This article covers the bare essentials needed to get your therapy practice up and running in the Grand Canyon State. For advice on budgeting, marketing your practice, and billing your clients, check out our general guide, How to Start a Therapy Practice.
1. Local Zoning Laws and Regulations in Arizona
Arizona boasts 15 counties and contains 91 incorporated cities and towns. Before you settle on a location for your therapy practice—even if that location is your own home—you must make sure the local zoning allows you to operate there.
In cases where you aren’t typically allowed to operate a business in a certain area—for instance, a home business in a residential area—you can apply for a zoning variance. A variance is more or less an exception to zoning laws.
For information on whether you need to apply for a variance, what types of zoning your town or city recognizes, and what kind of business you can perform there, contact your local municipality and check the Arizona zoning regulations.
2. Business Name Search in Arizona
If your therapy practice is a sole proprietorship or a general partnership and you intend to do business other than your own (or yours and your partners’), you’re required by law to register a fictitious business name in Arizona.
Here’s a step-by-step guide:
- Conduct a business name search: Before proceeding with the registration, it’s advisable to conduct a search on the Arizona Corporation Commission’s website to check the availability of your chosen business name. This step helps ensure that your desired name is not already registered or too similar to an existing entity.
- File the Trade Name Application: In Arizona, a business name is often referred to as a “Trade Name.” To register your business name, you need to file a Trade Name Application with the Arizona Corporation Commission. You can complete the application online through their website or download the paper form and mail it to the appropriate address.
- Provide required information: When filling out the Trade Name Application, you’ll need to provide details such as your business name, the type of business entity (sole proprietorship, partnership, corporation, etc.), the purpose of your business, your address, and other relevant information.
- Pay the registration fee: There is a fee associated with registering a business name in Arizona. The current fee can be found on the Arizona Corporation Commission’s website. Ensure that you include the payment along with your application. Payment methods typically include credit card, check, or money order.
3. Business Structure in Arizona
Each state recognizes—and registers—different business structures (aka “entity types”). Your practice’s business structure affects how its income is taxed and who may own shares of the practice. Forming your business with the Arizona Corporation Commission (ACC) includes a 10-step guide.
In Arizona, the business structures you can choose from are:
- Sole Proprietorship: This is the simplest form of business ownership where an individual operates the business as an individual and assumes full personal liability for the business’s debts and obligations.
- Partnership: A partnership is a business structure where two or more individuals or entities agree to share profits, losses, and responsibilities. There are two main types of partnerships in Arizona: general partnerships and limited partnerships.
- Corporation: A corporation is a separate legal entity from its owners (shareholders) and offers limited liability protection. In Arizona, you can form a regular corporation (C corporation) or a small business corporation (S corporation).
- Limited Liability Company (LLC): An LLC is a popular business structure that combines the limited liability protection of a corporation with the flexibility and tax advantages of a partnership. Arizona allows the formation of domestic and foreign LLCs.
- Nonprofit Corporation: A nonprofit corporation is an organization formed for charitable, educational, religious, or other nonprofit purposes. It operates with a primary goal of benefiting the public or a specific cause.
- Professional Corporation (PC): A professional corporation is a specific type of corporation that allows licensed professionals, such as doctors, lawyers, accountants, and architects, to provide professional services under the protection of limited liability.
It’s important to note that each business structure has its own legal and tax implications, so it’s advisable to consult with an attorney, accountant, or business advisor to determine the most suitable structure for your specific business needs and goals.
4. Register Your Business in Arizona
To register your business in Arizona, you need to do two things:
- File the business registration with the State
- Pay the filing fee.
The process to register a therapy practice in Arizona involves several steps. Here are some resources that may be helpful:
- Form your business with the Arizona Corporation Commission (ACC)
- Obtain a local business license
- File a complete application with the Arizona Board of Physical Therapy
- Pay the initial registration fee of $50.00
- Ensure compliance with state, local, and federal laws It is recommended to seek guidance from professional organizations such as the Arizona Physical Therapy Association (APTA) and to consult with legal and financial professionals to ensure all requirements are met
5. Business Licenses & Permits in Arizona
To get business licenses and permits for a therapy practice in Arizona, one needs to follow specific steps.
First, form a business with the Arizona Corporation Commission (ACC) and obtain a local business license. Second, file a complete application with the Arizona Board of Physical Therapy and pay the initial registration fee of $50.00 if the business offers physical therapy services to the public and is not exempt from registration under A.R.S. § 32-2030(H).
It is also essential to ensure compliance with state, local, and federal laws.
Professional organizations such as the Arizona Physical Therapy Association (APTA) can provide guidance on the administrative rules and statutes that govern the practice of physical therapy in Arizona.
6. Business Insurance in Arizona
To get business insurance for a therapy practice in Arizona, one can contact an insurance provider and request a quote for a business owner’s policy (BOP). The cost of a BOP varies depending on the amount of property coverage included. Among therapy and counseling businesses that purchase a BOP with Insureon, 27% pay less than $500 per year, and 62% pay between $500 and $1,000 per year.
It is also essential to ensure compliance with state, local, and federal laws.
Additionally, all business-owned vehicles in Arizona must be covered by commercial auto insurance.
what types of insurance are recommended for therapy practices in Arizona
Therapy practices in Arizona are recommended to have several types of insurance coverage.
- General liability insurance
is essential to protect against claims of bodily injury, property damage, and advertising injury.
- Workers’ compensation insurance
is required for businesses that regularly have at least one employee, full-time or part-time, in Arizona.
- Commercial auto insurance
is required for all business-owned vehicles in Arizona.
- Additionally, it is recommended to have professional liability insurance, also known as malpractice insurance, to protect against claims of negligence or malpractice.
Having malpractice insurance, also known as professional liability insurance, is beneficial for therapy practices in Arizona. Malpractice insurance can protect therapists against claims of negligence or malpractice, which can be costly and damaging to a practice’s reputation. Malpractice insurance can also provide coverage for legal fees and settlements or judgments in the event of a lawsuit. Additionally, some insurance providers offer risk management resources and support to help therapists prevent claims and improve patient safety.
7. Business Taxes in Arizona
To prepare to pay taxes in Arizona for a therapy practice, it is recommended to visit the Arizona Department of Revenue website to learn about the state’s tax requirements for businesses.
It is also important to obtain a local business license and form a business entity with the Arizona Corporation Commission. As a private practice therapist, it is important to set aside money for federal and state taxes, retirement, business expenses, and salary. Additionally, it is recommended to work with an accountant or tax professional who can provide guidance on tax deductions and ensure compliance with tax laws.
How to file taxes for a therapy practice in Arizona
To file taxes for a therapy practice in Arizona, one can use AZTaxes.gov to electronically file and pay Transaction Privilege Tax (TPT), use taxes, and withholding taxes.
It is also important to obtain a local business license and form a business entity with the Arizona Corporation Commission. When filing income taxes, it is recommended to work with an accountant or tax professional who can provide guidance on tax deductions and ensure compliance with tax laws. Additionally, the Arizona Department of Revenue offers free tax preparation assistance through the Volunteer Income Tax Assistance (VITA) program.