I am unclear on this particular issue for Arizona and home baking. Does my home bakery need to be a registered business to sell goods? Do I need to be an LLC, non-profit, corporation or anything like that? If not, how do taxes work?
You can call your planning division to find out if you are required to get a business license. It’s quite possible that you would be. If you are, you can use this website to learn about starting a small business.
I am not familiar with Arizona’s tax laws, but in general, many cottage food operations are exempt from sales tax, because the food they make is consumed off of the premises where it was made. You would still have to submit yearly taxes for your business (if you do not have to file for a business license, then the state would just automatically consider you a sole proprietorship for your taxes). You might contact the health department to ask them about sales tax.