A crucial step in starting a limited liability company (LLC) in Arizona is acquiring all the licenses and permits required for your business. Depending on your industry and location, you may be required to get licenses and permits at the federal, state, and local levels.
This is a must because, without them, you could face severe penalties, even the closure of your business. Lucky for you, this guide lays out all you need to know to ensure you’re in full compliance in Arizona.
Which Department Issues Business Licenses and Permits?
In most states, several agencies and departments issue licenses and permits depending on the type of business. For example, the Department of Revenue issues most licenses in Arizona, although the Arizona Department of Health Services also issues many licenses.
Sales tax permits, known as transaction privilege tax licenses in Arizona, are issued by the Department of Revenue.
You can apply online at the Arizona Taxes website. The fee is $12 per location. In addition, the local government charges a fee.
At the county and municipal levels, various departments issue licenses and permits. Check with your local governments for requirements.
Federally, different departments oversee different industries. As a result, licenses and permits are generally industry-specific, except for health permits from the Occupational Safety and Health Administration (OSHA). So, for example, if you run a farm, you may need U.S. Department of Agriculture licensing.
You must register with the Bureau of Alcohol, Tobacco, Firearms, and Explosives if your business sells fireworks. Most industries, however, do not require licensing at the federal level.
The Small Business Association (SBA) has put together a handy guide that details which licenses and permits are needed for various types of businesses.
Common Business Licenses and Permits
Here are some standard licenses and permits you may need:
If a federal agency regulates your industry, you’ll need to be licensed by that agency. Some examples of federal agencies that may require you to be licensed include:
- The Department of Agriculture
- The Alcohol and Tobacco Tax and Trade Bureau
- The Bureau of Alcohol, Tobacco, Firearms, and Explosives
- Department of Transportation
Standard licenses at the state level include:
- Industry-specific licenses for certain professions and industries, such as construction, plumbing, electrical, childcare, food handling, liquor, architecture, and finance
- Health licenses and permits
- Doing business as (DBA) permits using a name other than your LLC.
- Sales tax permit
At the municipal or county level, you may need the following:
- Building and zoning permits
- Health licenses and permits
- Fire permits
- Sign permits
How to Obtain a Business License in Arizona
In Arizona, you’re not required to get a general business license. However:
- Unless you’re operating as a sole proprietorship or partnership, you’ll need to register your business entity with the state, usually as an LLC or a corporation. You can do so with the Arizona Corporations Commission.
- You’ll need to register for transaction privilege tax on the Arizona Taxes website if you sell goods or services.
- Other licenses can be applied for with specific departments. For example, if you have a childcare business in Arizona, you’ll need a childcare facility license. For this, you’ll apply with the Department of Health Services.
- Check with your local governments for licenses and permits you may need locally.
How Much Does a Business License Cost in Arizona?
License and permit fees vary. A transaction privilege license, for instance, costs $12 per location in Arizona, while forming an LLC costs $50.
Do Licenses and Permits Have to Be Renewed?
Some licenses and permits need to be renewed annually. For example, Arizona’s transaction privilege tax license must be renewed annually.
Check with issuing departments for renewal requirements for other licenses and permits.
Obtaining licenses and permits is a critical step when starting an LLC in Arizona, so check with state and local government offices and fully comply with their requirements. If you operate without the proper licenses and permits, you could face steep fines or even the closure of your business.
If you’re unsure of state or local regulations and need help, consult a business attorney, as proper licensing is an absolute must.