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.
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 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.
- AZTaxes.gov: Online Licensing, Reporting, and Payment of Sales Taxes
- Apply for a City of Prescott Business License
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 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.
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.
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|
|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|
|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|
Private, NAICS Sectors, 2016 Annual Averages, All establishment sizes
Source: Quarterly Census of Employment and Wages - Bureau of Labor Statistics
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|
|Required annual income after taxes||$20,714||$42,742||$46,204|
|Required annual income before taxes||$24,150||$50,114||$54,184|
2017 Dr. Amy K. Glasmeier and the Massachusetts Institute of Technology: http://livingwage.mit.edu/
Prescott MSA, AZ
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.
The City of Prescott may entertain incentives to companies in targeted industries, such as aviation, biosciences, R&D, precision manufacturing, etc. Criteria for incentives include projects that add at least 20 jobs that pay 25 percent above the prevailing median wage in Yavapai County, and the employer offers full employee benefits including employer paid medical benefits, vacation and sick pay. Additional criteria may apply, and all requests for incentives will be evaluated on an individual basis by the Economic Development Division and the City Manager’s Office.
Additional incentive programs offered include the Qualified Facility Program and the Job Training Program detailed below.
Qualified Facility Program Summary
The Qualified Facility tax credit (A.R.S. §41-1512) was established by the Arizona legislature in 2012 to promote the location and expansion of manufacturing facilities, including manufacturing-related research & development or headquarters facilities. The goal is to encourage business investment that will produce high quality employment opportunities for citizens of Arizona and enhance Arizona’s position as a center for corporate headquarters, commercial research, and manufacturing. Qualified Facility accomplishes this goal by providing a refundable tax credit to taxpayers who are expanding or locating a Qualified Facility in Arizona.
Job Training Incentive Program Summary
The Job Training Program is a job-specific, reimbursable grant program that supports the design and delivery of customized training to meet specific needs of employers, create new jobs and help increase the skill and wage levels of employees in Arizona. This program can provide grant money to businesses for training new employees, or to supplement training programs for incumbent employees. The program is streamlined, flexible and tailored to meet the needs of each specific employer.