How to start a business in Arizona in 14 steps (2025 guide)

Becoming a business owner is a rewarding endeavor that allows you to turn your passion into a livelihood and make a lasting impact on your community. If you’re thinking of starting your entrepreneurial journey in Arizona, the state provides a supportive business environment and competitive tax rates to help your business thrive.

Ready to start a business in Arizona? This comprehensive how-to guide will walk you through the process of getting your venture up and running in the Grand Canyon State, from selecting the right business structure to setting up a business bank account.

Why start a business in Arizona in 2025?

Arizona isn’t just known for its sunshine and warm weather. It’s also a fantastic place to launch a business. Arizona offers a low flat corporate income tax rate of 4.9%, which is one of the most competitive in the nation. Additionally, the state has a flat income tax of 2.5%, meaning business owners and employees alike can keep more of what they earn.

In September 2024, Arizona secured a $7.9 million grant from the U.S. Department of the Treasury to help small businesses grow and hire. This grant supports underserved and very small businesses by connecting them with the resources they need to thrive — e.g., capital, accounting, and legal services.

Arizona is also committed to supporting women, rural, and minority entrepreneurs through programs like DreamBuilder and Moonshot. These initiatives offer training, mentorship, and bilingual resources to help small businesses succeed.

Here are the topics we’ll cover in this step-by-step guide: 

• 14 steps to starting a business in Arizona
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity
• Step 5: Secure funds: Arizona small business funding, loans, and grants
• Step 6: Choose your Arizona business name and Arizona DBA
• Step 7: Pick a business location in Arizona
• Step 8: Find an Arizona registered agent 
• Step 9: Get an Arizona EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Arizona 
• Step 11: Register for your business license and permits in Arizona
• Step 12: Secure insurance for your Arizona small business 
• Step 13: Prepare to pay taxes on your business in Arizona
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions

14 steps to starting a business in Arizona

Whether you’re planning to open a small car repair shop in your hometown of Phoenix or relocating to Yuma to start an accounting or consulting business, the state is a thriving hub of small businesses and corporations alike. Let’s go through step-by-step how you can start your business in Arizona and provide small business resources and tailored insights along the way.

Step 1: Decide what type of industry is best for your business 

Pick the right industry for your goals and needs. Maybe you have a specific skill you want to offer to others, or you’re looking for new products and services to fill a niche in your Arizona community. Consider your interests, skills, and demand for that specific market. Be sure to contact your local chamber of commerce and research trends to identify service or product gaps in your area. 

Need help getting started? Explore various small business ideas for inspiration.

Step 2: Conduct industry research 

Identifying a general concept is a great start, but you’ll also need to understand the competitive landscape in which you plan to operate. If you want to start a tourism outfit in a rural part of the state or a small spa in the Scottsdale or Tucson areas, make sure you identify a target market, conduct a competitive analysis, and determine the unique potential you bring to your industry.

Step 3: Create a business plan

Craft a detailed business plan, as this will be your guide to success. You can use this plan to attract investors, secure a loan or grant, identify your target market, lay out market strategies, create financial projections, and set benchmarks and goals for your business's success. 

Include the following information in your business plan:

• Executive summary: Summarize your business concept, objectives, and key goals in a clear, compelling manner.
• Company description: Outline your business’s mission, vision, history, and core objectives.
• Market research and potential: Examine your target audience, industry landscape, and emerging trends to demonstrate growth potential.
• Competitive analysis: Evaluate the strengths and weaknesses of competitors and identify what sets your business apart.
• Products and services: Detail your products or services and emphasize their value and benefits to your customers.
• Marketing and sales: Outline your approach for attracting, engaging, and retaining customers.
• Business financials: Provide detailed financial projections, including expected revenues, expenses, and cash flow statements.
• Management and leadership: Introduce your leadership team, showcasing their skills, qualifications, and contributions to the business.
• Funding request: Specify the amount of funding you’re seeking, along with a breakdown of how you use it.
• Appendix: Include relevant materials, such as detailed market research, financial records, or legal documentation, in an appendix.

Don’t rush this process. Your business plan is a tool for you to stay focused, make informed decisions, and measure progress as your business grows. A free business plan template can help you get started. You can also contact the Arizona Small Business Development Center for extra guidance.

Step 4: Choose your business entity: Types of business entities in Arizona

Arizona recognizes several business entity structures, each offering varying degrees of liability protection, tax implications, and formation processes. These include: 

Sole proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.  

General partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation 

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited liability company (LLC)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

Step 5: Secure funds: Arizona small business funding, loans, and grants 

Figure out how to get the funds to launch or grow your small business. When you're starting a business in Arizona, there are many costs to consider, including the $50 filing fee for LLCs and the $60 filing fee for corporations. While Arizona doesn’t require a general state business license, you might still need specific licenses or permits depending on your location and what type of business you’re running. Don’t forget about marketing expenses like building a website and running ads because these costs can add up quickly. There’s also technology, equipment, and inventory cost, which will vary based on what kind of business you're starting.

Luckily, several financing options are available, from using your own savings to small business grants.

Also, consider state-specific funding options, including:

Arizona Commerce Authority

The Arizona Commerce Authority offers programs that provide holistic support to entrepreneurs and small business owners. 

Arizona State Small Business Credit Initiative

The Arizona State Small Business Credit Initiative (SSBCI) provides financial assistance through participating lenders.

Arizona Microloan Business Program

The Arizona Microbusiness Loan Program supports the state’s smallest businesses — those with five or fewer employees — by providing low-interest loans ranging from $2,000 to $50,000.

Step 6: Choose your Arizona business name and Arizona DBA

Choose a memorable business name, and check availability on the Arizona Secretary of State's website to ensure the name complies with Arizona’s business naming requirements. Your brand identity lets your potential customers or clients know who you are and what you offer. 

DBA stands for Doing Business As, and it allows your company to operate under a name different from its legal name. DBAs are known as “trade names” in Arizona. Why exactly? They allow you to create a brand with a more descriptive name — i.e., a fictitious business name — than that of your legal business name. A DBA isn’t mandatory in Arizona, but you’ll need one if you have multiple businesses under a single entity or you don’t want to use your legal name in a sole proprietorship. 

Filing a fictitious business name or DBA

File a DBA online or via mail for a nominal $10 fee through the Arizona Secretary of State’s office. You can also file in person at the State Capitol Executive Tower in Phoenix or at the Secretary of State office in Tucson.

Step 7: Pick a business location in Arizona

Choosing the right place is a key step that impacts every aspect, from customer accessibility to operational costs. Arizona’s cities and counties have zoning ordinances, and licenses and permits may vary depending on jurisdiction, so be sure to visit your municipal and county websites before you sign a lease. 

Running a business from home could be another option to consider. It can help save on overhead costs such as rent, utilities, and commuting.

If you’re looking for space in a metropolitan area, you’ll want to keep the following considerations in mind: 

Phoenix

Phoenix is a bustling hub for tech-based industries, with major corporations like Intel and Honeywell calling it home. However, the cost of living and commercial rental rates are higher in this metropolitan city, so it may not be the best option if you're working with a limited budget. On the plus side, Phoenix boasts a well-developed infrastructure with interstates and a major airport, making it ideal for businesses that depend on logistics or transportation.

Tucson

Tucson is a fantastic option if your business is in bioscience or aerospace. The University of Arizona’s College of Medicine draws talented professionals, while Raytheon’s aerospace operations create opportunities for contractors and consultants. Tucson’s vibrant downtown also offers a lively arts and music scene, which boosts restaurants, shops, and tourist spots. Plus, it’s generally more affordable than Phoenix.

Scottsdale

If you plan to cater to a luxury clientele, Scottsdale is the place to be. Known for its affluent residents and high-end visitors, the city is a haven for upscale boutiques and luxury service providers. Whether you’re offering premium products or services, Scottsdale’s market is full of opportunities to connect with big-spending customers.

Step 8: Find an Arizona registered agent

Registered agents in Arizona are referred to as Statutory Agents. This individual or service accepts legal documents like lawsuits and important government notices on your behalf. Your statutory agent must have a physical address in Arizona, and every corporation or LLC is required to both appoint and maintain a statutory agent. Anyone, including yourself, can be the statutory agent for your Arizona business, provided you reside in Arizona, are over the age of 18, and have a domestic corporation or LLC—or a foreign one with authorization to do business in the state.

If a business fails to maintain a registered agent, that business will be administratively dissolved. You or your agent can easily register online by following these instructions.

Step 9: Get an Arizona EIN and file your tax and employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although Arizona doesn't require a state EIN, you'll need one to file payroll taxes and federal tax returns, open a business bank account, and apply for loans. You can apply for a free EIN through the IRS website.

Step 10: Register as a small business in Arizona

When registering your small business in Arizona, you’ll need to first determine your business structure, which will dictate everything else—from naming your business to opening a bank account, getting your federal tax ID number, or EIN, and applying for permits and licenses. Here are some considerations when registering your Arizona business based on its structure. You also must submit your business formation document to the Arizona Corporation Commission (ACC).

Step 11: Register for your business license and permits in Arizona

You’ve obtained all the necessary registrations for your business, but before you open your doors for business, you need to make sure you have all the necessary licenses and permits in the state of Arizona and in your county or municipality. 

Do you need a business license in Arizona?

There’s not an overarching state license requirement, but you will need to take the following steps to ensure you have the proper licensing and permitting for your location and industry: 

• If you’re selling products or services subject to state sales taxes, you will need a State Transaction Privilege Tax (TPT) License, which you can apply for through the Department of Revenue. You’ll also likely need a seller’s permit to collect sales tax.  
• You’ll likely need a local business license to operate in your area. Contact your city or town clerk’s office to determine what your area requires. 
• If your business involves selling or serving alcoholic beverages, you'll need a license from the Arizona Department of Liquor Licenses and Control. 
• Anyone preparing or serving food requires a food handler permit from the Arizona Department of Health Services. 
• Whether you’re a contractor, a barber, or an electrician, you’ll need a professional license to operate in the state. 

If you’re starting a business and have questions about your industry and whether you have the right permits and licensees, you can contact the Arizona License Compliance Program.

Step 12: Secure insurance for your Arizona small business

Business insurance is an added expense when starting up, but it’s a safety net that protects your company from financial losses due to unforeseen events—whether a flash flood that leaves water in your business, an automobile accident from one of your drivers, or a customer who brings forth a lawsuit. 

Types of small business insurance in Arizona

Here are the common types of coverage in Arizona:

Step 13: Prepare to pay taxes on your business in Arizona 

Arizona provides a favorable tax structure designed to give both corporations and small businesses a financial edge. Here’s a breakdown of some taxes you’ll need to be aware of when starting and operating a small business in the state. A guide to business taxes in Arizona that we will be creating>

Here are the most common taxes—and a few tax breaks—you’ll want to take into consideration, depending on your industry, location, and business size. 

State income tax

Arizona has a flat individual state income tax rate of 2.5% for all income brackets and filing statuses. The corporate income tax rate is 4.9%.

Sales tax

Arizona has a Transaction Privilege Tax, which is the state's version of a sales tax. The TPT is imposed on businesses for the privilege of conducting business in Arizona. The state TPT rate is 5.6%.

Payroll taxes

Similar to federal payroll taxes, Arizona’s taxes include: 

• State unemployment insurance tax, in which you’ll contribute to a state unemployment insurance fund that pays out benefits to unemployed workers. 
• Arizona withholding tax, where employers withhold state income tax from employee paychecks and remit it to the state.

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records.

Tax credits and incentives for Arizona employers

There are a number of tax credits and incentives for those who locate their small business in Arizona. The Quality Jobs Tax Credit offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period for each new qualifying job you create. The Qualified Facility tax credit offers a refundable income tax credit to promote the location and expansion of headquarters or manufacturing facilities. Visit the Arizona Department of Revenue for specific tax credit programs that may apply to your business or industry.

Step 14. Set up your business bank account

As a business owner in Arizona, you’ll need to keep your personal and business finances separate. When opening your bank account and setting up your business operations, keep the following in mind: 

1. Gather all your business paperwork, including your EIN, any licenses and permits, and business formation documents, to open a small business bank account. 
2. Find a bank with a physical branch nearby or a credit union that offers favorable terms, a suite of loan products, bill pay services, and reasonable transaction fees. 
3. Establish your business credit by opening a credit card and using it for business-related purchases and expenses. 
4. Set up a bookkeeping system by finding the best right accounting software for your firm or business. 
5. Hire a professional accountant who can help you with financial goals, tax filings, and other bookkeeping services.

Additional resources to get your business started 

There are several state and federal resources that can support your business with guidance, training, potential funding and more. 

State resources

Arizona Commerce Authority (ACA): ACA provides small businesses with mentorship, workshops, and funding options.

Arizona Small Business Development Center (AZSBDC): AZSBDC offers free counseling, training, and help with accessing capital. With over ten locations across the state, AZSBDC offers personalized support for everything from creating a business plan to understanding local regulations.

Arizona Manufacturing Extension Partnership (AZ MEP): AZ MEP helps manufacturers in Arizona improve productivity, reduce costs, and enhance overall competitiveness. They offer consulting and training programs tailored to small and medium-sized manufacturing businesses.

DreamBuilder: Dreambuilder helps women and underserved entrepreneurs gain critical business skills. They offer online training and in-person classes focused on areas like financial planning and marketing.

Federal resources 

Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.

Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies. 

SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.   

U.S. Department of Agriculture (USDA): The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America.

Frequently asked questions

How long does it take to start a small business in Arizona?

A few weeks to several months, depending on your timeline and the filing of all your business paperwork, permits, and licenses. 

Does my Arizona small business have to collect sales tax?

Yes. If your business sells products or services in the state, you’ll pay a Transaction Privilege Tax, which is similar to sales tax. Learn more about TPT on the Arizona Department of Revenue website. 

Do I need a local business license if I only operate online in Arizona?

If your business is online only, you may still need local business licenses, depending on city or town rules. Check with local authorities to make sure you’re following the requirements.

Disclaimer: 

This content is for information purposes only and information provided should not be considered legal, accounting or tax advice or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does it have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.