Starting a service business in Arizona

Form your business in Arizona

File Articles of Organization with the Arizona Corporation Commission (A.C.C.), most easily online through the Arizona Business Center. The fee is $50, or $85 with expedited processing, per the A.C.C. LLC fee schedule (revised March 2026) as listed in October 2026. Staff examine each filing and send an approval letter with further instructions. Depending on the county where the business or its statutory agent is located, the A.C.C. may tell you in that letter that your filing has to be published in a newspaper of general circulation, so read the letter before assuming you are done. A name reservation is optional ($10 for 120 days).

Ongoing state filings

None for LLCs. The A.C.C. states that LLCs are not required to file annual reports; only corporations are, at $45 a year for a for-profit corporation. Keep your statutory agent and addresses current with a Statement of Change ($5 as listed in October 2026), because the A.C.C. can administratively dissolve a business that fails to meet statutory requirements.

Using a business name (DBA)

The A.C.C. does not register DBAs. Trade names are filed with the Arizona Secretary of State: the online Trade Name Registration Application is $10 as listed in October 2026 and lasts five years, renewable for another $10. The Secretary of State notes that a trade name is not legally required and does not grant exclusive rights to the name. Maricopa County residents can also record a DBA with the County Recorder.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

Arizona licenses contractors through a single agency, the Registrar of Contractors (ROC). Under A.R.S. § 32-1151 it is unlawful to act as or bid as a contractor without an ROC license unless an exemption applies, and § 32-1102 sorts licenses into residential, commercial and dual classes for general and specialty work; specialty classes cover individual crafts, so check the ROC's classification list for your trade. The handyman exemption in § 32-1121 covers casual or minor work under $1,000 per project, labor and materials included, and it is lost if the job needs a building permit, is split to stay under the limit, or is advertised without the words "not a licensed contractor". People who only do lawn, garden, shrub and tree maintenance are exempt as gardeners. Cities also license businesses for their own tax and occupational purposes.

• Arizona Registrar of Contractors: Residential, commercial and dual contractor licenses for general and specialty trades, including the handyman exemption
• Arizona Department of Revenue: Transaction Privilege Tax: State TPT license for taxable business activities, including prime contracting

Workers' compensation

Under A.R.S. § 23-902, every person who employs any workers regularly employed in the same business is subject to Arizona's workers' compensation law, and "regularly employed" includes seasonal or part-year work in your usual trade. Domestic servants are the main exception. Section 23-961 lets you secure coverage only by buying a policy from a carrier authorized by the Department of Insurance and Financial Institutions, or by proving to the Industrial Commission that you can self-insure or belong to an approved pool. Watch your subcontractors: § 23-902(B) can treat a contractor you supervise or control, and that contractor's employees, as your employees, and subsection D sets out the written agreement terms that create a presumption of independent contractor status.

More on coverage: business insurance for contractors.

Sales tax on services

Arizona's transaction privilege tax (TPT) is a tax on the vendor for the privilege of doing business, and the Department of Revenue says various business activities are subject to it and must be licensed; each state license location costs $12 as listed in October 2026, and cities may require their own license. For contractors, the Department splits work into MRRA (maintenance, repair, replacement or alteration of existing structures) and modification. If all your work is MRRA, you pay tax on materials when you buy them, do not need a TPT license, and do not add tax to the customer's invoice. Modification work, including new construction and alterations over the threshold, is taxed under prime contracting and requires a TPT license.

Recording business calls in Arizona

A.R.S. § 13-3012(9) exempts any interception made with the consent of a party to the communication, so you may record calls you are on. Section 13-3005 makes it a felony to intercept a call you are not part of without a party's consent. Callers in all-party states may still expect notice; our recording guide explains the safe script.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Desert summers drive Arizona service work: air conditioning repair and pool service peak from May through September, when roof and attic jobs in Phoenix and Tucson get pushed to early mornings. The monsoon from mid June through September brings dust storms, flash flooding and wind damage, then a rush of cleanup, roofing and tree calls. Winter is the high season for exterior painting, landscaping installs and handyman work in the low desert, while Flagstaff and the high country see real snow.

The "not a licensed contractor" ad rule

If you rely on the handyman exemption, A.R.S. § 32-1121(A)(14)(c) says the exemption does not apply to anyone whose advertising fails to include the words "not a licensed contractor", and subsection C says that person is subject to prosecution under A.R.S. § 44-1522, the state's consumer protection statute on deceptive practices, with the Attorney General able to investigate. That covers your website, truck, yard signs and online listings, so put the words on every one.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Arizona questions