: Business license required (~$50)
- Tempe, Mesa, Chandler: Check each city's website for current requirements
Industry-specific licenses:
Contractors (ROC license), healthcare providers, real estate agents, food businesses, and others require additional state licenses.
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Step 6: Open a Business Bank Account
Required documents:
- EIN letter from the IRS
- Arizona LLC Articles of Organization
- Government-issued ID
Recommended banks for Arizona small businesses:
- Chase Business Complete Checking, branches throughout Phoenix/Scottsdale metro
- Wells Fargo Business Choice, wide AZ branch network
- Relay, online business bank, no fees, excellent for remote businesses
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Step 7: Understand Arizona Taxes
State income tax: 2.5% flat rate (applies to LLC pass-through income)
Transaction Privilege Tax (TPT): Arizona's version of sales tax. Rates vary by city, state rate is 5.6%, but combined with city/county rates, Phoenix area total is typically 8.6%.
No franchise tax: Arizona LLCs pay no annual franchise or privilege tax (unlike California, Texas, or New York).
Annual report: Arizona LLCs file an Annual Report with the ACC. Fee: $0 for standard filing, $9 for expedited. Due on the anniversary of formation.
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Arizona-Specific Resources
- Arizona Corporation Commission: azcc.govazcc.govhttps://azcc.gov, LLC formation
- AZ Commerce Authority: azcommerce.comazcommerce.comhttps://azcommerce.com, grants, incentives, small business resources
- Arizona Small Business Development Centers: Free consulting at locations across the state
- SCORE Phoenix/Tucson: Free mentoring from experienced business owners
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*FoundersPie builds you a personalized step-by-step roadmap for launching your business, whether you're in Phoenix, Tucson, Scottsdale, or anywhere else in Arizona. Build your free Arizona business plan →Build your free Arizona business plan →https://getfounderspie.com*
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Arizona Business Startup Costs (2026)
Arizona is one of the more affordable states to start a business. Here is what the core steps cost.
| Item | Cost | Notes |
|---|---|---|
| LLC Articles of Organization | $50 | $85 for expedited processing |
| Publication requirement | $30 to $300 | Not required in Maricopa or Pima counties |
| EIN from the IRS | Free | Takes about 10 minutes online |
| Transaction Privilege Tax (TPT) license | $12 per location | Arizona's version of a sales tax license |
| Registered agent (optional service) | $0 to $150/yr | You can be your own agent |
Unlike many states, Arizona has no annual report fee for LLCs, which keeps your ongoing costs low. That is a real advantage for early-stage founders.
The Exact Steps to Start in Arizona
1. Choose your structure and name. Most founders form an LLC. See our full Arizona LLC formation guideArizona LLC formation guide/blog/how-to-form-an-llc-in-arizona.
2. File with the Arizona Corporation Commission. Submit your Articles of Organization online for $50.
3. Handle the publication requirement. Outside Maricopa and Pima counties, you must publish a notice in an approved newspaper within 60 days. In those two counties it is waived.
4. Get your EIN. It is free and fast. Our Arizona EIN guideArizona EIN guide/blog/how-to-get-ein-arizona walks through it.
5. Register for TPT. If you sell goods or certain services, get a Transaction Privilege Tax license through AZTaxes.gov.
6. Get local licenses. Cities like Phoenix and Scottsdale require their own business licenses. Check your city. See getting a business licensegetting a business license/blog/how-to-get-a-business-license for the general process.
7. Open a business bank account. Keep your finances separate to protect your liability shield.
City-Specific Notes
Phoenix: Requires a city business license for most activities, applied for through the city's online portal. Home-based businesses may need a use permit.
Tucson: Pima County waives the LLC publication requirement, and the city has its own business license process for many trades.
Scottsdale: Has its own licensing requirements on top of state registration. If you are launching here, read how to start a business in Scottsdalehow to start a business in Scottsdale/blog/how-to-start-a-business-in-scottsdale.
Arizona Taxes You Should Know
Arizona's TPT is technically a tax on the seller for the privilege of doing business, not a true sales tax, but in practice you collect it from customers. Rates vary by city, so a Phoenix business and a Tucson business may charge different combined rates. The state corporate income tax rate is a flat 4.9 percent, and Arizona has a flat 2.5 percent individual income tax rate, which pass-through owners pay on business profits.
Frequently Asked Questions
How much does it cost to start an LLC in Arizona?
The state filing is $50. If you are outside Maricopa or Pima counties, add $30 to $300 for the publication requirement. Many founders start for under $100 total.
Does Arizona require an LLC annual report?
No. Arizona is one of the few states with no annual report or annual fee for LLCs, which lowers your ongoing cost significantly.
What is a TPT license?
Transaction Privilege Tax is Arizona's version of a sales tax license. If you sell taxable goods or services, you register for it at AZTaxes.gov for $12 per business location.
Do I need a business license in Arizona?
Arizona has no statewide general business license, but most cities (including Phoenix and Scottsdale) require their own. You may also need TPT registration and industry-specific licenses.
Can I be my own registered agent in Arizona?
Yes, as long as you have a physical street address in Arizona and are available during business hours.
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