How to Start an Online Business in Arizona: TPT, Economic Nexus and City Licenses

Starting an online business in Arizona is mostly a paperwork exercise, and the paperwork is manageable once you know the order. The mistake most new online sellers make is skipping the tax license they actually need, then finding out during a marketplace onboarding check or a state review. This guide covers how to start an ecommerce business in Arizona, from forming your entity to registering for sales tax, checking city rules and understanding when out-of-state sellers have to register.

Arizona does not issue a general state business license. The license most online sellers need is a Transaction Privilege Tax (TPT) license from the Arizona Department of Revenue (ADOR). Depending on your structure and location, you may also need a trade name registration and a city business license.

What you need before you start

Collect these items before you open any state portal. The forms repeat the same details, and a mismatch between your entity filing and your tax registration causes avoidable delays.

• A business name you have checked in the Arizona Corporation Commission business search.
• A physical business address. If you work from home, plan to use your home address on your TPT license.
• A statutory agent with an Arizona address. An individual agent must be a permanent, full-time Arizona resident.
• Your Social Security number or federal Employer Identification Number (EIN).
• A payment method for the state fees listed below.
• Your product list and an estimate of how much you sell to Arizona customers.
• Sales records for the current and prior calendar year if you already sell online.

Step 1: Form your entity with the Corporation Commission

Most one-owner online sellers form a limited liability company (LLC). You file Articles of Organization (Form L010) with the Arizona Corporation Commission, Corporations Division, through the Arizona Business Center. The filing fee is $50.

Your LLC name must contain 'limited liability company' or 'limited company', or the abbreviations L.L.C., L.C., LLC or LC. It must not contain 'association', 'corporation', 'incorporated' or an abbreviation of those words. It must also be distinguishable from existing entity names, reserved names and registered trade names on the record. If you want to hold a name while you prepare the filing, a name reservation costs $10 and lasts 120 days. Names that include banking or trust terms, such as bank or trust, need prior written approval from the Arizona Department of Financial Institutions.

Speed costs extra. Expedited review adds $35 to the regular fee, bringing the Articles of Organization to $85 total. Accelerated service is an additional charge on top of the filing fee: $100 for next day (received by 5 p.m.), $200 for same day (received by 10 a.m.) and $400 for two hour service (available 8 a.m. to 3 p.m.). Accelerated service guarantees examination within the stated window, not approval, so a fast filing still has to be correct.

Regular processing has run about 9 to 11 business days, and expedited processing about 2 to 4 business days, according to the Corporations Division processing times sheet posted as of December 29, 2025. Check the current sheet before you set a launch date, because these times change.

Every LLC must keep a statutory agent on record at all times. The agent can be an individual with a permanent Arizona address or an entity authorized to transact business in Arizona, but an LLC cannot serve as its own agent. The agent must accept the appointment in writing on Form M002. If the LLC loses a valid agent or address, it risks administrative dissolution under A.R.S. 29-3708. Changing the statutory agent or principal address costs $5 for an LLC.

Two more LLC points matter for planning. First, an Arizona LLC must publish notice unless its statutory agent's county is Maricopa or Pima, so confirm the publication requirement and its cost with the Corporation Commission before you file. Second, Arizona LLCs do not file annual reports, and there is no LLC annual report fee at the Commission. That means no recurring state filing cost to keep the LLC in good standing. Only corporations file annual reports.

If you choose a corporation instead, the Articles of Incorporation cost $60 and are filed together with a Certificate of Disclosure. For-profit corporations file an annual report each year for $45, due in the corporation's anniversary month on the date the Commission assigns (A.R.S. 10-1622). Most online sellers do not need a corporation, so talk to a CPA before you choose one.

Step 2: Register a trade name if you sell under a different name

If your storefront name differs from your LLC's legal name, register that name as a trade name with the Arizona Secretary of State, Business Services Division, at azsos.gov/business/tntm. Trade name registration is optional in Arizona and is separate from the Corporation Commission filing. The trade name fee is not confirmed, so confirm the current amount on that page before you pay.

A domain name is not a trade name registration. Buying a domain does not create a state record of the name, so search both the Corporation Commission records and the Secretary of State's trade name records before you put the name on your checkout pages.

Step 3: Get a TPT license from the Department of Revenue

This is the step online sellers most often skip. An online-only seller that makes retail sales in Arizona still needs a TPT license for those sales (A.R.S. 42-5061). The license costs $12 per location as of 2026. You register through ADOR's AZTaxes portal, which you can reach from the ADOR TPT license page. If you have no storefront, ask ADOR how to list your business location on the application.

If you run the business from home, use your home address on the license. Before you register, check your county and city zoning rules. A home business can be permitted under zoning and still face limits on signs, employees, customer visits or deliveries, so read your local code rather than assuming the activity is allowed.

The state combined rate on retail sales is 5.6 percent: 5.0 percent under A.R.S. 42-5010(A)(1) plus a 0.6 percent education rate increment under A.R.S. 42-5010.01, in effect through June 30, 2041. County and city rates apply on top of the state rate. Do not copy a rate from another seller's page. Confirm the rates that apply to your sales with ADOR.

Step 4: Check county and city requirements

Arizona counties issue no general business license, so the local question is about your city. Many cities require their own business license or a local TPT license on top of the state license, and the rules differ from city to city. Large cities such as Phoenix, Tucson, Mesa, Gilbert, Chandler, Scottsdale and Glendale each set their own requirements, so do not assume a neighboring city's answer applies to yours.

Contact the city clerk or licensing office for the address where your business is based and ask a specific question: does an online-only retail business at this address need a city business license or a city TPT license? Get the answer in writing and keep it with your formation records.

Two other categories have their own agencies. Regulated professions have separate board licensing. If you install, repair or build anything for customers, the Registrar of Contractors licenses contractors, and that is a separate question from your TPT license. Ask the Registrar before you take that work.

Step 5: Understand economic nexus if you sell from outside Arizona

Economic nexus can require an out-of-state seller to register in Arizona even with no office, employee or inventory here. Under A.R.S. 42-5044, a remote seller has economic nexus when its sales to Arizona customers are above $100,000 in the current or prior calendar year. The threshold was $200,000 for 2019 and $150,000 for 2020, so older articles may quote a figure that no longer applies.

Only sales not facilitated by a marketplace count toward the threshold. If you sell only through your own website, every Arizona sale counts. Sales made through a marketplace that facilitates them do not count toward your total. Keep separate sales records for each channel from the first day you sell, because you will need them to show which total applies.

When you cross the threshold, register through ADOR's AZTaxes portal. Ask ADOR when registration is due after you cross the line, and ask your CPA how to handle the year in which you cross it.

Step 6: Handle marketplace sales correctly

Under A.R.S. 42-5043, a marketplace facilitator that sells on a seller's behalf is liable for the tax on those sales. That reduces your collection burden on marketplace orders, but it does not remove your own obligations. You still hold your own TPT license for direct sales, such as orders from your website, and you still need to report those sales accurately.

Step 7: Plan for income tax

Arizona's individual income tax is a flat 2.5 percent for all income levels and filing statuses, for tax year 2023 and beyond. An LLC is generally a pass-through entity, so its profit flows to the owners' personal returns and is taxed at that 2.5 percent rate. An LLC that elects corporate treatment instead pays corporate income tax of 4.9 percent of net income or $50, whichever is greater (A.R.S. 43-1111). Arizona has no corporate franchise tax based on net worth.

Fee summary

Item	Cost	Agency
LLC Articles of Organization	$50	Corporation Commission
Expedited review (added to the filing fee)	$35 more, $85 total	Corporation Commission
Accelerated service (added to the filing fee)	$100 next day, $200 same day, $400 two hour	Corporation Commission
Name reservation (120 days)	$10	Corporation Commission
Statutory agent or address change (LLC)	$5	Corporation Commission
Corporation Articles of Incorporation	$60	Corporation Commission
Corporation annual report	$45	Corporation Commission
LLC annual report	None required	Corporation Commission
Trade name registration	Confirm on the agency page	Secretary of State
TPT license (per location)	$12	Department of Revenue
City business or TPT license	Varies by city, confirm with the city	City

Common mistakes to avoid

• Skipping the TPT license because you sell online. Retail sales made in Arizona still require a TPT license.
• Looking for a state business license. Arizona has none. Your state obligation is the TPT license, and your city may add another.
• Registering a home address without checking zoning. Your home address appears on the license, and zoning rules apply to that address.
• Assuming the city does not require a license. Confirm the answer for your address and keep it in writing.
• Forgetting out-of-state nexus. A seller outside Arizona with more than $100,000 in Arizona sales needs to check its registration obligation.
• Mixing marketplace and direct sales in one spreadsheet. You need them separated to count toward the threshold correctly.
• Using a restricted word in an LLC name. Words such as 'corporation' or 'incorporated' are not allowed in an LLC name.
• Letting the statutory agent lapse. A missing agent or address can lead to administrative dissolution (A.R.S. 29-3708).
• Paying for an LLC annual report. Arizona LLCs do not file one with the Commission. Some compliance sites market annual report services, so check the Corporation Commission before you pay for one.

What you should have when you finish

If you complete these steps, you should expect to have an entity on file with the Corporation Commission, a TPT license registered through AZTaxes for your business location, a written answer on your city license requirement, and sales records that separate direct and marketplace orders. These steps may help you launch on schedule. Actual timing depends on agency processing, the accuracy of your filings and the answers you receive from your city.

Your order of operations

1. Check your business name, then file the LLC or corporation with the Corporation Commission.
2. Register a trade name if you will sell under a name other than your legal name.
3. Register for a TPT license through AZTaxes before your first retail sale.
4. Get written confirmation from your city on its business license requirement.
5. Track sales by channel and by state, and recheck the $100,000 threshold each year.

Important information

This article is informational only. It is not legal or tax advice. The figures and rules described here were checked against official sources, but Arizona laws, fees and processing times change. Confirm current requirements with the agency named in each step before you file or pay. For complex situations, such as sales in multiple states, unusual marketplace arrangements, or the choice between LLC and corporation tax treatment, consult a qualified attorney or CPA.