How to Start a Business in Arizona
Everything you need to form your Arizona LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Arizona offers a cost-effective foundation for starting a business. Forming an LLC costs just 50 dollars in filing fees, and the state imposes no annual report requirement or recurring Corporation Commission fees. Arizona's flat 2.5 percent personal income tax is the lowest flat rate among states that levy one, and the corporate income tax is 4.9 percent of net income or 50 dollars, whichever is greater, with no additional corporate franchise tax.
This guide covers every step of starting an LLC in Arizona, from choosing your business structure through registering for taxes and obtaining necessary licenses.
Choosing Your Arizona Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Arizona small businesses.
| Entity Type | Liability Protection | Taxation | Arizona Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $50 | Arizona levies no LLC franchise tax and no annual report... | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $60 | $45 Annual Report (for-profit corporation) | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Arizona Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Arizona Corporation Commission, Corporations Division database. Reserve for $10 (120 days).
- 3
Appoint a registered agent
Must have a physical Arizona street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization (Form L010, instructions L010i) ($50) or Articles of Incorporation (for-profit), filed together with a Certificate of Disclosure ($60) with the Arizona Corporation Commission, Corporations Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Arizona Department of Revenue. State sales tax rate: 5.6% combined state rate on retail and most other taxable classifications (5.0% under A.R.S. 42-5010(A)(1) plus a 0.6% education rate increment under A.R.S. 42-5010.01, in effect through June 30, 2041). County and city rates apply on top of this..
- 7
Get required licenses and permits
Arizona issues no single general statewide business license.
- 8
Register for Arizona taxes
Personal income tax: 2.5% flat rate on Arizona taxable income for all income levels and filing statuses, for tax year 2023 and beyond.
How Much Does It Cost to Start a Business in Arizona?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Arizona Corporation Commission, Corporations Division) Required | $50 | About 9 to 11 business days for regular processing and 2 to 4 business days for expedited processing, per the... |
| Corporation filing fee Required | $60 | If forming a corporation instead |
| Annual report | $0 | Not required in Arizona |
| Name reservation | $10 | 120 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Arizona issues no single general statewide business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $50 to $350 |
Start a Specific Business in Arizona
Arizona Business Guides
Formation & Entity Types
- How to Use the Arizona Business Center (ABC)
- How to Start an LLC in Arizona
- How to Start a Corporation in Arizona
- Sole Proprietorship in Arizona
- How to Start an S Corp in Arizona
- Arizona Series LLC
- Arizona Foreign LLC Registration
- How to Start a Nonprofit in Arizona
- How to Dissolve an LLC in Arizona
- Arizona LLC Operating Agreement
- Arizona Articles of Organization
- Arizona LLC Publication Requirement
Licenses, Permits & Registrations
- Doing Business on Tribal Land in Arizona
- Arizona Business License
- Arizona Annual Report
- Arizona Contractor License (ROC)
- Arizona Trade Name Registration (DBA)
- Arizona Business Name Search
- How to Get an EIN in Arizona
- How to Get a Resale Certificate in Arizona
- Arizona Home-Based Business Laws
- Arizona Certificate of Good Standing
- Arizona Food Handler Card
- Arizona Hemp, Delta-8 and Cannabis Laws for Businesses
- Arizona Liquor License Guide
- Arizona Occupational License Guide
- Arizona Cottage Food Law
Taxes & Compliance
- How to Get an Arizona TPT License
- Arizona Transaction Privilege Tax (TPT) Explained
- AZTaxes Guide
- Arizona Prime Contracting Tax
- Arizona Payroll Taxes
- Arizona Business Taxes Explained for New Owners
- Arizona Workers' Compensation
- Arizona LLC Taxes
- Arizona Employer Registration
- Arizona Minimum Wage and Paid Sick Time for Employers
- Arizona Income Tax Rate
- Arizona Sales Tax Rates by City
- Arizona Tax ID Numbers
Costs, Money & Services
- How Much Does It Cost to Start a Business in Arizona
- Best LLC Services in Arizona
- Arizona Registered Agent
- Arizona Business Insurance Requirements
- Arizona Small Business Grants, Loans and Funding Programs for 2026
- Arizona LLC Cost
- Arizona Commerce Authority Programs, Tax Credits and Incentives for New Businesses
Why Start a Business in Arizona?
- Arizona LLC formation costs 50 dollars for Articles of Organization, one of the lower state formation fees in the country.
- Arizona LLCs file no annual report and pay no annual Corporation Commission fee, so the recurring state maintenance cost is 0 dollars.
- Personal income is taxed at a flat 2.5 percent for all income levels, the lowest flat income tax rate among states that levy one.
- The corporate income tax is 4.9 percent of net income or 50 dollars minimum, and Arizona levies no corporate franchise tax based on net worth.
- Arizona's economy produced 598.2 billion dollars of current-dollar GDP in 2025, the 15th largest of the 50 states.
- The state population reached 7,582,384 as of July 1, 2024, and Phoenix alone had 1,673,164 residents, the largest state capital in the United States by population.
Arizona Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Arizona?
- An Arizona LLC takes about 9 to 11 business days with regular processing or 2 to 4 business days with expedited processing.
- What does it cost to start an LLC in Arizona in the first year?
- The filing fee for Articles of Organization is 50 dollars. Arizona LLCs do not require annual reports, so you have no recurring Corporation Commission fees. If your business requires sales tax, you will need a Transaction Privilege Tax license for 12 dollars per location.
- Can a non-resident form an LLC in Arizona?
- Non-residents can form an Arizona LLC. There are no residency requirements in the Articles of Organization filing process.
- What is the cheapest way to start an LLC in Arizona?
- The cheapest way is to file your Articles of Organization using regular processing for 50 dollars. This avoids additional expedited or accelerated service fees.
- Is an operating agreement required?
- Arizona does not require an operating agreement to form an LLC. The only filing required with the Arizona Corporation Commission is your Articles of Organization.