In Arizona, the rules for handyman work are straightforward: if a job costs more than $1,000 in labor and materials or requires a permit, you need a contractor’s license. This threshold creates a clear line between handyman work and contractor work.
What Can an Unlicensed Handyman Do in Arizona?
Without a contractor license, a handyman in Arizona can legally perform minor repairs and maintenance work as long as:
- The total cost of labor and materials is under $1,000
- The work doesn’t require a building permit
- It’s unpaid volunteer work
- You’re working on your own property
It’s important to note that unlicensed individuals:
- Must include the exact phrase “Not a Licensed Contractor” in all advertisements
- Cannot advertise or perform any work requiring a license
Here are some examples of the work you can do without a license:
Basic maintenance:
- Minor painting touch-ups
- Basic yard maintenance
- Simple furniture assembly
- Basic gutter cleaning
Minor repairs:
- Small drywall patches
- Basic caulking
- Minor wood repairs
- Cabinet hardware replacement
- Minor fence repairs
Getting Licensed for Bigger Jobs
If you want to work on construction projects in Arizona that cost more than $1,000 or need building permits, you’ll need a contractor’s license. The good news is that once you have your license, you can legally take on larger, more profitable jobs. You’ll need to choose the right license type, pay some fees, and complete some tests.
Local License Requirements for Handymen
While Arizona state law requires contractors to be licensed through the ROC for projects over $1,000, several municipalities have additional requirements for handypersons.
Phoenix: Handymen must obtain a Transaction Privilege Tax (TPT) license. Handymen must also register with the city’s Planning & Development Department before performing any work.
Tucson: Handymen must register with the Development Services Department and obtain the necessary permits before starting any work. The city enforces specific building safety codes that may differ from state standards.
Flagstaff: A business license is required for each permanent business location in the city unless you are exempt. Handymen also need a business license for any temporary business locations or transient merchant activities within the city unless exempt. You can find the complete list of exemptions on Flagstaff’s official site.
Sedona: Handymen operating within the city of Sedona must obtain a business license, which includes adhering to zoning laws, building permits, and tenant occupancy permits. Specific licensing requirements may also apply, as stated in the Sedona Land Development Code.
How to Build Your Handyman Business in Arizona
Starting a handyman business in Arizona begins with proper registration and documentation. Let’s walk through what you’ll need to get your business up and running legally and successfully.
1. Getting Your Tax License
First, you’ll need a Transaction Privilege Tax (TPT) license from the Arizona Department of Revenue. This is a must-have before you start working. The license costs $12 and follows the calendar year.
Remember, you might need separate licenses for different cities where you plan to work.
2. Setting Up Your Business Structure
You’ll need to decide how to structure your business. Most handymen choose a sole proprietorship or an LLC, though partnerships are also options.
File the appropriate paperwork through the Arizona Department of Revenue website.
3. Obtain an Employer Identification Number (EIN)
An EIN is required for tax purposes and can be obtained from the IRS. This number is necessary if you plan to hire employees or open a business bank account.
4. Keeping Your Records Straight
Good record-keeping will save you headaches down the road. Save everything—your transaction records, copies of licenses and permits, and all your business expenses and income. This documentation proves invaluable during tax time and helps you track your business growth.
5. Managing Your Taxes
As a handyman, you must collect and pay transaction privilege tax. The state will assign you a filing schedule, and you must submit your TPT returns accordingly. Stay on top of both state and local tax requirements to avoid any issues.
6. Protecting Your Business
Always get everything in writing. Create detailed work agreements for each job and keep thorough records of all your projects and expenses.
Remember to stay within the $1,000 limit per project to comply with state regulations. Before starting any work, check whether you need a building permit – this simple step can prevent problems later on.
Get Started Today
People value their time more than ever, which is why so many turn over their household maintenance and repair jobs to a handyman. So if you have the skills, there’s money to be made. Home Gnome gives handymen an edge by connecting you with jobs in your area, saving you time and money and letting you focus on the work. Sign up now.
Main Image Credit: Sergii Pavlovskyi / Adobe Stock created using Canva Pro
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