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.

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.

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

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 minimize 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. 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 state costs that apply to your business so we encourage you to contact us to find out more.

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 state 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