Arizona LLC structure and cost: the state that charges nothing to move property, and the one privacy lever it leaves you

Pennsylvania taxes you for transferring real estate and taxes you again for transferring the company that owns it. Michigan taxes the deed and permanently resets your property taxes when the entity changes hands. Arizona does neither. Its constitution bans real estate transfer taxes outright, it has no franchise tax, and its income tax is a flat 2.5%, the lowest of any state that taxes income. Moving property into an entity, restructuring who owns it, and shifting entities around cost almost nothing here at the state level, which flips the analysis that dominates the structure pages for higher-friction states.

The trade-offs are on the other side of the ledger: Arizona will not let you form a series LLC, and it puts your ownership on the public record with only one narrow way around it. Take the cost side first, because it is the reason people structure real estate in Arizona the way they do.

The transfer tax that does not exist

Arizona is one of the few states where moving real estate carries no percentage tax at all, and the reason is constitutional.

Arizona’s constitution bans real estate transfer taxes, so moving property by deed costs only a flat recording fee.

In 2008 Arizona voters passed Proposition 100, the Protect Our Homes Act, which amended the state constitution to prohibit any new tax or fee on the sale or transfer of real property. So there is no state or local real estate transfer tax, and there cannot be one without another constitutional amendment. What remains is a small flat recording fee under A.R.S. § 11-1132, a fixed dollar amount rather than a percentage of value. Compare that to Pennsylvania, where the combined transfer tax runs around 2% and a 90% transfer of a real estate company is taxed like a deed, or Michigan, where the transfer tax is lower but selling the entity permanently uncaps the property’s taxes. In Arizona, none of that machinery exists. There is no transfer tax to pay on a deed and no controlling-interest transfer tax on the entity, because there is no transfer tax at all.

That absence changes what structuring costs. Contributing appreciated real estate into an LLC, restructuring the ownership of a property-holding company, and moving entities around are transactions that carry real state-level tax friction in Pennsylvania and Michigan and essentially none in Arizona. The nexus and foreign qualification guide covers where an entity legally lives; the point for Arizona is that the cost of moving property, the biggest number on the structure page for many states, is close to zero here.

The series LLC Arizona does not have

Arizona closes one structuring option that a few states keep open.

Arizona does not authorize a series LLC, so a multiple-property owner uses separate LLCs, one per asset.

Arizona’s LLC act, though it is the modern uniform act adopted in 2019, contains no series provision. You cannot form an Arizona series LLC. Owners who want isolation between properties use a separate LLC for each, which is the standard Arizona pattern and the reason the separateness discipline on the protection page matters. A series formed in a state that allows it can register into Arizona as a foreign entity, but whether an Arizona court would honor the liability walls between the individual series has not been tested, since Arizona has no series law of its own to apply. The series LLC guide covers the form’s trade-offs.

What the public record shows, and the one way to stay off it

Arizona is not a privacy state, and the reason is baked into how the articles work.

Arizona puts LLC ownership on the public record, and the only way to keep a member off it is a manager-managed structure with a stake under 20%.

Under A.R.S. § 29-3201, the Articles of Organization, which are public on the Arizona Corporation Commission website, must disclose ownership. If the LLC is member-managed, every member’s name and address goes on the record. If it is manager-managed, the record shows each manager plus every member who owns 20% or more of the capital or profits. That leaves exactly one privacy lever: a manager-managed LLC, run by a third-party manager, keeps a member who owns less than 20% off the public filing. It is narrow, and it does not help a majority owner or a small LLC with a couple of equal members. Arizona has no land-trust regime, so the anonymous LLC structures that create real privacy involve forming a holding entity elsewhere and layering ownership rather than relying on anything Arizona offers. The one bright spot is that there is no annual filing that re-exposes ownership every year, because Arizona LLCs file no annual report at all, covered on the filing page.

State tax on the LLC

Arizona’s tax picture is as light as its transfer-tax picture.

Arizona levies no franchise tax and taxes pass-through income at a flat 2.5%, the lowest income-tax rate in the country.

A pass-through Arizona LLC pays no franchise tax and no entity-level state income tax. Its income lands on the members and is taxed at Arizona’s flat 2.5% individual rate, the lowest flat rate of any state that taxes income. An LLC that elects C-corporation treatment pays the corporate income tax instead, a flat 4.9% with a small minimum. Arizona also offers an elective pass-through entity tax that lets the LLC pay the members’ Arizona tax at the entity level and deduct it federally, at the individual rate. Arizona imposes no estate tax and no inheritance tax, which is a real contrast to Pennsylvania’s inheritance tax and matters for passing an LLC interest at death. One Arizona wrinkle to plan for: the state’s sales tax is the Transaction Privilege Tax, a gross-receipts tax imposed on the seller rather than the buyer, so an LLC selling goods or taxable services needs a TPT license and owes the tax on its receipts. The filing page covers the formation and maintenance side.

The bottom line

Arizona’s constitution bans real estate transfer taxes, so moving property by deed costs only a flat recording fee, with no transfer tax on the entity either.

That absence makes contributing property, restructuring ownership, and moving entities essentially free at the state level, the opposite of Pennsylvania and Michigan.

Arizona does not authorize a series LLC, so multiple-property owners use separate LLCs and rely on separateness discipline.

Ownership is public under A.R.S. § 29-3201, and the only privacy lever is a manager-managed LLC with a member owning under 20%.

Arizona levies no franchise tax, taxes pass-through income at a flat 2.5%, and imposes no estate or inheritance tax, making it one of the lowest-friction states to hold and move an entity.

What this page does not cover

This page is about where the entity lives and what it costs to hold and move. How creditors reach a member’s interest, the exclusive-remedy charging order, and the community-property shield are on the protection page. The default governance rules and the fiduciary duties you can eliminate are on the governance page. The formation fee, the publication requirement, and the absent annual report are on the filing page.

Last verified August 2026.