Arizona Business Tax ID: Everything You Need to Know
An Arizona business tax ID through both federal and state governments is necessary for new business owners in the state of Arizona.3 min read updated on February 01, 2023
Updated November 26, 2020:
An Arizona business tax ID through both federal and state governments is necessary for new business owners in the state of Arizona. A federal tax ID, or EIN, can easily be applied for online through the IRS website. In this state, all businesses need to also have a state business license or state tax ID. This applies to all businesses, whether they are traditional, home-based, or online. There may also be additional requirements for local permits or licenses specific to your business.
If you're looking for the perfect place to start your business, Arizona is very favorable to businesses and is a great state to consider. Location is a very important factor to consider in business, and you want to choose a place that will give you a good chance of success. There are plenty of skilled workers available in the state. Taxation is also favorable to businesses in Arizona, which will allow you to worry more about getting your business set up properly.
Arizona State Tax ID Number
Obtaining an Arizona state tax ID number is not difficult, but it does require a series of steps to complete the process.
- If the business is a partnership, LLC, or corporation, the business needs to be registered with the Arizona Department of Revenue. This can be done through forms available online from the Arizona DOR Corporate Filing Forms website. If the business is a sole proprietorship, it is not a requirement for it to be registered.
- You must have a federal tax ID number, or EIN, in order to get an Arizona state tax ID number. You can go to a local Internal Revenue Service to apply or call the IRS directly. The exception to this is if you are a sole proprietor with no employees. In this situation, the owner of the sole proprietor can use their Social Security number.
- Using the Department of Revenue Arizona Joint Tax Application, which is available online, you can apply for several licenses and tax registrations. This includes transaction privilege and state unemployment tax.
- Once the form is complete, print, sign, and submit the signature card. You can submit the signature card and filing fee by mailing it to the address on the card or by submitting it in person. You'll be granted your state tax ID number and licenses once the application is processed.
Federal Tax ID Number
The federal tax ID number, or EIN, is what the IRS uses to identify your business for tax purposes — just like how a Social Security number identifies an individual. Even though the name is Employer Identification Number, it is not a requirement that you have employees. Using the EIN, you can open a separate business banking account, handle payroll if you have any employees, and apply for certain business licenses.
When applying for an EIN, always wait for your LLC to be approved by the Arizona Corporation Commission first. If you don't wait and the LLC is rejected but the EIN is approved, you will have an EIN attached to an LLC that doesn't actually exist. In the event that this occurs, you can always cancel the EIN and reapply. There is no cost associated with applying for an EIN. In the past, you used to be able to apply for an EIN over the phone, but this is no longer an available option.
There is a specific person, the EIN responsible person, that goes on file with the IRS when applying for the EIN. For an Arizona LLC with just a single owner, this owner will be the responsible party. If there are multiple members in the LLC, then one of the members will have to be the EIN responsible party. Only one person can have this designation. The rest of the members' information is submitted when the tax filings are returned.
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