Starting a Business in Arizona
Legal requirements, licensing, and tax considerations for starting as an Arizona entrepreneur
Starting a Business in Arizona
Your complete legal guide to establishing your business in the Grand Canyon State
Why Arizona for Business?
Arizona offers numerous advantages for entrepreneurs:
on business equipment
Competitive business environment
Quick and efficient process
1 Choose Your Business Structure
Your business structure affects taxes, liability, and operational requirements.
Sole Proprietorship
LLC (Recommended)
2 Register Your Business Name
Name Availability Search
Ensure your desired name isn't already taken
Submit to Arizona Secretary of State online only
Fee: $10 (covers both sole proprietorships and partnerships)
Valid for 5 years, then must be renewed
Arizona Employment Laws (2025)
Key Requirements
(effective January 1, 2025, adjusted annually)
Transaction Privilege Tax (TPT)
Must register within 15 days of starting business
New 2024 Exemption:
Persons under age 19 may operate a business without a TPT license if their business does not generate more than $10,000 in gross income annually.
Tax Deductibility of Payment Processing Fees
General Rule
Payment processing fees are typically fully deductible as ordinary and necessary business expenses under IRS guidelines, as they're directly related to generating business income.
How to Categorize These Fees
Option 1: Business Services/Software
Option 2: Credit Card Processing Fees
Accounting Treatment
Method 1 (Gross Recording)
Method 2 (Net Recording)
Important Considerations
Documentation Required:
Quick Action Checklist
Important Legal Notice
This guide provides general information about business formation in Arizona and should not be considered legal advice. Business laws and requirements can change, and every situation is unique. Please consult with qualified professionals including attorneys, accountants, and business advisors before making important business decisions. Information is current as of January 2025.