Key Takeaways

  • Arizona LLCs must comply with both state and federal tax filing requirements, including income, transaction privilege (sales), payroll, and unemployment taxes.
  • Arizona does not require LLCs to file annual reports, unlike many other states.
  • LLCs must file the appropriate federal tax forms depending on whether they are taxed as a sole proprietorship, partnership, C corporation, or S corporation.
  • Businesses with employees must register for withholding and unemployment insurance taxes through the Arizona Department of Revenue and the Department of Economic Security.
  • Arizona LLCs engaged in selling goods or services must register for a Transaction Privilege Tax (TPT) license and file returns monthly, quarterly, or annually depending on income.
  • Understanding the right elections, forms, and compliance steps helps avoid penalties and ensures proper registration with state and federal agencies.

What Are Arizona's LLC Tax Filing Requirements?

Arizona's LLC tax filing requirements are as easy as creating an LLC in Arizona. To create an LLC in the first place, you will need to pay the relevant fees to the Arizona Corporate Commission. After that, your LLC will be responsible for income taxes, unemployment taxes, and payroll taxes.

Federal Tax Classifications for Arizona LLCs

At the federal level, LLCs are classified based on the number of members and elections made with the IRS:

  1. Single-Member LLCs are disregarded entities by default and report business income and expenses on the owner’s individual tax return using Schedule C (Form 1040).
  2. Multi-Member LLCs are treated as partnerships unless an election is made to be taxed as a corporation. They must file Form 1065 and issue Schedule K-1s to each member for their share of income, deductions, and credits.
  3. C Corporation Election: LLCs can elect corporate taxation by filing Form 8832 and subsequently file Form 1120 annually to report business income.
  4. S Corporation Election: To elect S-corp status, LLCs file Form 2553, allowing profits and losses to flow through to owners without double taxation. The annual filing uses Form 1120S.

Choosing the right classification impacts how Arizona and federal taxes apply, influencing everything from income distribution to employment tax obligations.

Understanding State and Local Tax Obligations


While Arizona does not impose a separate state LLC income tax, businesses must still meet several tax obligations under Arizona law. Every LLC must pay taxes according to its federal tax classification, and may also be responsible for specific state-level filings:

  • Transaction Privilege Tax (TPT): Arizona imposes a TPT rather than a traditional sales tax. LLCs selling goods or providing taxable services must register for a TPT license through the Arizona Department of Revenue (ADOR). Filing frequency—monthly, quarterly, or annually—depends on the LLC’s gross income and tax liability.
  • Withholding Taxes: LLCs with employees are required to withhold state income tax from wages and remit these to ADOR. Businesses register for withholding taxes online through AZTaxes.gov.
  • Unemployment Insurance Tax: Employers must also pay unemployment insurance taxes to the Arizona Department of Economic Security (DES). Rates vary based on the company’s size and employment history.
  • Use Tax: If an LLC purchases goods from out-of-state vendors without paying sales tax, it must pay use tax at the same rate as TPT.
  • Property Taxes: LLCs that own real estate or personal property in Arizona are responsible for county-level property tax filings and payments.

Understanding these Arizona LLC filing requirements ensures your company remains in good standing with both the ADOR and local authorities.

Are LLCs Responsible for Federal Income Taxes?

All LLCs in Arizona are responsible for their own income taxes. However, how they pay those taxes depends on their tax classification. By default, single-member LLCs are taxed as sole proprietorships, while multi-member LLCs are taxed as partnerships. Arizona LLCs can also elect to be taxed as corporations—either C corporations or S corporations—if that structure provides greater financial or administrative advantages for their business.

Do LLCs in Arizona File an Annual Report with the State?

No. The Arizona Corporation Commission does not require LLCs to file an annual report, which sets the state apart from many others. While corporations in Arizona may have annual filing obligations, LLCs are exempt from this requirement, reducing ongoing administrative burdens for business owners.

Are LLCs Required to Have an EIN from the IRS?

LLCs that have employees are required to obtain an Employer Identification Number (EIN) from the IRS for tax filing and payroll purposes. Even LLCs without employees often benefit from having an EIN. This number can be used instead of a member’s Social Security Number on official forms and may be necessary to open a business bank account, apply for certain business licenses, or engage with vendors and wholesale suppliers.

Who Is Responsible for an Arizona LLC’s Tax Obligations?

Unless an LLC elects to be taxed as a corporation, its members are responsible for reporting and paying the business’s income taxes on their individual returns. This structure—known as “pass-through taxation”—means profits and losses flow directly to the members. If the LLC opts for corporate taxation, it must file IRS Form 2553 to elect S corporation status or Form 8832 for C corporation status. While corporate tax rates vary by year, the minimum state tax obligation is typically $50.

Does Arizona Require LLCs to Maintain Corporate Records?

Arizona law does not require LLCs to maintain formal corporate records, even if they elect to be taxed as a corporation. Nevertheless, keeping accurate records of meetings, decisions, and financial activities is highly recommended. Doing so helps demonstrate sound management practices and can provide protection in the event of audits or legal disputes.

Steps to Complete Arizona's LLC Tax Filing Requirements

1. Register your LLC with the State of Arizona and pay applicable fees.

  • Only registered LLCs are required to pay taxes. 

2. Understand what ongoing tax and legal business requirements your LLC is subjected to. 

  • Not all LLCs are subjected to the same tax filing requirements. For instance, LLCs with employees need to file payroll taxes. LLCs without employees do not have this requirement. By understanding which tax filing requirements impact your business, you will be better prepared to complete what is required.

3. If your LLC files taxes as a limited liability partnership, you need to file Form 1065 U.S. Return of Partnership Income. 

  • You must also show the distribution of the business in terms of profits, losses, and credits on an IRS Schedule K-1.

4. If your LLC files taxes as a C corporation, you need to file Form 8832 Entity Classification Election so the IRS will know how your LLC is being taxed. 

  • If you do not file this election with the IRS, you will be taxed as a pass-through entity by default. 
  • You must then file the Form 1120 U.S. Corporation Income Tax Return.
  • Arizona also has a state corporate tax that is a flat rate. You will need to file this with Form 120. 

5. If your LLC files taxes as an S corporation, you will need to file Form 1120S U.S. Corporation Income Tax Return with the IRS.

  • You must include an owner's report about how the profits, losses, and credits were distributed. 

6. If your LLC files taxes as a sole proprietorship, you must report income and expenses on your own income tax filings using form Schedule C Profit or Loss from Business, also referred to as Form 1040. 

7. If your LLC has employees, you will need to withhold employee income taxes and pay them to the Department of Revenue. 

  • If this is your LLCs first time paying employees and withholding taxes, you will need to register your business with the Department of Revenue. 
  • Most businesses opt to pay payroll taxes quarterly using the Form A1-QRT.
  • At the end of each year, you will need to reconcile your quarterly payroll tax payments with Form A1-R. 

8. Register to pay Arizona state unemployment insurance taxes. 

  • You'll need to also pay these taxes quarterly and reconcile these taxes at the end of the year. 

9. If your LLC sells physical products to customers living in Arizona, you also need to pay sales tax. 

Common Compliance Mistakes to Avoid

Many Arizona LLCs face penalties for missing or misunderstanding filing obligations. Avoid these common errors:

  • Failing to register for a TPT license when engaging in taxable sales.
  • Missing payroll tax deposits or failing to reconcile quarterly reports with annual returns.
  • Not maintaining separate business bank accounts, which can complicate expense deductions.
  • Overlooking federal elections, resulting in unintended tax classifications.
  • Ignoring local business license requirements, which can differ by city or county.

Staying informed about Arizona LLC filing requirements and deadlines helps maintain good standing and avoids unnecessary fines.

Registering for Arizona State Tax Accounts

Before filing taxes, your LLC must be registered with the Arizona Department of Revenue. This process ensures compliance with all applicable Arizona LLC filing requirements:

  1. Register with ADOR via AZTaxes.gov to obtain a state tax ID number.
  2. Apply for a TPT License if your business sells products or taxable services.
  3. Set Up Employer Accounts with both ADOR (for withholding) and DES (for unemployment insurance).
  4. Maintain Accurate Records of all income, deductions, payroll, and sales transactions to streamline quarterly and annual filings.
  5. Stay Current on Filing Deadlines:
    • TPT returns are generally due on the 20th day of the month following the reporting period.
    • Payroll and withholding reports follow the same monthly or quarterly schedule.

Registering early helps avoid delays and penalties when meeting these recurring Arizona LLC filing requirements

Frequently Asked Questions

1. Do Arizona LLCs have to file annual reports? No. Arizona LLCs are not required to file annual reports with the state, unlike most other states.

2. What taxes does an Arizona LLC pay? Arizona LLCs may owe income, payroll, unemployment, property, and Transaction Privilege Taxes (TPT) depending on their business activities.

3. How do I register for an Arizona TPT license? You can register for a TPT license online through AZTaxes.gov by completing a Joint Tax Application.

4. When are Arizona LLC tax filings due? Due dates vary by filing type. Most TPT and payroll taxes are due monthly or quarterly, while federal returns follow the standard IRS deadlines.

5. Do Arizona LLCs pay franchise or state income tax? No. Arizona does not levy a franchise tax on LLCs, and state income taxes are paid through members’ individual returns unless the LLC elects corporate taxation.

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