Get your tax IDs in Arizona

An EIN, if you need one, takes minutes online. Arizona adds a TPT license if what you sell is taxable, and employer registrations once you hire. One joint application covers the state ones.

What’s different in Arizona

• Sales tax is the transaction privilege tax (TPT), a tax on you, the seller, for doing business here. Some services are taxable as well as goods.
• One application, two agencies. The Arizona Joint Tax Application (Form JT-1/UC-001) goes to the Arizona Department of Revenue (ADOR), which passes it to the Arizona Department of Economic Security (DES) for unemployment insurance.
• E-Verify is required for every employer. Before your first hire, enroll your business, then check each new employee through it.
• Your city is part of it. A TPT license covers the state and city tax, and some cities issue their business license through it. Licenses and permits covers the rest.

Do this

1. Get an EIN from the IRS if you need one. The IRS requires one if you have employees and for partnerships, corporations, nonprofits and most LLCs. Arizona also needs one for a TPT license, unless you’re a sole proprietor with no employees, who can use a Social Security number. It’s free and, if approved, issued immediately online. Form your LLC or corporation first. Don’t pay a website to apply for you.
2. Decide whether your sales are taxable. If you sell a product or a service subject to TPT, you need a license before you start. ADOR’s page explains who does.
3. Apply for the TPT license. New Arizona businesses can apply through Arizona Business One Stop and pay at AZTaxes.gov. The state fee is $12 per location, plus a fee for each city where you do business. Working from home? Use your home address. Construction contractors file the paper JT-1 instead.
4. Look up your tax rate. The state rate for retail is 5.6%, other classifications have their own rates, and county and city taxes stack on top. ADOR’s rate tables give the rate by location and business type.
5. Register as an employer when you hire. The same joint application covers state income tax withholding with ADOR and unemployment insurance with DES. DES decides whether you owe unemployment tax: generally once you pay $1,500 or more in wages in a calendar quarter, or employ someone in 20 different weeks of a year.
6. Enroll in E-Verify before your first hire. Arizona requires every employer to check each new employee through it, and to keep the record for as long as the employee works for you or three years, whichever is longer. A court can suspend or revoke the business licenses of an employer that knowingly employs someone not authorized to work; an E-Verify check is evidence that you didn’t.
7. Set up each new hire. On Form I-9, the employee completes Section 1 by their first day of work, and you complete Section 2 within three business days of the start date (by the first day if the job lasts less than three business days). Create their E-Verify case no later than the third business day after they start work for pay. E-Verify is for people you’ve hired; you can’t use it to screen applicants. Have them fill out Arizona Form A-4 within five days of starting, and report every new hire to the state within 20 days.

What you get back

• EIN: a nine-digit federal tax ID, shown on screen when approved. Print the confirmation letter.
• TPT license: an eight-digit license number and a certificate for each location, mailed once fees are paid. It renews every year by January 1.
• Employer accounts: a withholding registration with ADOR and, if DES finds you liable, an unemployment insurance account number.
• E-Verify: a federal E-Verify account and, for each new hire, a case result to keep with your records.

Not selling anything taxable or hiring yet? You may need nothing more for now.