From Idea to LLC and in between

In Arizona, businesses that do not require a Transaction Privilege Tax (TPT) license generally include those with under $10,000 in annual gross income (if the operator is under 19), entities selling exclusively through a Marketplace Facilitator (like Amazon or Etsy), certain agricultural producers, and non-profits. Additionally, long-term residential rentals (30+ days) no longer require a city TPT license. 

Arizona Department of Revenue (.gov) +5

Key Exemptions and Non-Licensure Scenarios:

• Marketplace Sellers: If you sell products only through a marketplace facilitator that collects and remits tax on your behalf, you are not required to hold a TPT license.

• Youth Businesses: Effective Sept. 14, 2024, individuals under age 19 with a business grossing

•   per calendar year are exempt.

• Agricultural Producers: Farmers and gardeners selling their own food products directly to consumers.

• Casual Activity/Small Scale: Generally, if your activities do not fall under taxable categories (retail, restaurant, amusement, lodging, etc.) and you have minimal income, you may not need one. Note: Personal services like consulting, cleaning, or pet sitting usually do not need a state TPT license.

• Tax-Exempt Organizations: Certain non-profits, government agencies, and qualifying healthcare facilities.

• Exempt Goods: While sellers of taxable goods need a license, businesses selling only tax-exempt items (e.g., specific prescription drugs, certain medical devices) may not need one. 

Important Changes:

• Residential Rental (30+ Days): As of Jan. 1, 2025, residential property owners do not collect/remit city TPT, though they must still register with the county.

• Out-of-State Sellers: If you have no physical presence and sell less than into AZ, you may not need a license. 

Disclaimer: TPT requirements can be complex based on location and specific activity. Check with the Arizona Department of Revenue for your specific case.