When starting a business in any state, you are required to acquire a handful of licenses and permits that allow you to conduct business in a legal fashion. These licenses can be local, state or federally regulated. It is crucial for you to be aware of all such requirements before you indulge in the process of setting up a business. From registration of your business to getting an EIN and a seller’s permit, a lot goes into setting up your business. And the same applies to the state of Arizona.
In this article, we’ll pay particular attention to Arizona Seller’s Permit, how your business can apply for it and what are the basic requirements to do so.
Let’s get started.
Applying for an Arizona Sellers Permit
Like other states, Arizona also requires wholesale and retail businesses to apply for certain permits before conducting sales. However, while multiple states refer to such a license as the seller’s permit, Arizona mandates the Transaction Privilege Tax (TPT) license.
Any person who wishes to engage in business in the state and intends to sell a product or a service must apply for a TPT.
How to Apply for an Arizona Sellers Permit?
Every state has its own application form that you must fill to get a sellers permit. In Arizona, you have to apply for privilege tax, use tax and Employer Withholding and Unemployment Insurance with the Arizona Joint Tax Application (JT-1).
While you can visit the government offices manually, an online mode is recommended for fast and efficient filing.
There are 3 major ways of applying for the TPT permit in Arizona.
Apply Through Online Registration
In this case, the legal business owner must go to AZtaxes.gov and register their account. Once you’ve registered your account, you’ll be required to fill a form online and provide the following information.
- The Federal Employer Identification Number or Social Security Number(If you’re a sole proprietor without employees)
- Specify the type of organization and ownership of the business
- The legal business name, phone number, email address and fax number
- Description of the business (Information about major taxable business activities, products produced or sold and services performed)
- The NAICS code and business code
- Date on which the business started and the sales began
- Your estimated tax liability and filing frequency
- The physical location where your tax records are located
- The “Doing Business As” name and the Legal Business Name if they differ
You can pay for the license online. This is the fastest way of applying for an Arizona sellers permit and will require approximately 3-5 business days before you receive your license.
Mailing the JT-1 Form
This is the second option you can opt for when applying for an Arizona sellers permit. You will have to download the form, fill it and mail it to the address specified in the form.
The process may require a few days till the mail is received by the authorities (depending on where you’ve sent it from) and 3-5 business days as the processing period.
Submitting the JT-1 Form in Person
In this case, the legal owner must be present at the office while the license is being filed and signed. In case of a sole proprietorship, the owner must sign the license, in case of a partnership, any one of the partner’s signatures shall work. For a corporation, an organization, an LLC or trust, the signature of at least one financial corporate officer is necessary. If a married couple owns a business together, both of their signatures are mandatory.
Applying for the seller’s permit can be hasslesome enough. You’re required to submit the right documents and the right number of copies, have the signatures of legal owners on the application as well as the EIN number and so much more.
From determining whether you need to apply for the license, to gathering all the documents, filing them and getting them approved from the state- the process can be completed without hassle, with the help of online service providers.
Here are 3 simple steps in which service providers can help you:
This part requires you to make an account on the website, answer some questions about your business and provide digital copies of your documents. Depending on the state you’re applying for, they’ll dig up all the details of what is required and get the process running.
File Your Documents for You
Once you’ve registered online and provided all crucial pieces of information, they’ll help you file your application properly.
Receive Your Seller’s Permit
And just like that, you’ll receive your copy of the seller’s permit (TPT license). While you take care of other more crucial things while setting your business, the service providers take care of getting your permits and licenses right.
Do Remote Sellers Have to Apply for a TPT?
We’re living in the era of ecommerce and the concept has taken wings to the point where a business conducts sales in different states without requiring any physical presence in that region. These remote sellers or out of state marketplace facilitators also require multiple business licenses, but aren’t governed by the same laws.
For instance, remote sellers do not require a TPT when starting a business in Arizona. This is applicable as long as:
- The business has no physical presence in Arizona
- The sales have not met the economic threshold
For out of state businesses, the threshold for sales in Arizona is set at $100,000. If the threshold is met, a remote seller will require a seller’s permit to remit tax to the state authorities. This permit is valid for a year and can be renewed for the subsequent years. The state of Arizona charges a fee of $12 for the license.
Businesses with a physical presence in Arizona must apply for a TPT, pay the standard license fee along with any municipal charges. The same law applies to marketplace facilitators with physical presence in the state.
States that are already collecting sales tax from customers are mandated to remit the taxes to the state department. That means that once you’ve started collecting the TPT, you must remit the taxes even if you cannot reach the threshold.
So on what criteria do you renew your license? If your business has garnered revenue that surpasses the threshold during the current year, you’ll have to apply for renewal.
If you’re unable to reach the threshold in the current and previous year, you can choose to cancel the license.
Other Documents Required
It is crucial to remember that an Arizona sellers permit is not the only license that is required by your business. Depending on the business that you choose to conduct, you can be subjected to varying regulations. It is always advised to learn about all such requirements prior to establishing your business to avoid any violations and criminal citations. The preferred way, for multiple new companies, is to register with online service providers like EZDocfiling to process all files on your behalf.
This will allow you to dedicate more time to your business without worrying about filing your documents. And let’s not forget, the margin of error that is bound to come down substantially.
Like most U.S states, Arizona requires all businesses dealing in the wholesale and retail of commodities as well as giving out services to apply for a Transaction Privilege Tax (TPT) license. In a majority of other states, this is the closest thing to a seller’s permit.
However, applying for one can be troublesome when you’re not well versed with the laws of the state. In such a situation, you can register with EZDocfiling and let us file your application for you.