Prescott

Review the Business Climate

How it's done

The Business climate is the general economic environment that local businesses operate in. Reviewing and understanding the local business climate provides valuable insights about the economy, costs, risks, and incentives that may impact the success of your business. This activity will guide you to better understand the business climate in Prescott and help you answer the following fundamental questions.

What is the business climate in Prescott?

We have compiled the most important aspects of Prescott’s business climate as an interactive dashboard below. This dashboard provides valuable economic, resident, household, dwelling and development indicators that may influence the success of your business.

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Resident Indicator Population Chart

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Median Age

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Resident Indicator Population Growth Chart

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Resident Indicator Income Chart

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Average Household Size

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Household Size Distribution

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Household Type

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Households Indicator Income Chart

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Dewelling Growth Chart

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Dwelling Indicator Growth Chart

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Dwelling Type

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Dwelling Construction Period

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Home Ownership
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Renter

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Development Indicator Number Value Building Permits Chart

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Development Indicator Number Building Permits By Type Chart

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What costs and assistance should I know about?

Whether you have a new or existing business it is critical to be aware of costs, incentives and grants that impact your business. This dashboard provides you with a snapshot of the major costs of conducting a business in Prescott and assistance available to Prescott businesses.

Privilege (Sales) Tax

Effective January 1, 2018, the City of Prescott’s transaction privilege (sales) tax rate is 2.75%.

Effective January 1, 2017 the City of Prescott is no longer a self-collecting City. The Arizona Department of Revenue (ADOR) is the single point of administration and collection of state, county and municipal transaction privilege tax. Be sure all tax owed to the City of Prescott is reported to ADOR on a separate line under the city region code PR.

Online Services

Transaction Privilege Tax (Sales Tax)

All Arizona cities and towns have a transaction privilege tax which is commonly referred to as a sales tax. It is, however, the tax on the privilege of doing business in Arizona and is not a true sales tax. The seller is liable for the tax but may pass the burden of the tax on to the purchaser. It includes but is not limited to taxation of retail sales, construction, residential and commercial rentals, utilities, communications, and amusements.

Each municipality and county sets their own tax rate, therefore the total tax rate varies throughout the state. The transaction privilege tax rate for Prescott is 2.75%. For most business classifications, the combined rate for the State of Arizona and Yavapai County is 6.35%. The total tax rate within the City of Prescott is 9.10%.

The City of Prescott tax rates and business classifications are detailed in this tax chart.

Use Tax

Use tax is levied on the purchase of tangible personal property stored, used or consumed within Prescott City limits, when an equivalent city privilege tax has not been paid. More detailed information can be found here.

Tax Code

City of Prescott Privilege & Use Tax Code – 2015 Edition

The City of Prescott is dedicated to assisting you navigate through the planning, licensing and permitting process with ease and expediency.

Community Development & Planning

The Planning Department is responsible for processing and reviewing land use plans for development and redevelopment within the City. Click here for more information.

The updated 2015 General Plan was ratified by Prescott voters and adopted by City Council with Resolution No. 4923-1502. Click here for more information.

For more information contact City of Prescott Community Development & Planning (928) 777-1207 or visit our website.

Building Department

Before beginning a building project, whether new construction, alteration or repair, the homeowner and/or builder should be aware that permits may be required. Please see the Building Department’s webpage for information about various types of building and construction permits here.

Homeowners should take care to select qualified, licensed and insured contractors to perform this work.

Please call the City of Prescott Building Department at (928) 777-1356 for specific information about the permits required for a particular project.

Average Annual Wages
NAICS Code Prescott, AZ MSA Arizona U.S. Total
11 Agriculture, forestry, fishing and hunting $28,614 $30,577 $33,287
21 Mining, quarrying, and oil and gas extraction $77,491 $75,743 $102,988
22 Utilities $47,920 $100,915 $102,868
23 Construction $39,878 $50,778 $58,647
31-33 Manufacturing $46,034 $72,322 $64,870
42 Wholesale trade $51,975 $74,315 $73,710
44-45 Retail trade $27,113 $31,283 $30,299
48-49 Transportation and warehousing $44,656 $49,664 $50,459
51 Information $37,691 $69,180 $98,458
52 Finance and insurance $49,154 $71,958 $101,210
53 Real estate and rental and leasing $35,702 $50,077 $54,965
54 Professional and technical services $46,735 $74,980 $90,972
55 Management of companies and enterprises $58,545 $85,671 $115,325
56 Administrative and waste services $31,702 $36,435 $37,989
61 Educational services $42,907 $41,522 $48,757
62 Health care and social assistance $43,214 $49,968 $47,956
71 Arts, entertainment, and recreation $17,779 $37,149 $36,806
72 Accommodation and food services $19,682 $19,959 $20,032
81 Other services, except public administration $30,618 $34,602 $35,921
99 Unclassified $31,279 $50,244 $51,837

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Private, NAICS Sectors, 2016 Annual Averages, All establishment sizes
Source: Quarterly Census of Employment and Wages - Bureau of Labor Statistics

Prescott, AZ MSA
https://data.bls.gov/cew/apps/table_maker/v4/table_maker.htm#type=6&year=2016&qtr=A&own=5&area=C3914&supp=0

Arizona
https://data.bls.gov/cew/apps/table_maker/v4/table_maker.htm#type=6&year=2016&qtr=A&own=5&area=04000&supp=0

US Total
https://data.bls.gov/cew/apps/table_maker/v4/table_maker.htm#type=6&year=2016&qtr=A&own=5&area=US000&supp=0

The table below provides the living wage requirements in Prescott, AZ. The data is sourced from the Living Wage Calculator created by Dr. Amy K. Glasmeier at MIT. It is a market-based approach that draws upon geographically specific expenditure data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other necessities (e.g. clothing, personal care items, etc.) costs.

The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency.

Annual Expenses 1 Adult 1 Adult 1 Child 2 Adults 1 Child
Food$3,564$5,245$8,124
Child Care$0$6,861$6,861
Medical$2,291$7,315$7,035
Housing$8,196$10,812$10,812
Transportation$3,860$7,975$8,373
Other$2,803$4,533$4,999
Required annual income after taxes$20,714$42,742$46,204
Annual taxes$3,437$7,372$7,980
Required annual income before taxes$24,150$50,114$54,184

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2017 Dr. Amy K. Glasmeier and the Massachusetts Institute of Technology: http://livingwage.mit.edu/

Prescott MSA, AZ
http://livingwage.mit.edu/metros/39140

The correlation between higher education and economic well-being is undeniable. The local availability of higher education institutions are important in creating community partnerships to deliver course work and customized training to new and expanding businesses. Fortunately, the City of Prescott offers several higher education opportunities.

Prescott has been home to Embry-Riddle Aeronautical University for more than 40 years, the only university in the world dedicated to aviation and aerospace, with new degree programs in cyber security.

Northern Arizona University has a facility on the campus of Yavapai College in Prescott. The university offers a variety of undergraduate and graduate degrees at Prescott.

As a nationally acclaimed private institution of higher education located in the central highlands of Arizona, Prescott College offers competency-based programs in the liberal arts and professional disciplines with a focus on interdisciplinary and experiential education in six general areas: Environmental Studies, Human Development and Psychology, Education, Arts and Letters, Adventure Education and Cultural and Regional Studies.

Prescott is the home and primary campus of Yavapai College and the school operates five additional campuses in Yavapai County. The college is one of the few community colleges that offer on-site residential housing. Students may obtain Associate Degrees in six (6) areas of study and 26 Associate of Applied Science Degrees.

ODU is in a partnership with Yavapai College that provides students/residents an education opportunity from a nationally accredited university through a distance learning network.

How do I use this information?

Having access to business climate statistics and information is one thing, but it's quite another to use data effectively and in a way that will benefit your business. This next section will help you do just that. Learn how to use this information to make better business decisions.

Monitor the local business climate

On-going assessment of the business climate is an essential part of operating a competitive business. In any business climate, there are numerous factors outside your control that will impact your business, both positively and negatively. The health of the economy impacts all businesses, but small businesses usually feel the effect of economic changes faster than big businesses. Improvements in the economy typically provide a rapid increase in new opportunities for small businesses, while an economic downturn can have a significant and prolonged negative impact.

Unfortunately, you can’t influence the economy, but you can monitor the business climate indicators provided above and then take the necessary actions to minimise risks to your business. Staying up to date with the business climate can also help you identify new opportunities that your business can take advantage of.

Know your costs

All industries are unique and incur different types of costs when starting or operating (Know your industry). Understanding these costs is essential when it comes to setting prices, budgeting and planning for growth or downturns. We’ve provided some of the local costs associated with taxes, development and labor that often get overlooked by businesses. There may be other municipal and provincial costs that apply to your business so we encourage you to contact us to find out more.

Make the most of assistance

Getting good advice and adequate financing are two of the most challenging aspects of starting and operating a business. Here’s the good news – the find additional resources activity lists a large number of programs and organizations that can provide the help you need to start, grow and fund your business.

Where can I learn more about the business climate?

While we are providing you with a range of valuable information about the business climate, the fact is that there's much more available. In this section we provide you with links to other websites that will supplement our information and help to keep your finger on the pulse.

There may also be other municipal and provincial costs that apply to your business so we encourage you to contact us to find out more.

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Contact us

Wendy Bridges, AZED Pro
Economic Development Coordinator
(928) 777-1204
wendy.bridges@prescott-az.gov