How to Get a Small Business License in Arizona

When starting a business, you must take certain legal steps to make sure you can operate your type of business in your area. Every place is different so be sure to follow the regulatory requirements for your state, county, and city, including applying for any licenses and permits your business might need.

Here's a look at the license, permit, and registration requirements for an Arizona small business.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in Arizona, you must:

• register your business entity with the Arizona Secretary of State (SOS)
• file taxes with the Arizona Department of Revenue (ADOR), and
• apply for business licenses and permits with your state, county, and town.

The types of licenses and permits your business must apply for depends on your business structure, industry, and location. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• seller's permits (sometimes called "sales tax certificate")
• zoning and building permits, and
• doing business as (DBA) registrations.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in Arizona

As is the case with many other states, Arizona doesn't require businesses to obtain a statewide general license to operate in the state. Instead, your business might need to obtain a license based on its occupation or location.

Across Arizona, many cities and counties require businesses to apply for a license before operating within the city or county limits. Your city might require every business to have a general business license. Alternatively, your city or county could require businesses in only some industries to have a license.

For example, the City of Phoenix doesn't issue a general business license. Phoenix instead requires businesses engaged in specific activities to obtain a license or approval before operating within the city. The activities that require licensing include amusements, auctions, vending, and other activities. Liquor and wine sales and bingo and off-track betting require city recommendation and approval. The application fee depends on the type of license.

However, the City of Mesa requires most businesses to apply for a general business license to operate within the city. This requirement applies to most businesses that:

• collect sales tax
• are service-based, or
• operate out of a person's home.

Business owners can apply online for their Mesa general business license. The license must be renewed every year.

Talk to your local officials or visit your city or county website to find out whether your business needs a license.

Professional and Occupational Licenses for Businesses and Individuals in Arizona

Many professions and occupations require their practitioners to have special licenses or certifications related to their field. For example, typically, lawyers must have law licenses, realtors must have real estate licenses, and barbers must have a barber license.

Depending on the rules of your profession or occupation, you could need to get a license for yourself and your business. For instance, hairstylists who own a salon must apply for an establishment license and a personal license.

Unlike other states, Arizona's state government currently doesn't have a website with a list of licensed professions and occupations and links to their respective regulatory boards and licensing requirements. The Arizona state website does have a short set of links to licensing services on its professional licenses webpage. On the webpage, you can find links to:

• apply for and renew a contractor's license
• apply for and renew a teaching certificate
• register as a lobbyist
• renew a real estate license
• apply for a nursing license, and
• access eLicensing registration.

The eLicensing registration link leads you to a list of regulatory board websites.

Because there are no central regulatory authority that oversees professional and occupational licensing, you'll need to search for your industry's board or commission. Some of the more common boards, commissions, and committees include:

• Arizona State Board of Technical Registration: This board licenses architects, engineers, geologists, home inspectors, land surveyors, landscape architects, and alarm agents.
• Arizona Department of Insurance and Financial Institutions: This department licenses and regulates financial enterprises, financial institutions, insurance companies and professionals, mortgage lending, real estate appraisal, and property tax agents.
• Arizona Registrar of Contractors (AZ ROC): The AZ ROC licenses and oversees any business that builds, alters, repairs, moves, or demolishes any structure or road or performs a similar service.
• Arizona Barbering and Cosmetology Board: This board is in charge of barbers, aestheticians, nail technicians, hairstylists, and cosmetologists. The board also oversees schools and establishments (such as salons and barber shops) in this field.
• Arizona Department of Real Estate: This department licenses and regulates brokers and salespersons for real estate, cemeteries, and membership campgrounds.

You can likely find the website associated with your profession with a quick internet search. These websites typically have ways for you to apply for and renew your license online. You can also find information related to your profession, including:

• laws, rules, and standards for your industry
• board meeting dates, agendas, and minutes
• board staff and contact information
• industry news and updates
• examinations and continuing education requirements, and
• frequently asked questions.

You should check with the board, commission, or agency that regulates your profession to see which licensing requirements apply to you and your business.

Arizona Transaction Privilege Tax License

One of the more important state licenses for a small business is the transaction privilege tax (TPT) license. This license is required for businesses that will sell products or engage in a service that's subject to the TPT. The TPT license is similar to a sales tax license in other states.

The ADOR issues the TPT license. You must use the Arizona Joint Tax Application (JT-1) to apply for the TPT license. You can mail or hand deliver a paper application to the ADOR or you can apply online through AZTaxes.gov. (You can also register for other business taxes—such as use tax, withholding tax, and unemployment insurance—using the same application.)

For more information about this tax, check the ADOR's transaction privilege tax webpage.

In addition to the state TPT, you might be responsible for reporting and paying sales and use tax to your city or county. Make sure you check with your local taxing authorities for your reporting responsibilities.

Local Zoning and Building Permits

If you'll be renovating an existing space or building something new, you'll likely need to get special zoning and building permits from your city or county. You'll need to talk to your local officials or visit your city or county website for information related to building permits and inspections. You should also review your local code and ordinances to determine which requirements apply to your business and your planned operations.

Typically, you'll need to submit an application describing the work to be done along with a specified fee. City officials will then review your application. Most major construction projects typically require a round of inspections and potentially a meeting between government officials and the applicant. You might also be required to hire a professional architect or engineer and to submit site plans.

Zoning laws. If your type of business isn't in line with the zoning code, it could be a good idea to look for another space for your business. Alternatively, you might be able to apply for a special use permit. A special permit can provide your business with an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to have inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you plan to lease a commercial space, make sure you have a section in the commercial lease that ensures that the building and your use of the space are in line with the zoning laws.

Registering a Trade Name in Arizona

Many sole proprietorships and general partnerships don't simply operate under the names of their owners. Instead, they operate under a business name. Similarly, some companies, such as corporations and limited liability companies (LLCs), might originally register with the state under one name (sometimes called the company's "legal name") but later choose to operate under a different name. If you do business under a name that's different from your legal name, then you're using a "trade name" or "DBA."

For example, suppose you originally organized your car repair business as an Arizona corporation named "Summer Phoenix Garage, Inc." But you now want to operate your business under the name "Sunshine Foreign Auto Repair, Inc." The name "Sunshine Foreign Auto Repair, Inc." would be a trade name.

You can, but aren't legally required to, register your trade name with the SOS. (Ariz. Rev. Stat. § 44-1460 (2023).) While not required, registering your trade name provides some advantages. For instance, registration puts others on notice of your use of the name if you ever decide to register your trade name as a trademark.

You can submit your trade name registration application online with the SOS. During the filing process, you can check for the availability of the name. As of 2023, the filing fee is $10.

For more information on state requirements, check the trade names and trademarks section of the SOS website.

Other Licenses and Permits Your Business Might Need

Apart from the licenses and permits that are discussed above, some businesses might be required to obtain other regulatory licenses and permits. Regulatory licenses and permits might cover, for example, activities affecting the environment or public health and safety.

These licenses and permits are often issued by federal and state agencies. For example, the Arizona Department of Environmental Quality issues permits across an array of industries, from transportation to pharmaceuticals.

Sometimes these regulatory areas are encompassed within other licenses, permits, and registrations. Other times, the licenses and permits require a separate application process. If you're in a highly regulated field (for example, banking, pharmaceuticals, or insurance to name a few), you're more likely to need additional licenses and permits.

You might need the same type of license at the federal, state, and local levels. Alternatively, obtaining a license or permit at the federal level might exempt you from getting one at the state or local levels. You should check with your federal, state, and local governments for more information.

Government Resources for Arizona Small Businesses

The Arizona Commerce Authority (ACA) has lots of useful information for both new and existing businesses, including guidance on how to start and grow your business in Arizona. The Start-up section of the ACA website has links for things like:

• a checklist for building your small business
• networking events
• incubators and accelerators
• university, industry, and capital resources, and
• startup programs and incentives.

The U.S. Small Business Administration (SBA) has district offices in Phoenix, Tucson, and Show Low. The office's website lists upcoming events, resources, and news for small businesses.

The Arizona Small Business Development Center (AZSBDC) has guidance on how to start and grow your business. The website has information on small business events and how to get one-on-one business counseling. The AZSBDC is part of a national network of small business development centers.

Additional Licensing Help for Arizona Small Businesses

You can find more information and guidance in the small business section of our website. If you're interested in diving in further, you can also find expanded information in many of our books, such as Legal Guide for Starting & Running a Small Business, by Fred S. Steingold (Nolo), and The Small Business Start-Up Kit, by Peri Pakroo (Nolo).

If you're not sure which licenses and permits your business needs or you need help with the application process, consider reaching out to an Arizona business attorney. If possible, you should try to find a lawyer who has experience assisting businesses in your industry. An attorney can help you navigate the steps to get your business license or permit.