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Arizona Business License
You are all ready to start a business in Arizona and are looking forward to a fruitful journey but have you considered the fact that you may require a business license in Arizona? Yes, as a matter of fact, you would require a business license to conduct business in the state but the license rules are quite different from that of other states.
Types of Business Licenses in Arizona
If you are planning to establish a small business in the state of Arizona then you may or may not require a business permit or a license. It all depends on the type of business you are setting up (industry) and the county or city your business is situated in.
There are 2 types of Arizona company licenses to choose from and they are:
Business License
In the state of Arizona, businesses are not required to hold a state business license and the state doesn’t issue any licenses. At the same time, most city/county/towns issue licenses as well as permits for specific businesses. Some counties or cities have laws where certain types of businesses situated within their jurisdiction have to obtain a license in order to conduct business.
Let’s look at an example to understand this in a better way:
Example: Phoenix
If you are planning to set up your business in the city of Phoenix, then it’s important to know that the city does not issue a general business license. At the same time, certain business activities are regulated and will require a license.
Some of the businesses that qualify for an Arizona company license in Phoenix include:
- Amusements like Concessionaires, Pool Halls, Coin Operated Games etc.
- Auction Houses and Auctioneers
- Escort Bureaus & Escorts
- Massage Establishments & Managers
The license fee varies according to the type of Phoenix business license in Arizona. The application fee for an auction house is $135.00, while the license and permit fee is $30.00. Similarly the application fee for massage establishments is $550.00, while the license and permit fee is $30.00. The license term status for either type of license is “Annual – prorated”
The application form for each of the above businesses is different and is available at the Phoenix County City Clerk Office. You can check the amusement business license here.
Transaction Privilege Tax (TPT) License
In the state of Arizona, if you are planning to set up a business for either selling a product or engaging in an activity that is subject to Use tax or Transaction Privilege tax, then you will be required to obtain a state transaction privilege tax (TPT) license. This type of business license in Arizona is also referred to as a tax license, sales tax license, wholesale license, resale license, or vendor license.
Let’s look at an example to understand this in a better way:
Example: Phoenix
The city of Phoenix requires those business entities to obtain a ‘Privilege Tax License” that use tax liability or a privilege (sales) tax liability within the city. It is important to understand that all types of businesses or business activities don’t require an Arizona company license for Phoenix.
According to the Chapter 14 of the Phoenix City Code, some of the businesses or business activities that are required to obtain a state transaction privilege tax (TPT) license include Advertising, Construction Contracting, Mining, Jet Fuel Sales, Publishing, Hotel / Motel / Transient Lodging, Restaurants and Bars, Retail Sales, Telecommunication Services, and Utility Services among others.
The business license fee is $50.00 for a business activity. This excludes residential or commercial rental. It is important to note that if a business entity is unable to pay the license fee in full, then a 50% late fee amounting to $25.00 will be assessed. The license will be renewed annually and the fee for the same is $50.00. It is due on January 1 of each year.