How to Apply for a Business License in Arizona

When you start a new business in Arizona, you need to set the foundations of your company, register with the Arizona Department of Revenue (ADOR), and get all of your paperwork in order. Licensing is an integral part of this process.

This article will help you understand Arizona regulations and serve as your guide to getting an Arizona business license.

Arizona Business License: Key Takeaways

• In Arizona, businesses may require different federal, state, and local licenses, depending on their industry and location. 

• Many businesses in Arizona need to obtain a Transaction Privilege Tax (TPT) license to sell products or offer certain services legally. 

• You must renew all your business licenses periodically to avoid penalties, lawsuits, and potential business closure. 

What Is a Business License?

A business license is a permit that a company gets from the local, state, or federal government. This permit allows you to conduct business operations on the appropriate level. 

It’s not unusual to equate business licensing with business registration. Yet, the two aren’t the same. To register a business, you must choose a business name and file your limited liability company, nonprofit, or corporation formation documents with the state.

On the other hand, licensing relates to getting the appropriate permits to conduct business in a particular state, county, city, or town. In Arizona, general state licenses aren’t mandatory. However, you’ll need to apply for others, like the Transaction Privilege Tax license and any applicable local licenses.[1]

Get Your Arizona Business License in 8 Steps

According to the Arizona Commerce Authority, business licenses in the state differ by type and the authority issuing the permit.[2] However, the process doesn’t have to be overly complicated. You can get it done in eight steps.

Step 1: Apply for Arizona General Business Licenses

A general business license isn’t mandatory in Arizona, so you won’t have to apply for this type of license. However, that doesn’t mean your business can operate completely license-free. Specific licenses might be necessary for businesses within a particular industry. Likewise, local licenses are often necessary to comply with county, city, or town regulations. We’ll discuss each in the steps below.

Step 2: Apply for Federal Licenses for Arizona Businesses

You must apply for a federal license if a federal agency regulates your industry. This rule applies to livestock sales, transportation, broadcasting, and trucking companies. Additionally, a federal license will also be required if the business activity is regulated on a federal level, as is the case with mining or tobacco manufacturing.

If your business industry falls under this category, you must register a license with the corresponding federal agency, such as the Department of Agriculture or the Federal Communications Commission. 

Step 3: Search for Arizona Permits and Licenses

All businesses selling taxable services or products in Arizona must get a Transaction Privilege Tax license. 

Other than this license, your business might need a special permit if operating in a specific industry. In particular, the state of Arizona requires special permits, certifications, or licenses for the following:

• Tobacco manufacturing and sales

• Liquor manufacturing and sales

• Home inspection

• Pest control

• Construction contracting

• Transportation

• Child care

• Adult home care

• Massage

For further clarification, you can check out contacts and resources on the License Compliance Program page at azdor.gov.[3]

Step 4: Search for Local County or City Arizona Business Licenses

Federal and state licenses aren’t the only permits you might need for your Arizona business. Local licenses may be mandatory, depending on particular regulations in your county or city. The rule here is relatively straightforward: Any business activity regulated directly by the local government must comply with local regulations.

For example, in Phoenix, you’ll need special permits for the following business types:

• Curb painting

• Amusements

• Massage

• Auctions

• Sexually oriented business

• Escorts

• Vending

In addition, the city of Phoenix issues certificates of approval for business activities like regular or special event liquor sales, topless bars, off-track betting, and bingo.[4]

On the other hand, starting a business in Tucson may necessitate specific county permits. For instance, you’ll need approval from the Pima County Health Department if you plan on preparing food. Manufacturers must obtain an Air Quality permit from the Pima County Department of Environmental Quality.

Contact your local county clerk and city official to ensure your business complies with all local regulations.

Step 5: Search for Arizona Professional Licenses

Depending on your field of work, you may need to get a professional license for the state of Arizona. For example, some professional boards oversee:

• Acupuncturists

• Barbers

• Dispensing opticians

• Nursing care staff

• Physical therapists

• Psychologists

• Athletic training

This is not an exhaustive list, and you should review your business activities to see if you need a professional license. For example, some contractors, teachers, lobbyists, and realtors may also need corresponding licenses.

Step 6: Apply for an Arizona Home-Based Business License

There is no specific home-based license for businesses in Arizona. However, you may still need licenses depending on your business type, location, and industry. 

For example, running a home clinic will call for professional and local city licenses. Another thing to consider here is the zoning regulations, which might affect where your business can be located to perform a specific type of activity.

Step 7: Maintain Your Arizona Business License

When you obtain a permit to do business in Arizona, the license won’t be permanent. All businesses in the state will need to maintain their licenses by renewing them regularly.

However, different businesses may need to renew their licenses after different periods. Likewise, the renewal fee won’t be the same for all companies. Additional requirements, such as a minimal insurance level or annual report submission, may apply. However, it's essential to comply to keep your business operating and in good standing with the state.

If you need help with license renewal, we can make the process seamless. You won’t need to worry about getting everything right on your own with the assistance of experienced professionals.

Apply for an Arizona Business License Online

If you’re just starting your business, getting the right licenses may seem like a very challenging task. Plus, the possibility of making a mistake during the process can be quite scary, since improper licensing can lead to financial penalties and other severe consequences.

With Swyft Filings, you don’t have to worry about getting penalized for accidental mishaps. Our professional filing service will handle the heavy lifting and help you get the appropriate permits quickly. This way, you’ll be free to focus on what you do best — running and growing your business.

FAQs

How do I get a business license in Arizona?

To get a business license in Arizona, the first thing to do is determine if you need a license depending on your business type. In most cases, you’ll need a Transaction Privilege Tax (TPT) license through the Department of Revenue. Local licenses are issued by each individual city or town according to its business license requirements, while professional licenses are issued by the corresponding authority.

Does Arizona require a general business license?

According to the Arizona Commerce Authority, general business licenses aren’t mandatory in Arizona. However, your company must apply for a Transaction Privilege Tax (TPT) license if you plan to sell taxable goods or services. You might also need a local or federal license, depending on which business you run and how your activities are regulated. 

Can you sell things in Arizona without a license?

You’ll need a Transaction Privilege Tax license to sell products or provide similar business services. This rule applies to vendors, wholesalers, resale, and similar businesses. Furthermore, regulatory licenses will apply to companies selling alcohol, textiles, firearms, and other specific products.

Do I need a special license for an online business in Arizona?

Having an online business won’t impact your license obligations. Whether or not your business needs a license will depend on location and the business activity conducted.

Can I collect sales tax in Arizona without a license?

You’ll need a license from the Arizona Department of Revenue to collect sales taxes legally. Without this permit, sales tax collection won’t be possible.

How much does an Arizona business license cost?

The exact cost for a business license in Arizona will vary, with the average cost being about $170. Renewing your license may cost about $85 on average. However, if you have a business dealing in alcohol, food, or other activities requiring more complex licensing, the expenses may be higher.

What’s the penalty for not having a business license in Arizona?

Operating a business without proper licensing in Arizona could have dire consequences. Depending on the type of business, you could face financial penalties, lawsuits, bankruptcy, and even forced company closure.

Bibliography

1. Arizona Department of Revenue. “Business. Licensing and Taxes.” Accessed July 26, 2023.

2. Arizona Commerce Authority. “Business Licensing.” Accessed July 26, 2023.

3. Arizona Department of Revenue. “License Compliance Program.” Accessed July 26, 2023.

4. City of Phoenix. “How Do I Get a Business License.” Accessed July 26, 2023.