What does it take to legally open a small business in Glendale, AZ?

Laura wrote: “I am starting an online business selling different items that I buy from liquidation auctions to people nationwide on Etsy and eBay.”

Hi Laura, Team KAL LLC sounds like a promising venture. Opening a box of auction finds and listing them is a mini treasure hunt, and the ding of a sale notification brightens any day. The Arizona transaction privilege tax (TPT) license comes first here, because it is what lets you collect sales tax and buy inventory wholesale. Here is what we will cover: how to structure Team KAL LLC, the tax IDs it needs, and the licenses that let you open in Glendale, then a quick recap.

Arizona calls its sales tax license a transaction privilege tax license, and reselling auction finds to buyers is the sort of activity that needs one. Etsy and eBay collect tax on many orders they facilitate, but the license still matters for direct sales and for proving the rest. When you buy lots at liquidation auctions, check whether tax was charged at purchase, and keep receipts that show what you paid, since lots are often mixed. Selling nationwide means other states' thresholds can apply to your direct sales. Team KAL LLC should be set up with the right account in its name, not yours.

What Team KAL LLC needs

1. Arizona transaction privilege tax (TPT) license – Register before the first sale. If online orders from another state grow large, that state may expect you to register there too, since each state sets its own sales threshold.
2. LLC (limited liability company) – An LLC keeps business debts and lawsuits separate from your personal home and savings. A shipment arrives damaged and a buyer demands compensation, a dispute for the business to handle.
3. EIN (federal tax ID number) – You plan on 1 employee, so the federal tax ID number (EIN) is required for payroll, and you will also use it for the business bank account and supplier accounts.
4. Arizona employer ID – With 1 employee, you need a state employer account number for payroll withholding and unemployment insurance. It works like the EIN, but for state payroll taxes.
5. Business license – A business license puts Team KAL LLC on the official map in Glendale, which landlords, banks, and many customers will expect to see before they sign anything. If you rent, many permits ask for the landlord's written consent to run a business from the property.

By the numbers: Banks, insurers, and tax forms will ask for your industry code. For a small business it is NAICS 453998 (All Other Miscellaneous Store Retailers), 459999 under the 2022 update. With 1 employee planned, you are already creating jobs in Glendale. That makes 5 items on your list.

Tip: Track costs per lot, including shipping materials, so you know your real profit.

To recap: Team KAL LLC in Glendale, AZ needs a sales tax permit, an LLC, an EIN, a state employer ID, and a business license. Get those in place and you can spend your time on customers instead of paperwork.

We can file your seller's permit and the other registrations for you: start here.