Arizona is one of the cheapest states to form and maintain an LLC in, with a $50 filing fee, no annual report, and a flat income tax rate near the bottom of the national range. The one quirk is a decades-old newspaper publication rule that only some founders actually have to deal with. Here's what it takes to start a business in Arizona in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Arizona. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Arizona Corporation Commission, the agency that handles business filings statewide, not the Secretary of State as in most states. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Arizona by filing Articles of Organization with the Arizona Corporation Commission. The filing fee is $50, and standard processing takes about 5 to 7 business days.
Within 60 days of filing, Arizona law requires most LLCs to publish a Notice of Formation in an approved newspaper for three consecutive weeks, then file proof of publication. If your registered agent's address is in Maricopa or Pima County, the state handles this publication automatically at no extra cost. Anywhere else in Arizona, budget an extra $50 to $300 and watch the deadline.
Every LLC needs a statutory agent, Arizona's term for a registered agent, with a physical in-state address. You can act as your own agent, or hire a commercial service.
Arizona doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file with the Corporation Commission. If you're operating under a trade name, you'll register it with the Arizona Secretary of State, which handles trade name registrations separately from business entity filings.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Arizona doesn't issue a single general business license either. What you need depends on your industry and city: professional licensing for regulated fields, a Transaction Privilege Tax (TPT) license from the Department of Revenue if you sell taxable goods or services, and any local licenses your city requires. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Arizona taxes
Arizona has a flat personal income tax rate of 2.5%, one of the lowest flat rates in the country. Pass-through LLCs owe no separate franchise tax; members simply pay this flat rate on their share of profits. If your LLC elects corporate tax treatment, the corporate income tax rate is 4.9% with a $50 minimum.
Sales tax in Arizona is technically a Transaction Privilege Tax, a tax on the seller rather than the buyer, though it works the same way at checkout. The statewide rate is 5.6%, with counties and cities adding their own rates on top, pushing combined effective rates commonly to somewhere between 7.5% and 11.2%.
6. Stay compliant
This is the short section, because Arizona doesn't require an annual report for LLCs at all, one of a small number of states with that policy. Your main ongoing obligation is keeping your statutory agent information current with the Corporation Commission and filing an amendment if anything key about your LLC changes.
Arizona business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $50 |
| Publication requirement (outside Maricopa/Pima) | $50 to $300 |
| Annual report | Not required |
| Statutory agent service (optional) | $100 to $200/year |
| EIN | Free (IRS) |
| State income tax | 2.5% flat |
| State sales tax (TPT) | 5.6% + local, up to ~11.2% |
Frequently asked questions
What's the newspaper publication requirement in Arizona?
Most LLCs must publish a Notice of Formation in an approved newspaper for three consecutive weeks within 60 days of filing, though this is handled automatically at no cost if your registered agent is in Maricopa or Pima County.
How much does it cost to form an LLC in Arizona?
$50 for Articles of Organization, one of the cheapest in the country.
Does Arizona require an annual report for LLCs?
No, Arizona is one of a small number of states with no LLC annual report requirement at all.
What's the personal income tax rate in Arizona?
A flat 2.5%, one of the lowest flat rates in the country.
What's Arizona's sales tax actually called?
Transaction Privilege Tax (TPT), a tax on the seller rather than the buyer, with a 5.6% state base plus local additions.
Fees and rates above come from the Arizona Corporation Commission and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to an Arizona-licensed attorney or CPA about your specific situation.