Perhaps you are hoping to form an Arizona LLC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Arizona.
On this page, you’ll learn about the following:
Arizona LLC Cost of Filing
Here are the costs involved in forming an LLC in Arizona.
Cost of Filing Formation Certificates
The Arizona Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Arizona Secretary of State.
Arizona Domestic LLC
- Online Filing costs $50.
- Expedited Processing Fee costs $85.
- By mail: Fill out the application form, and send it to the Arizona Corporate Commission, Examination Section 1300 W, Washington Street, Phoenix, Arizona 85007.
Arizona Foreign LLC
- Registration filing costs $150.
- Expedited Processing Fee costs $185.
- By mail: Fill out the application form, and send it out to the Arizona Corporate Commission, Examination Section 1300 W, Washington Street, Phoenix, Arizona 85007.
Visit the Official Arizona Government website to check the Official Fee Schedule of Limited Liability Companies (LLCs) in Arizona.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
Arizona LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in Arizona, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the Arizona Department of Revenue for regulatory boards or agencies requiring licensing.
Like every other business entity, Arizona LLCs are also subject to State tax and filing obligations.
The Arizona State Corporate Income Tax varies between 2.5%- 4.54% (depending on the amount of income earned). Visit the official Arizona Revenue Department website to learn more about CIT.
Sales tax in Arizona is also known as Transaction Privilege Tax. Taxes vary depending upon the region. Businesses with an annual tax liability of $500 or more are required to file and pay electronically. Visit the Arizona Department of Revenue website to learn more about sales tax or transaction privilege tax.
The Arizona Federal Self-employment tax is 15.3%.
The State Employer Tax (withholding tax) is 2.9%. Visit the Secretary of State of Arizona Revenue website to get details about the tax payable.
Acquiring property for businesses in Arizona attracts a meager property tax at the rate of 0.62%. Visit the Secretary of State website to learn more about Arizona Property Tax.
Government Property Lease Excise Tax
The GPLET is paid on the basis of Size and Use of Property. The Secretary of State website provides detailed information about GPLET.
Liquor Luxury Tax
This tax depends on the type of Liquor. Visit the official Secretary of State website to understand Liquor Tax.
Tobacco Luxury Tax
The combined tax rate on cigarettes is $0.10. The Secretary of State website provides information about the Tobacco Luxury tax.
Comparison with the Neighboring States
Every state has different costs of filing for an LLC to their respective State Authorities. If you wish to gain a better understanding of the costs of opening an LLC in a different state in comparison to Arizona, read the table below:
|Online filing fee
|LLC Annual fee
|$800 + $20
|Name reservation fee
|$45 for online (including $35 for expedited processing)
When it comes to establishing an LLC in Arizona, it would not cost you a hefty amount. LLCs are the most preferred set-ups for small businesses in Arizona given their flexible nature of the ownership and inexpensive setup and maintenance costs. It has a vibrant business climate and is one of the fastest-growing states in the United States.
- Arizona Name Reservation: $45 for online filings or $10 by mail
- Doing Business As (DBA): $10 for online filing or $31.20 if filing by mail
- Certified Document Copies: $15 + $0.50 per page.
- Certificate of Good Standing: $45
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Arizona LLC: $35
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in Arizona
To maintain an LLC in Arizona you have to pay Sales tax of 4.9%, Income tax (2.5% to 4.54%), State employer tax of 2.9% and federal taxes.
While the varying costs of maintaining an LLC in Arizona primarily depend on factors such as company size, business activity, and licensing requirements, understanding the general aspects of these expenses is crucial. Firstly, formation costs include filing fees for necessary documents such as articles of organization, operating agreements, and more. These can significantly vary based on the complexity of the business and legal assistance sought. It is advisable for entrepreneurs to consult a legal professional to ensure proper formation and complete documentation.
Another crucial factor to consider is the annual reports and fees. Arizona-registered LLCs are required to submit an annual report and pay a franchise tax to the Arizona Corporation Commission. The fee for both depends on the LLC’s total assets within the state, and while it may not sound burdensome, it is essential to keep track of these administrative responsibilities to maintain good standing. Working with a qualified accountant or using professional services can greatly assist in managing these obligations on a regular basis.
Furthermore, entrepreneurs need to consider other operational costs required to sustain their LLCs. These expenses include state and federal taxes, permits necessary to conduct specific activities, as well as necessary insurance policies. Depending on the nature of the business, entrepreneurs might also need to budget for potential costs such as equipment maintenance, rents, employees’ wages, marketing efforts, and more. Business owners must take all of these ongoing costs into account to ensure the profitability and sustainability of their LLC.
Small business owners should also evaluate the cost of legal compliance, especially hiring legal professionals or consultants to address legal matters related to the functioning of the LLC. Although not obligatory in every situation, a skilled attorney can be instrumental in safeguarding the company’s interests as well as assisting in fulfilling state and federal obligations.
Moreover, keeping track of any changes in state regulations, tax codes, or compliance requirements is crucial. Businesses in Arizona and any other state need to monitor any potential modifications that may impact their annual costs. By keeping informed and adapting to such changes, business owners can navigate the ever-evolving business landscape effectively.
In conclusion, while maintaining an LLC in Arizona offers numerous benefits to entrepreneurs, it is important to be aware of the costs associated with its operation and compliance. Taking into account formation fees, annual reports, and taxes, as well as ongoing operational expenses, can greatly enhance financial planning and decision-making. The expertise of legal professionals can be invaluable when navigating through legal compliance, therefore hiring or consulting with qualified lawyers is instrumental to mitigate risk and ensure that all obligations are met. By staying informed and proactive, business owners can effectively manage the costs and challenges of maintaining an LLC in Arizona and pave the way for long-term success.
The cost of Arizona is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.