How to start a contracting business in Arizona (2026)
Everything a new contracting business in Arizona needs in the first months: registration, licenses, taxes, insurance and the yearly deadlines, with official links.
1. Register your business
Most owners form an LLC with the Arizona Corporation Commission. Once it's registered, find it here to claim a free website and see your exact dates.
2. Licenses
Arizona licenses or registers contractors at the state level for at least some work, often home improvement or jobs above a dollar amount. Check what your trade and job size need. Arizona details
Your city or county may also require a general business license or tax receipt.
3. Taxes
Get a free EIN from the IRS first. How. Register with Arizona before your first taxable sale. Register in Arizona
If you expect to owe $1,000 or more in federal tax for the year, you pay estimated tax four times a year.
Arizona's yearly report
Arizona doesn't require an annual report from LLCs. There's no state fee if you file on time.
Your first-month checklist
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Check your contractor license
Arizona licenses or registers contractors at the state level for at least some work, often home improvement or jobs above a dollar amount. Check what your trade and job size need. Arizona details
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Get general liability insurance
General contractors and homeowners will ask for your certificate before you start a job. See options
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Get your EIN
Free from the IRS, online in about 10 minutes. Banks, clients and payroll all ask for it. You never need to pay a service for it. How to get it free
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Open a business bank account
Keeps the company's money separate from yours, which is what protects your LLC. See options
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Insure your work truck
Personal auto policies usually don't cover a vehicle used for business. See options
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Payroll and workers' comp before your first hire
Most states require workers' comp once you have employees, and payroll software handles the tax filings. See options
What insurance costs
| Coverage | Median per month |
|---|---|
| General liability | $83 |
| Business owner's policy (BOP) | $115 |
| Workers' compensation | $160 |
| Commercial auto | $270 |
| Tools and equipment | $42 |
Source: Insureon, Aug 2026. Your price depends on your work, location and history.
Other trades in Arizona
Sources: state agency sites linked above; annual report rules compiled from state sites (checked Oct 2026). Rules change, so confirm with the agency before filing.