A.R.S. § 43-1164.03 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1164.03
43-1164.03 Renewable energy production tax credit; definitions
Status: in_force

43-1164.03. Renewable energy production tax credit; definitions

A. A credit is allowed against the taxes imposed by this title for the production of electricity using renewable energy resources.

B. The taxpayer is eligible for the credit:

1. If the taxpayer holds title to a qualified energy generator that first produces electricity from and after December 31, 2010 and before January 1, 2021.

2. For ten consecutive calendar years beginning with the calendar year in which the qualified energy generator begins producing electricity that is transmitted through a transmission facility to a grid connection with a public or private electric transmission or distribution utility system.  That same date applies with respect to that generator until the expiration of the ten-year period regardless of whether the generator is sold to another taxpayer or goes out of production before the expiration of the ten-year period.

C. The credit authorized by this section is based on the electricity that is generated by a qualified energy generator during a calendar year.  For a taxpayer that files on a fiscal year basis, the credit shall be claimed on the return for the taxable year in which the calendar year ends.

D. Subject to subsection G of this section, the amount of the credit is:

1. One cent per kilowatt-hour of the first two hundred thousand megawatt-hours of electricity produced by a qualified energy generator in the calendar year using a wind or biomass derived qualified energy resource.

2. The following amounts for electricity produced by a qualified energy generator using a solar light derived or solar heat derived qualified energy resource:

(a) Four cents per kilowatt-hour in the first calendar year in which the qualified energy generator produces electricity.

(b) Four cents per kilowatt-hour in the second calendar year in which the qualified energy generator produces electricity.

(c) Three and one-half cents per kilowatt-hour in the third calendar year in which the qualified energy generator produces electricity.

(d) Three and one-half cents per kilowatt-hour in the fourth calendar year in which the qualified energy generator produces electricity.

(e) Three cents per kilowatt-hour in the fifth calendar year in which the qualified energy generator produces electricity.

(f) Three cents per kilowatt-hour in the sixth calendar year in which the qualified energy generator produces electricity.

(g) Two cents per kilowatt-hour in the seventh calendar year in which the qualified energy generator produces electricity.

(h) Two cents per kilowatt-hour in the eighth calendar year in which the qualified energy generator produces electricity.

(i) One and one-half cents per kilowatt-hour in the ninth calendar year in which the qualified energy generator produces electricity.

(j) One cent per kilowatt-hour in the tenth calendar year in which the qualified energy generator produces electricity.

E. To qualify for the purposes of this section, an energy generator may be located within one mile of an existing qualified energy generator only if the owner of the energy generator or the owner's corporate affiliates are not the owner of or the corporate affiliate of the owner of the existing qualified energy generator.

F. To be eligible for the credit under this section, the taxpayer must apply to the department, on a form prescribed by the department, for certification of the credit.  The department shall only accept applications beginning January 2 through January 31 of the year following the calendar year for which the credit is being requested.  The application shall include:

1. The name, address and social security number or federal employer identification number of the applicant.

2. The location of the taxpayer's facility that produces electricity using renewable energy resources for which the credit is claimed.

3. The amount of the credit that is claimed.

4. The date the qualified energy generator began producing commercially marketable amounts of electricity.

5. Any additional information that the department requires.

G. The department shall review each application under subsection F of this section and certify to the taxpayer the amount of the credit that is authorized.  The amount of the credit for any calendar year shall not exceed two million dollars per facility that produces electricity using renewable energy resources. Credits are allowed under this section and section 43-1083.02 on a first come, first served basis.  The department shall not authorize tax credits under this section and section 43-1083.02 that exceed in the aggregate a total of twenty million dollars for any calendar year.  The first time that a taxpayer submits a qualified application for a qualified energy generator under subsection F of this section, the  department shall add the taxpayer's name to a credit authorization list that is maintained in the order in which qualified applications are first received by the department on behalf of the qualified energy generator.  A taxpayer's position on the credit authorization list shall be determined in the first year the taxpayer submits an application under subsection F of this section for the qualified energy generator.  The taxpayer's position on the credit authorization list for a particular qualified energy generator shall remain unchanged for the ten years that are specified in subsection B, paragraph 2 of this section or until a year in which the taxpayer fails to submit a timely application under subsection F of this section or otherwise fails to comply with this section. If a taxpayer is removed from the credit authorization list for a qualified energy generator, the taxpayer may establish a new position on the credit authorization list in a subsequent year by filing a timely application for a qualified energy generator that qualifies for the credit.  If an application is received that, if authorized, would require the department to exceed the twenty million dollar limit, the department shall grant the applicant only the remaining credit amount that would not exceed the twenty million dollar limit.  After the department authorizes twenty million dollars in tax credits, the department shall deny any subsequent applications that are received for that calendar year.  The department shall not authorize any additional tax credits that exceed the twenty million dollar limit even if the amounts that have been certified to any taxpayer were not claimed or a taxpayer otherwise fails to meet the requirements to claim the additional credit.

H. Co-owners of a qualified energy generator, including corporate partners in a partnership and members of a limited liability company, may each claim the pro rata share of the credit allowed under this section based on ownership interest.  The total of the credits allowed all such owners of the qualified energy generator may not exceed the amount that would have been allowed for a sole owner of the generator.

I. If the allowable tax credit for a taxpayer exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.

J. The department shall adopt rules and publish and prescribe forms and procedures as necessary to effectuate the purposes of this section.

K. For the purposes of this section:

1. "Biomass" means organic material that is available on a renewable or recurring basis, including:

(a) Forest-related materials, including mill residues, logging residues, forest thinnings, slash, brush, low-commercial value materials or undesirable species, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds and woody material harvested for the purpose of forest fire fuel reduction or forest health and watershed improvement.

(b) Agricultural-related materials, including orchard trees, vineyard, grain or crop residues, including straws and stover, aquatic plants and agricultural processed coproducts and waste products, including fats, oils, greases, whey and lactose.

(c) Animal waste, including manure and slaughterhouse and other processing waste.

(d) Solid woody waste materials, including landscape or right-of-way tree trimmings, rangeland maintenance residues, waste pallets, crates and manufacturing, construction and demolition wood wastes, excluding pressure-treated, chemically-treated or painted wood wastes and wood contaminated with plastic.

(e) Crops and trees planted for the purpose of being used to produce energy.

(f) Landfill gas, wastewater treatment gas and biosolids, including organic waste byproducts generated during the wastewater treatment process.

2. "Qualified energy generator" means a facility that has at least five megawatts generating capacity, that is located on land in this state owned or leased by the taxpayer, that produces electricity using a qualified energy resource and that sells that electricity to an unrelated entity, unless the electricity is sold to a public service corporation.

3. "Qualified energy resource" means a resource that generates electricity through the use of only the following energy sources:

(a) Solar light.

(b) Solar heat.

(c) Wind.

(d) Biomass.
A.R.S. § 43-310 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 310
43-310 Separate returns after filing joint returns
Status: in_force

43-310. Separate returns after filing joint returns

A. If a husband and wife have filed a joint return for a taxable year for which separate returns could have been made by them under section 43-309, and the time prescribed by this title for filing the return for such taxable year has expired, the spouses may nevertheless make separate returns for such taxable year. Separate returns filed by the spouses in such a case shall constitute their returns for such taxable year, and all payments, credits, refunds or other repayments made or allowed with respect to the joint return for such taxable year shall be taken into account in determining the extent to which the taxes based on the separate returns have been paid.

B. Separate returns may be filed under subsection A of this section only if there is paid in full all of the following, at or before the time of filing such returns:

1. All amounts previously assessed with respect to both spouses for such taxable year.

2. All amounts shown as the tax by the spouses upon their joint return for such taxable year.

3. Any amount determined, at the time of the filing of the separate returns, as a deficiency with respect to the spouses for such taxable year, if, prior to such filing, a notice of proposed deficiency under section 42-1108 has been mailed.

C. Separate returns may not be filed under subsection A of this section:

1. After the expiration of four years from the last date prescribed by this title for filing the return for such taxable year, determined without regard to any extension of time granted for the filing of the joint return.

2. After there has been mailed to the spouses, with respect to such taxable year, a notice of deficiency under section 42-1108, or if the spouses, as to such notice, appeal to the department under section 42-1251, or appeal to the state board under section 42-1253.

3. After the spouses have commenced a suit in court for the recovery of any part of the tax paid for the taxable year with respect to the joint return.

4. After the spouses have entered into a closing agreement under section 42-1113, with respect to such taxable year as to the tax payable by the spouse under their joint return.

D. If separate returns are made under subsection A of this section, any election, other than the election to file the joint return, made by the spouses in their joint return for such taxable year with respect to the treatment of any income, deduction or credit shall not be changed in the making of the separate returns where such election would have been irrevocable if the separate returns had not been filed.

E. If separate returns are made under subsection A of this section after the death of either spouse, such return with respect to the decedent may be made only by the decedent's personal representative.

F. Where the aggregate amount of the taxes shown by the spouses on their separate returns filed pursuant to subsection A of this section exceeds the tax shown on their joint return:

1. If any of such excess is attributable to negligence or intentional disregard of rules and regulations of the department, but without intent to defraud, at the time of making the joint return, then five per cent of the total amount of such excess on each return shall be assessed, collected and paid as if it were a deficiency.

2. If any part of such excess is attributable to fraud with intent to evade tax at the time of the making of the joint return, then fifty per cent of the total amount of such excess shall be so assessed, collected and paid, in lieu of the fifty per cent addition to the tax provided in section 42-1125.

G. For the purposes of section 42-1104, relating to periods of limitations upon assessment and collection, and for the purposes of section 42-1125, subsection A, relating to delinquent returns, separate returns made under this section shall be deemed to have been filed on the date on which the joint return was filed.

H. For the purposes of section 42-1118, relating to refunds and credits, separate returns made under this section shall be deemed to have been filed on the last date prescribed by this title for filing the return for such taxable year, determined without regard to any extension of time granted for the filing of the joint return.

I. If separate returns are made under subsection A of this section, the period of limitations provided in section 42-1104 on the making of assessments and collecting taxes shall, with respect to such returns, include one year immediately after the date of filing of such separate returns, computed without regard to the provisions of subsection G of this section.

J. For the purposes of section 42-1125, relating to penalties in the case of fraudulent returns, the term "return" includes a joint return filed by spouses with respect to a taxable year for which separate returns are made under subsection A of this section after the filing of such joint return.
A.R.S. § 43-1501 — Arizona Code / Title 43 / Chapter 15 / Article 1 / Section 1501
43-1501 Definitions
Status: in_force

43-1501. Definitions

In this chapter, unless the context otherwise requires:

1. "Allocate" includes reserving money for an award of a multiyear educational scholarship or tuition grant for a specific student.

2. "Custodian" means a resident of this state who is a parent or an authorized out-of-home care provider or, if none, the legal guardian of a qualified student, as defined in section 43-1505.

3. "Fiscal year" means the fiscal year of the state as prescribed in section 35-102.

4. "Qualified school" means a preschool that offers services to students with disabilities, nongovernmental primary school or secondary school that is located in this state and that does not discriminate on the basis of race, color, disability, familial status or national origin and that requires all teaching staff and personnel that have unsupervised contact with students to be fingerprinted.  Qualified school does not include a charter school or programs operated by a charter school.
A.R.S. § 43-1088 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1088
43-1088 Credit for contribution to qualifying charitable organizations and qualifying foster care charitable organizations; definitions
Status: in_force

43-1088. Credit for contribution to qualifying charitable organizations and qualifying foster care charitable organizations; definitions

A. Except as provided in subsections B and C of this section, a credit is allowed against the taxes imposed by this title for voluntary cash contributions by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G during the taxable year to a qualifying charitable organization, other than a qualifying foster care charitable organization, not to exceed:

1. $400 in any taxable year for a single individual or a head of household.

2. $800 in any taxable year for a married couple filing a joint return.

B. A separate credit is allowed for voluntary cash contributions during the taxable year to a qualifying foster care charitable organization. A contribution to a qualifying foster care charitable organization does not qualify for, and shall not be included in, any credit amount under subsection A of this section. If the voluntary cash contribution by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G is to a qualifying foster care charitable organization, the credit shall not exceed:

1. $500 in any taxable year for a single individual or a head of household.

2. $1,000 in any taxable year for a married couple filing a joint return.

C. Subsections A and B of this section provide separate credits against taxes imposed by this title depending on the recipients of the contributions. A taxpayer, including a married couple filing a joint return, in the same taxable year, may either or both:

1. Contribute to a qualifying charitable organization, other than a qualifying foster care charitable organization, and claim a credit under subsection A of this section.

2. Contribute to a qualifying foster care charitable organization and claim a credit under subsection B of this section.

D. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.

E. For the purposes of this section, a contribution for which a credit is claimed and that is made on or before the fifteenth day of the fourth month following the close of the taxable year may be applied to either the current or preceding taxable year and is considered to have been made on the last day of that taxable year.

F. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry forward the amount of the claim not used to offset the taxes under this title for not more than five consecutive taxable years' income tax liability.

G. The credit allowed by this section is in lieu of a deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.

H. For taxable years beginning from and after December 31, 2022, the department shall adjust the dollar amounts prescribed in subsection A, paragraphs 1 and 2 of this section and subsection B, paragraphs 1 and 2 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall be raised to the nearest whole dollar. The dollar amounts may not be revised below the amounts prescribed in the prior taxable year.

I. Taxpayers taking a credit authorized by this section shall provide the name of the qualifying charitable organization and the amount of the contribution to the department on forms provided by the department.

J. A qualifying charitable organization shall provide the department with a written certification that it meets all criteria to be considered a qualifying charitable organization. The organization shall also notify the department of any changes that may affect the qualifications under this section.

K. The charitable organization's written certification must be signed by an officer of the organization under penalty of perjury.  The written certification must include the following:

1. Verification of the organization's status under section 501(c)(3) of the internal revenue code or verification that the organization is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901.

2. Financial data indicating the organization's budget for the organization's prior operating year and the amount of that budget spent on services to residents of this state who either:

(a) Receive temporary assistance for needy families benefits.

(b) Are low-income residents.

(c) Are individuals who have a chronic illness or physical disability.

3. A statement that the organization plans to continue directing or spending at least fifty percent of its budget on services to residents of this state who receive temporary assistance for needy families benefits, who are low-income residents or who are individuals who have a chronic illness or physical disability.

4. A statement that the organization does not provide, pay for or provide coverage of abortions and does not financially support any other entity that provides, pays for or provides coverage of abortions.

L. The department shall review each written certification and determine whether the organization meets all the criteria to be considered a qualifying charitable organization and notify the organization of its determination. The department may also periodically request recertification from the organization.  The department shall compile and make available to the public a list of the qualifying charitable organizations.

M. For the purposes of this section:

1. "Direct" means providing monies or financial or in-kind assistance to a charitable organization that is exempt from federal income taxation under section 501(c)(3) of the internal revenue code and that directly provides services to residents of this state who receive temporary assistance for needy families benefits, to low-income residents of this state and their households or to individuals who have a chronic illness or physical disability and who are residents of this state.

2. "Individuals who have a chronic illness or physical disability" means individuals whose primary diagnosis is a severe physical condition that may require ongoing medical or surgical intervention.

3. "Low-income residents" means persons whose household income is less than one hundred fifty percent of the federal poverty level.

4. "Qualified individual" means any of the following:

(a) A foster child as defined in section 8-501.

(b) A person who is participating in an independent living program as prescribed in section 8-521.

(c) A person who is participating in a transitional independent living program as prescribed by section 8-521.01.

(d) A person who is participating in an extended foster care program as prescribed in section 8-521.02.

(e) A person who is under twenty-seven years of age and whose reason for leaving foster care is any of the following:

(i) Reaching eighteen years of age.

(ii) Adoption or legal guardianship after reaching fifteen years of age.

(iii) Reunification after reaching fourteen years of age.

5. "Qualifying charitable organization" means a charitable organization that is exempt from federal income taxation under section 501(c)(3) of the internal revenue code or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901. The organization must direct or spend at least fifty percent of its budget on services to residents of this state who receive temporary assistance for needy families benefits, to low-income residents of this state and their households or to individuals who have a chronic illness or physical disability and who are residents of this state.  Taxpayers choosing to make donations through an umbrella charitable organization that collects donations on behalf of member charities shall designate that the donation be directed to a member charitable organization that would qualify under this section on a stand-alone basis. Qualifying charitable organization does not include any entity that provides, pays for or provides coverage of abortions or that financially supports any other entity that provides, pays for or provides coverage of abortions.

6. "Qualifying foster care charitable organization" means a qualifying charitable organization that is exempt from federal income taxation under section 501(c)(3) of the internal revenue code or is a designated community action agency that receives community services block grant program monies pursuant to 42 United States Code section 9901 and that each operating year provides services to at least two hundred qualified individuals in this state and spends at least fifty percent of its budget on services to qualified individuals in this state.

7. "Services" means:

(a) For a qualifying charitable organization, cash assistance, medical care, behavioral health services, child care, food, clothing, shelter, job placement and job training services, workforce readiness services, workforce development programs or any other assistance that is reasonably necessary to meet basic needs and that is provided and used in this state. For the purposes of this subdivision:

(i) "Behavioral health services" has the same meaning prescribed in section 36-401.

(ii) "Job placement and job training" includes work activities as defined in section 46-101 and any other preparation and training used toward obtaining a high school equivalency diploma.

(iii) "Workforce development program" means any program recognized by the workforce Arizona council pursuant to section 41-5401.

(b) For a qualifying foster care charitable organization, cash assistance, medical care, behavioral health services, child care, food, including snacks at the qualifying foster care charitable organization's foster youth events, clothing, shelter, job placement services, job training services, character education programs, workforce development programs, secondary education student retention programs, housing or financial literacy services or any other assistance that is reasonably necessary to meet basic needs or provide normalcy and that is provided and used in this state.  For the purposes of this subdivision:

(i) "Behavioral health services" has the same meaning prescribed in section 36-401.

(ii) "Character education program" means any program described in section 15-719, subsection B that is offered by a qualifying foster care charitable organization.

(iii) "Job training services" has the same meaning as vocational and technical preparation as defined in section 15-781.

(iv) "Normalcy" means the condition of experiencing a typical childhood by participating in activities that are age or developmentally-appropriate, as defined in 42 United States Code section 675.

(v) "Workforce development program" means any program recognized by the workforce Arizona council pursuant to section 41-5401.
A.R.S. § 43-1013 — Arizona Code / Title 43 / Chapter 10 / Article 2 / Section 1013
43-1013 Income tax surcharge for public education
Status: in_force

43-1013. Income tax surcharge for public education

(Caution:  1998 Prop. 105 applies)

A. In addition to any other tax imposed by this chapter, for taxable years beginning from and after December 31, 2020, there shall be levied, collected and paid an income tax surcharge to advance public education in this state as follows:

1. In the case of a single person or a married person filing separately, a surcharge at the rate of three and one-half percent of taxable income in excess of $250,000.

2. In the case of a married couple filing a joint return or a single person who is a head of household, a surcharge at the rate of three and one-half percent of taxable income in excess of $500,000.

B. Notwithstanding sections 42-1116 and 43-206, the department shall separately account for revenues collected pursuant to the income tax surcharge imposed by this section, and shall deposit those revenues in the student support and safety fund established by section 15-1281.

C. The income tax surcharge levied by this section must be collected regardless of whether the income tax rate brackets in this chapter are changed, replaced or eliminated by an act of the legislature.
A.R.S. § 43-1152 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1152
43-1152 Powers of corporation suspended for nonpayment of tax
Status: in_force

43-1152. Powers of corporation suspended for nonpayment of tax

Except for the purpose of amending the articles of incorporation to set forth a new name, the corporate powers, rights and privileges of a domestic corporation as defined in section 10-140 shall be suspended, and the exercise of the corporate powers, rights and privileges of a foreign corporation as defined in section 10-140 in this state shall be forfeited, if any of the following conditions occurs:

1. If any tax, penalty or interest, or any portion thereof, which is due and payable either at the time the return is required to be filed, or on or before the fifteenth day of the ninth month following the close of the income year, is not paid on or before 5:00 p.m. on the last day of the twelfth month after the close of the income year.

2. If any tax, penalty or interest, or any portion thereof, other than jeopardy or fraud assessments, due and payable upon notice and demand from the department, is not paid on or before 5:00 p.m. on the last day of the eleventh month following the due date of such tax.

3. If any jeopardy or fraud assessment, or any interest or penalty thereon, is not paid within forty days from the date of such tax, penalty and interest are due and payable upon notice and demand from the department, unless the bond permitted by section 42-1111, subsection B is filed to stay the collection of the tax, interest or penalty, and such tax, interest or penalty is paid within sixty days after notice by the department on the taxpayer's petition for reassessment.
A.R.S. § 43-212 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 212
43-212 Individual income tax model; fiscal impact requests; staff access
Status: in_force

43-212. Individual income tax model; fiscal impact requests; staff access

A. The department shall maintain an individual income tax model that estimates the fiscal impact of proposed individual income tax legislation.

B. The individual income tax model shall:

1. At a minimum, allow for the adjustment of individual income tax law parameters against an anonymized representative sample of individual income tax returns.

2. Include procedures to protect taxpayer confidentiality under applicable state and federal law.

C. The department shall accept requests from the joint legislative budget committee staff and legislative staff for estimates of the fiscal impact of proposed individual income tax legislation using the individual income tax model. The department shall fulfill any request under this subsection in a prompt and timely manner.

D. On completion of the integrated tax system modernization project developed pursuant to section 42-5041, the individual income tax model required by this section shall provide department staff, joint legislative budget committee staff and the governor's office of strategic planning and budgeting staff direct access to the individual income tax model so that individual income tax law parameters may be interactively adjusted to develop immediate fiscal impact estimates without any additional programming required for each estimate.
A.R.S. § 43-1165 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1165
43-1165 Credit for motion picture production costs; qualifications; data maintenance; rules; definitions
Status: in_force

43-1165. Credit for motion picture production costs; qualifications; data maintenance; rules; definitions

(Rpld. 1/1/44)

A. For taxable years beginning from and after December 31, 2022, a tax credit is allowed against production costs paid by a motion picture production company in this state that are subject to taxation by this state and that are directly attributable to a motion picture production. The amount of the credit shall be determined as follows:

1. An amount equal to a percentage of the total amount of the qualified production costs as approved by the Arizona commerce authority pursuant to section 41-1517 as follows:

(a) For a motion picture production company that spends up to $10,000,000, fifteen percent.

(b) For a motion picture production company that spends more than $10,000,000 but less than $35,000,000, seventeen and one-half percent.

(c) For a motion picture production company that spends more than $35,000,000, twenty percent.

2. An additional two and one-half percent of the motion picture production company's production labor costs related to positions held by residents of this state as approved by the Arizona commerce authority pursuant to section 41-1517.

3. If the motion picture production company either:

(a) Uses a qualified production facility in this state to produce the motion picture production, an additional two and one-half percent of the total amount of qualified production costs as approved by the Arizona commerce authority pursuant to section 41-1517.

(b) Films primarily at a practical location, produces and films the motion picture production primarily in this state and performs all preproduction, postproduction and editing at a qualified production facility in this state, an additional two and one-half percent of the total qualified production costs as approved by the Arizona commerce authority pursuant to section 41-1517.

4. An additional two and one-half percent of the total amount of qualified production costs as approved by the Arizona commerce authority pursuant to section 41-1517 if the motion picture production is produced and filmed in association with a long-term tenant of a qualified production facility.

B. Tax credits under this section may not exceed the amount provided in the postapproval issued by the Arizona commerce authority pursuant to section 41-1517, subsection H. The taxpayer must include a copy of the postapproval with the taxpayer's income tax return for the taxable year in which the Arizona commerce authority issued the postapproval.

C. The department may not allow a tax credit under this section to a taxpayer that has a delinquent tax balance owed to the department under this title.

D. To qualify for a tax credit under this section, the motion picture production company must:

1. Do either of the following:

(a) Use a qualified production facility in this state to produce the motion picture production.

(b) If the motion picture production is filmed primarily at a practical location, produce and film the motion picture production primarily in this state and perform all preproduction, postproduction and editing at an industry standard facility, if such a facility for those functions is available.

2. Maintain the motion picture production company's production labor positions in this state.

3. Include in the credits for each motion picture production an acknowledgment that the production was filmed in Arizona.

4. Receive preapproval and postapproval from the Arizona commerce authority pursuant to section 41-1517.

5. Claim the tax credit by using the form prescribed by the department and include the form with the motion picture production company's income tax return for the taxable year in which the Arizona commerce authority issued the postapproval.

E. Co-owners of a motion picture production company, including corporate partners in a partnership, may each claim the pro rata share of the tax credit allowed under this section based on ownership interest. The total of the tax credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

F. If the allowable tax credit for a taxable year exceeds the income taxes otherwise due on the claimant's income, or if there are no state income taxes due on the claimant's income, the amount of the claim not used as an offset against income taxes shall be paid to the taxpayer in the same manner as a refund under section 42-1118. Refunds made pursuant to this subsection are subject to setoff under section 42-1122. If the department determines that a refund is incorrect or invalid, the excess refund may be treated as a tax deficiency pursuant to section 42-1108.

G. The department shall maintain annual data on the total amount of monies credited pursuant to this section and shall provide the data to the Arizona commerce authority on request.

H. The department shall adopt fees and rules and publish and prescribe forms and procedures as necessary to administer this section and provide administrative support services.

I. The tax credit allowed by this section is in lieu of any allowance for state tax purposes of a deduction of those expenses allowed by the internal revenue code.

J. For the purposes of this section:

1. "Long-term tenant" means a person that enters into a lease of at least five years for the use of a qualified production facility.

2. "Motion picture production" has the same meaning prescribed in section 41-1517.

3. "Motion picture production company" has the same meaning prescribed in section 41-1517.

4. "Practical location" has the same meaning prescribed in section 41-1517.

5. "Production costs" has the same meaning prescribed in section 41-1517.

6. "Production labor" has the same meaning prescribed in section 41-1517.

7. "Qualified production facility" has the same meaning prescribed in section 41-1517.
A.R.S. § 43-1012 — Arizona Code / Title 43 / Chapter 10 / Article 2 / Section 1012
43-1012 Optional tax table
Status: in_force

43-1012. Optional tax table

A. In lieu of the tax imposed under section 43-1011, there shall be levied, collected and paid for each taxable year upon the taxable income of each individual who has been a resident of this state for the entire taxable year and whose taxable income for such year is less than fifty thousand dollars, regardless of filing status, a tax based on the rates prescribed by section 43-1011 as shown in optional tax tables developed by the department. The tables shall prescribe tax liability amounts, based on filing status, in fifty dollar increments of taxable income.

B. This section shall not apply to an individual filing a return for a period of less than twelve months on account of a change in the accounting period or to a married individual whose spouse files a return and computes the tax without regard to this section or section 43-1041, subsection A.

C. An individual, who is not a head of a household or a married person, shall be treated as a single person.
A.R.S. § 43-1094 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1094
43-1094 Adjusted gross income of a nonresident
Status: in_force

43-1094. Adjusted gross income of a nonresident

A. In computing Arizona adjusted gross income, a nonresident individual should make such adjustments as are included in sections 43-1021 and 43-1022 which apply to income included in his Arizona gross income except as provided in subsection B of this section.

B. For a nonresident individual the exemption allowed by section 43-1022, paragraph 1 shall be allowed in an amount equal to that percentage of the exemptions set forth in section 43-1023 which his Arizona gross income is of his federal adjusted gross income.
A.R.S. § 43-1157 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1157
43-1157 Clearance of revivor by corporation commission
Status: in_force

43-1157. Clearance of revivor by corporation commission

A. Before any certificate of revivor is issued by the department it shall obtain from the corporation commission an endorsement upon such application of the fact that such corporation then qualifies for revival of corporate powers, rights and privileges.

B. Upon the issuance of such certificate by the department, the taxpayer therein named shall become reinstated. Such reinstatement shall be without prejudice to any action, defense or right which has accrued by reason of the original suspension or forfeiture.

C. The certificate of revivor shall be prima facie evidence of such reinstatement and such certificate may be recorded in the office of the county recorder of any county of this state.

D. A copy of such certificate shall be forwarded to the corporation commission for its files.
A.R.S. § 43-402 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 402
43-402 Definition of "employer"
Status: in_force

43-402. Definition of "employer"

For the purposes of this article, "employer" means the person for whom an individual performs or performed any service of whatever nature, as the employee of such person including any officer or department of the state, any political subdivision or agency of the state, any city organized under a charter or any political body not a subdivision or agency of the state, except that if the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, "employer" means the person having control of the payment of such wages.
A.R.S. § 43-1077 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1077
43-1077 Credit for entity-level income tax
Status: in_force

43-1077. Credit for entity-level income tax

A. For taxable years beginning from and after December 31, 2021, a credit is allowed against the taxes imposed by this title for a taxpayer who is a partner in a partnership or a shareholder of an S corporation that elects to pay the tax under section 43-1014.

B. The amount of the credit is the portion of the tax paid by the partnership or S corporation under section 43-1014 that is attributable to the partner's or shareholder's share of income taxable in this state.

C. If the allowable credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.
A.R.S. § 43-583 — Arizona Code / Title 43 / Chapter 5 / Article 6 / Section 583
43-583 Payment of estimated tax by small business taxpayers; penalty; forms
Status: in_force

43-583. Payment of estimated tax by small business taxpayers; penalty; forms

A. A small business taxpayer that is subject to the tax imposed by chapter 17 of this title shall pay estimated tax during the small business taxpayer's taxable year if the small business taxpayer's tax liability under chapter 17 of this title for the taxable year is at least $1,000. The tax liability under chapter 17 of this title is the excess of the tax imposed by section 43-1711 over any tax credits allowed by chapter 17, article 5.

B. Except as otherwise provided in this section, the amount of the required annual estimated tax payment is the lesser of:

1. Ninety percent of the tax shown on the return for the taxable year or, if no return is filed, ninety percent of the tax for that year.

2. One hundred percent of the tax shown on the small business income tax return for the preceding taxable year, except that this paragraph does not apply if:

(a) The preceding taxable year was not a taxable year of twelve months.

(b) The small business did not file a return for the preceding taxable year showing a liability for tax.

3. Zero for taxable years beginning on or before December 31, 2021.

C. Four installments of estimated tax payments are required each taxable year.  The due dates for the installments are the due dates prescribed by section 6654 of the internal revenue code.  Unless otherwise prescribed by this section, the amount of each installment payment is twenty-five percent of the required annual estimated tax payment. If a taxable year begins on a date other than January 1, the installment payments are due during months of that fiscal year that correspond to the prescribed months of a calendar year.

D. If a taxpayer fails to pay the full amount of estimated tax or any required installment under this section, the taxpayer is subject to a penalty as prescribed by section 42-1125, subsection Q.  For the purposes of this subsection:

1. The amount of underpayment is the excess of the required installment payment over the amount, if any, of the installment paid on or before the due date for the payment.

2. A payment of estimated tax shall be credited against unpaid required installment payments in the order in which the installments are required to be paid.

E. The department shall:

1. Adopt rules that are necessary to administer and enforce this section.

2. Make available suitable forms and instructions to taxpayers who make estimated tax payments pursuant to this section.
A.R.S. § 43-947 — Arizona Code / Title 43 / Chapter 9 / Article 4 / Section 947
43-947 Consolidated returns by an affiliated group of corporations; definitions
Status: in_force

43-947. Consolidated returns by an affiliated group of corporations; definitions

A. On or before the due date, including any extensions, for filing the original return for taxable years beginning from and after December 31, 1993, the common parent of an affiliated group may elect to consolidate the taxable income of all members of the affiliated group, regardless of whether each member is subject to tax under this title.

B. The affiliated group shall file a consolidated return for the year of election and for each succeeding taxable year, unless the department consents to a change of filing method. The election under subsection A by the common parent of the affiliated group is not effective unless it is accompanied by written consents to the election signed by each of the members of the affiliated group. In taxable years after the year of the election, a corporation that was not a member of the Arizona affiliated group in the year of the election but is a member of the affiliated group in the current year is considered to have waived any objection to the filing of the consolidated return to this state by its consent, if any, to join in filing a federal consolidated return pursuant to section 1501 of the internal revenue code by the election previously made by the common parent of the Arizona affiliated group and by the consent of the other members of the Arizona affiliated group previously given and shall be included in the Arizona affiliated group.

C. The department may require a consolidated return for an affiliated group that is eligible, but has not elected, to file a consolidated return under this section if the department determines that a consolidated return is necessary to prevent evasion of taxes or to clearly reflect the taxable income that is attributable to the business conducted in this state by the affiliated group.

D. An affiliated group may file a consolidated return to this state only if the affiliated group properly elected or was required to file a consolidated federal return under section 1501 of the internal revenue code.

E. The Arizona gross income of an Arizona affiliated group is the consolidated federal taxable income of the affiliated group.

F. The affiliated group shall allocate and apportion its income to this state in the manner prescribed in chapter 11, article 4 of this title. For the purposes of allocation and apportionment of income, the Arizona affiliated group is considered to be and shall be treated as a single taxpayer.

G. The department may adopt administrative rules as appropriate to implement this title and title 42 as they relate to consolidated returns by Arizona affiliated groups.

H. For any tax year, all members of an Arizona affiliated group that elected or were required to file a consolidated return to this state under this section are jointly and severally liable for the taxes, interest and penalties of the Arizona affiliated group under this title and title 42.

I. As used in this section:

1. "Affiliated group" means the corporations that have properly elected or are required to file consolidated federal income tax returns under section 1501 of the internal revenue code.

2. "Arizona affiliated group" means the corporations for which a proper election to file a consolidated return under this section has been made or the corporations that are required to file a consolidated return under subsection C.
A.R.S. § 43-1413 — Arizona Code / Title 43 / Chapter 14 / Article 2 / Section 1413
43-1413 Year in which partnership income is includible
Status: in_force

43-1413. Year in which partnership income is includible

In computing the taxable income of a partner for a taxable year the inclusions required by section 43-1412 with respect to a partnership shall be based on the income, gain, loss, deduction or credit of the partnership for any taxable year of the partnership ending within or with the taxable year of the partner.
A.R.S. § 43-1023 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1023
43-1023 Exemptions for blind persons and persons sixty-five years of age or older
Status: in_force

43-1023. Exemptions for blind persons and persons sixty-five years of age or older

A. A taxpayer is allowed an exemption of $1,500:

1. For a taxpayer who is blind or if either the taxpayer's central visual acuity does not exceed 20/200 in the better eye with correcting lenses or the taxpayer's visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle not greater than twenty degrees.

2. For the taxpayer's spouse if a separate return is made by the taxpayer and if the spouse is blind as described in paragraph 1 of this subsection, has no Arizona adjusted gross income for the calendar year in which the taxable year of the taxpayer begins and is not the dependent of another taxpayer.  For the purposes of this paragraph, the determination of whether the spouse is blind shall be made at the close of the taxable year of the taxpayer. If the spouse dies during the taxable year, the determination shall be made as of the time of the spouse's death.

B. A taxpayer is allowed an exemption of $2,300 for:

1. Each person sixty-five years of age or older regardless of the person's relationship to the taxpayer:

(a) If the taxpayer pays more than one-fourth of the total cost of maintaining that person in a nursing care institution or residential care institution licensed pursuant to title 36, chapter 4, or an assisted living facility provider of a type certified pursuant to title 11, chapter 2, article 7, if such payments exceed $800 in the taxable year.

(b) If the taxpayer otherwise makes payments exceeding $800 in the taxable year for home health care or other types of medical care.

2. For taxable years beginning from and after December 31, 2003, each birth for which a certificate of birth resulting in stillbirth has been issued pursuant to section 36-330 if the child otherwise would have been a member of the taxpayer's household.  The taxpayer may claim the exemption under this paragraph only in the taxable year in which the stillbirth occurred.

C. For taxable years beginning from and after December 31, 1998, a resident taxpayer is allowed an exemption of $10,000 for each parent or ancestor of a parent of the taxpayer, who is sixty-five years of age or older, who requires assistance with activities of daily living and who lives in the taxpayer's principal residence for the entire taxable year, if the taxpayer pays more than one-half of the person's total support and maintenance costs. An exemption under this subsection is in lieu of an exemption under subsection B of this section for the same person.

D. An exemption under subsection B or C of this section is in lieu of claiming a credit for the same person under section 43-1073.01.

E. A taxpayer is allowed an exemption of $2,100:

1. If the taxpayer has attained sixty-five years of age before the close of the taxable year filing a separate or joint return and the taxpayer is not claimed as a dependent by another taxpayer.

2. For the taxpayer's spouse if the spouse has attained sixty-five years of age before the close of the taxable year, a joint return is filed and the spouse is not a dependent of another taxpayer.
A.R.S. § 43-102 — Arizona Code / Title 43 / Chapter 1 / Article 1 / Section 102
43-102 Declaration of intent
Status: in_force

43-102. Declaration of intent

A. It is the intent of the legislature by the adoption of this title to accomplish the following objectives:

1. To adopt the provisions of the federal internal revenue code relating to the measurement of adjusted gross income for individuals, to the end that adjusted gross income reported each taxable year by an individual to the internal revenue service shall be the identical sum reported to this state, subject only to modifications contained in this title.

2. To adopt the provisions of the federal internal revenue code relating to the measurement of taxable income for corporations, trusts, estates and partnerships, to the end that taxable income reported each taxable year by a corporation, trust, estate or partnership to the internal revenue service shall be the identical sum reported to this state, subject only to modifications contained in this title.

3. To achieve the results in paragraphs 1 and 2 by the application of the various provisions of the federal internal revenue code relating to the definitions of income, exceptions, deductions, accounting methods, taxation of individuals, corporations, trusts, estates and partnerships, basis and other pertinent provisions relating to gross income as defined, resulting in an amount called adjusted gross income for individuals and taxable income for corporations, trusts, estates and partnerships in the internal revenue code.

4. To impose on each resident of this state a tax measured by taxable income wherever derived.

5. To impose on each nonresident and each corporation with a business situs in this state a tax measured by taxable income which is the result of activity within or derived from sources within this state.

B. Nothing contained in this title shall be construed to require a taxpayer to include an item of income or permit a taxpayer to deduct an expense item more than once in computing Arizona taxable income.
A.R.S. § 43-1164 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1164
43-1164 Credit for solar energy devices; commercial and industrial applications
Status: in_force

43-1164. Credit for solar energy devices; commercial and industrial applications

A. For taxable years beginning from and after December 31, 2005 through December 31, 2018, a credit is allowed against the taxes imposed by this title for a taxpayer that is either:

1. Installing one or more solar energy devices, as defined in section 42-5001 and certified pursuant to section 41-1510.01, during the taxable year for commercial, industrial or any other nonresidential application in the taxpayer's facility located in this state.

2. The third party organization that financed, installed or manufactured the solar energy device that qualifies for the credit under paragraph 1 of this subsection if the taxpayer or an entity exempt from taxation under chapter 12 of this title who otherwise would qualify for this credit transfers the credit on a form prescribed by the department to the third party organization.

B. The amount of the credit is equal to ten per cent of the installed cost of the device.

C. The person who provides or installs the device shall furnish the taxpayer with an accounting of the cost to the taxpayer.

D. The taxpayer may not cumulate total tax credits under this section exceeding twenty-five thousand dollars with respect to the same building in the same year or fifty thousand dollars in total credits in any year.

E. If the allowable credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.

F. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest or financial investment in the system.  The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.
A.R.S. § 43-1072.01 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1072.01
43-1072.01 Credit for increased excise taxes paid
Status: in_force

43-1072.01. Credit for increased excise taxes paid

(Caution:  1998 Prop 105 applies)

A. Subject to the conditions prescribed by this section and if approved by the qualified electors voting at a statewide general election, for taxable years beginning from and after December 31, 2000 a credit is allowed against the taxes imposed by this chapter for a taxable year for a taxpayer who is not claimed as a dependent by any other taxpayer and whose federal adjusted gross income is:

1. Twenty-five thousand dollars or less for a married couple or a single person who is a head of a household.

2. Twelve thousand five hundred dollars or less for a single person or a married person filing separately.

B.  The credit is considered to be in mitigation of increased tax rates pursuant to section 42-5010, subsection G and section 42-5155, subsection D.

C. The amount of the credit shall not exceed twenty-five dollars for each person who is a resident of this state and for whom a personal or dependent exemption is allowed with respect to the taxpayer pursuant to section 43-1023, subsection B, paragraph 1 and section 43-1043, but not more than one hundred dollars for all persons in the taxpayer's household, as defined in section 43-1072.

D. If the allowable amount of the credit exceeds the income taxes otherwise due on the claimant's income, the amount of the claim not used as an offset against income taxes shall be paid in the same manner as a refund granted under section 42-1118.  Refunds made pursuant to this subsection are subject to setoff under section 42-1122.

E. The department shall make available suitable forms with instructions for claimants.  Claimants who certify on the prescribed form that they have no income tax liability for the taxable year and who do not meet the filing requirements of section 43-301 are not required to file an individual income tax return.  The claim shall be in a form prescribed by the department.

F. For taxable years beginning from and after December 31, 2002, a person who is sentenced for at least sixty days of the taxable year to the custody of the federal bureau of prisons, the state department of corrections or a county jail is not eligible to claim a credit pursuant to this section.

G. For taxable years beginning from and after December 31, 2014, any tax return or form prescribed by subsection E of this section must have:

1. A social security number that is valid for employment for the claimant.

2. Either a valid social security number or an individual taxpayer identification number issued by the internal revenue service for the claimant's spouse and any qualifying children of the claimant.
A.R.S. § 43-1092 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1092
43-1092 Intangible income of a nonresident
Status: in_force

43-1092. Intangible income of a nonresident

A. Except as provided in subsection B of this section, income of nonresidents from stocks, bonds, notes or other intangible personal property is not income from sources within this state unless the property has acquired a business situs within this state, except that if a nonresident buys or sells such property in this state or places orders with brokers within this state to buy or sell such property so regularly, systematically and continuously as to constitute doing business in this state, the profit or gain derived from such activity is income from sources within this state irrespective of the situs of the property. However, in no case shall transactions extending over a period of less than six months be deemed to constitute doing business in this state.

B. Any income received by nonresidents which is derived from a small business corporation making an election pursuant to section 43-1126 shall be considered taxable income of this state.
A.R.S. § 43-325 — Arizona Code / Title 43 / Chapter 3 / Article 2 / Section 325
43-325 Time for filing returns
Status: in_force

43-325. Time for filing returns

Unless otherwise indicated:

1. Returns made on the basis of the calendar year shall be filed on or before the fifteenth day of April following the close of the calendar year.

2. Returns made on the basis of a fiscal year shall be filed on or before the fifteenth day of the fourth month following the close of the fiscal year.

3. For taxable years beginning from and after December 31, 2015, partnership returns are due on or before the fifteenth day of the third month following the close of the taxable year.
A.R.S. § 43-1711 — Arizona Code / Title 43 / Chapter 17 / Article 2 / Section 1711
43-1711 Taxes and tax rate
Status: in_force

43-1711. Taxes and tax rate

If an Arizona small business taxpayer makes the election pursuant to section 43-302, there shall be levied, collected and paid for each taxable year on the Arizona small business taxable income taxes as determined in the following manner:

1. For taxable years beginning from and after December 31, 2020 through December 31, 2021, an amount equal to 3.5% of the Arizona small business taxable income.

2. For taxable years beginning from and after December 31, 2021 through December 31, 2022, an amount equal to 3.0% of the Arizona small business taxable income.

3. For taxable years beginning from and after December 31, 2022, an amount equal to 2.5% of the Arizona small business taxable income.
A.R.S. § 43-582 — Arizona Code / Title 43 / Chapter 5 / Article 6 / Section 582
43-582 Payment of estimated tax by corporations; penalty; forms
Status: in_force

43-582. Payment of estimated tax by corporations; penalty; forms

A. A corporation that is subject to the tax imposed by this title shall pay estimated tax during the corporation's taxable year if the corporation's tax liability under this title for the taxable year is at least one thousand dollars. The tax liability under this title is the excess of the tax imposed by section 43-1111 over any tax credits allowed by this title.

B. Except as otherwise provided in this section, the amount of the required annual payment is the lesser of:

1. Ninety per cent of the tax shown on the return for the taxable year or, if no return is filed, ninety per cent of the tax for that year.

2. One hundred per cent of the tax shown on the corporation's return for the preceding taxable year, except that this paragraph does not apply if:

(a) The preceding taxable year was not a taxable year of twelve months.

(b) The corporation did not file a return for the preceding taxable year showing a liability for tax.

C. The required annual payment under subsection B of this section for a large corporation is the amount prescribed by subsection B, paragraph 1 of this section except for purposes of determining the amount of the first required installment for the taxable year. Any reduction in the first installment by reason of this subsection shall be recaptured by increasing the amount of the next required installment determined under subsection B, paragraph 1 of this section by the amount of the reduction. For the purposes of this subsection, "large corporation" means a corporation or unitary group of corporations if the corporation, or a predecessor corporation, had federal taxable income of one million dollars or more for any of the immediately preceding three taxable years, excluding any federal net operating loss or capital loss carrybacks or carryovers.

D. The required annual payment for an S corporation, as defined in section 1361 of the internal revenue code, is the lesser of:

1. The amount determined under subsection B, paragraph 1 of this section.

2. The sum of:

(a) The amount determined under subsection B, paragraph 1 of this section for the portion of the tax liability under this title that is attributable to built in gains income or certain capital gains income.

(b) One hundred per cent of the tax liability under this title that is attributable to excess passive income on the return of the S corporation for the preceding taxable year.

E. For the purposes of subsection D of this section:

1. The requirement that the S corporation's return for the previous taxable year show a liability for tax related to excess passive income does not apply.

2. Subsection D, paragraph 2 of this section does not apply if the preceding taxable year had fewer than twelve months.

F. Four installments of payments of estimated tax are required each taxable year. The due dates for the installments are the due dates prescribed by section 6655 of the internal revenue code. Unless otherwise prescribed by this section, the amount of each installment payment is twenty-five per cent of the required annual payment, but a lower required installment payment, as established and in the manner prescribed by section 6655 of the internal revenue code, applies if the lower installment is less than twenty-five per cent of the required annual payment. If a taxable year begins on a date other than January 1, the installment payments are due during months of that fiscal year that correspond to the prescribed months of a calendar year.

G. If a taxpayer fails to pay the full amount of estimated tax, or any required installment, under this section, the taxpayer is subject to a penalty, as prescribed by section 42-1125, subsection Q. For the purposes of this subsection:

1. The amount of underpayment is the excess of the required installment payment over the amount, if any, of the installment paid on or before the due date for the payment.

2. A payment of estimated tax shall be credited against unpaid required installment payments in the order in which the installments are required to be paid.

H. The department shall:

1. Apply this section to taxable years of less than twelve months according to the treasury regulations for section 6655 of the internal revenue code.

2. Adopt rules that are necessary to administer and enforce this section.

3. Make available suitable forms and instructions to taxpayers that make estimated tax payments pursuant to this section.
A.R.S. § 43-1603 — Arizona Code / Title 43 / Chapter 16 / Article 1 / Section 1603
43-1603 Operational requirements for school tuition organizations; notice; qualified schools
Status: in_force

43-1603. Operational requirements for school tuition organizations; notice; qualified schools

A. A certified school tuition organization must be established to receive contributions from taxpayers for the purposes of income tax credits under sections 43-1089 and 43-1089.03 and to pay educational scholarships or tuition grants to allow students to attend any qualified school of their parents' choice.

B. To be eligible for certification and retain certification, the school tuition organization:

1. Must allocate at least ninety percent of its annual revenue from contributions made for the purposes of sections 43-1089 and 43-1089.03 for educational scholarships or tuition grants.

2. Shall not limit the availability of educational scholarships or tuition grants to only students of one school.

3. May allow donors to recommend student beneficiaries, but shall not award, designate or reserve scholarships solely on the basis of donor recommendations.

4. Shall not allow donors to designate student beneficiaries as a condition of any contribution to the organization, or facilitate, encourage or knowingly allow the exchange of beneficiary student designations in violation of section 43-1089, subsection F, section 43-1089.03, subsection F and section 43-1089.04, subsection E.

5. Shall include on the organization's website, if one exists, the percentage and total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year to:

(a) Students whose family income meets the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced-price lunches.

(b) Students whose family income exceeds the threshold prescribed by subdivision (a) of this paragraph but does not exceed one hundred eighty-five percent of the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced-price lunches.

6. Must not award educational scholarships or tuition grants to students who are simultaneously enrolled in a district school or charter school and a qualified school.

C. A school tuition organization shall include the following notice in any printed materials soliciting donations, in applications for scholarships and on its website, if one exists:

Notice

A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of a donor's recommendation.

A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent.

D. In evaluating applications and awarding, designating or reserving scholarships, a school tuition organization:

1. Shall not award, designate or reserve a scholarship solely on the recommendation of any person contributing money to the organization, but may consider the recommendation among other factors.

2. Shall consider the financial need of applicants.

E. A taxpayer's contribution to a school tuition organization that exceeds the amount of the credit allowed by section 43-1089 but does not exceed the amount of the credit allowed by section 43-1089.03 is considered a contribution pursuant to section 43-1089.03. A school tuition organization must use at least ninety percent of contributions made pursuant to section 43-1089.03 for educational scholarships or tuition grants for students to whom any of the following applies:

1. Attended a governmental primary or secondary school as a full-time student as defined in section 15-901 or attended a preschool program that offers services to students with disabilities at a governmental school for at least ninety days of the prior fiscal year and transferred from a governmental school to a qualified school.

2. Enroll in a qualified school in a kindergarten program or a preschool program that offers services to students with disabilities.

3. Are the dependent of a member of the armed forces of the United States who is stationed in this state pursuant to military orders.

4. Are homeschooled before enrolling in a qualified school.

5. Moved to this state from out of state before enrolling in a qualified school.

6. Participated in an Arizona empowerment scholarship account and did not renew the account or accept the scholarship in order to accept a scholarship or tuition grant under this section.

7. Subject to subsection H of this section, are placed in foster care pursuant to title 8, chapter 4 at any time before the student graduates from high school or obtains a general equivalency diploma and who meet all of the following criteria:

(a) Are unable to attend a governmental primary or secondary school as a full-time student as defined in section 15-901. For the purposes of this subdivision, "unable to attend" means the student has been expelled or asked not to return due to the student's behavior or the school is not able to provide necessary services to the student.

(b) Have not attended a governmental primary or secondary school as a full-time student as defined in section 15-901 for at least ninety days of the prior fiscal year or one full semester before enrolling in a qualified school.

(c) The qualified school in which the students are enrolling is only considered because a governmental primary or secondary school cannot meet the students' unique needs, such as severe medical or behavioral needs that require specialized programs.

(d) Are unable to receive other scholarships or tuition grants under this chapter or chapter 15 of this title in an amount that is equal to the cost of tuition to attend the qualified school.

8. Received an educational scholarship or tuition grant under paragraph 1, 2, 3, 4, 5, 6 or 7 of this subsection or under chapter 15 of this title if the student continues to attend a qualified school in a subsequent year.

F. In awarding educational scholarships or tuition grants from contributions made pursuant to section 43-1089.03, a school tuition organization shall give priority to students and siblings of students on a waiting list for scholarships if the school tuition organization maintains a waiting list.

G. If an individual educational scholarship or tuition grant exceeds the school's tuition, the amount in excess shall be returned to the school tuition organization that made the award or grant. The school tuition organization may allocate the returned monies as a multiyear award for that student and report the award pursuant to section 43-1604, subsection A, paragraph 5, subdivision (b) or may allocate the returned monies for educational scholarships or tuition grants for other students.

H. If a court of competent jurisdiction issues a final judgment that the aggregate tax credit limit prescribed in section 43-1183, subsection C, paragraph 1 is unenforceable and that judgment is no longer subject to further appeal or review, a school tuition organization shall not issue an educational scholarship or a tuition grant under subsection E, paragraph 7 or 8 of this section for children who received an educational scholarship or a tuition grant under subsection E, paragraph 7 of this section.
A.R.S. § 43-1014 — Arizona Code / Title 43 / Chapter 10 / Article 2 / Section 1014
43-1014 Entity-level tax election; partnerships; S�corporations; rules
Status: in_force

43-1014. Entity-level tax election; partnerships; S corporations; rules

A. For taxable years beginning from and after December 31, 2021, the partners or shareholders of a business that is treated as a partnership or S corporation for federal income tax purposes may consent to be taxed at the entity level at a tax rate that is the same as the highest tax rate prescribed by section 43-1011 applicable to the entire portion of its taxable income that is attributable to its resident partners or shareholders and the portion of its taxable income derived from sources within this state that is attributable to its nonresident partners or shareholders for that taxable year.  The election under this subsection is made by filing the business's return under this title.

B. If the election is made under subsection A of this section, all of the following apply:

1. The taxable income of the partnership or S corporation is as follows:

(a) For a partnership:

(i) For taxable years through December 31, 2022, the Arizona taxable income determined under chapter 14 of this title.

(ii) For taxable years beginning from and after December 31, 2022, the Arizona taxable income determined under chapter 14 of this title, including the items that require separate computation under section 43-1412, paragraphs 1 through 16.

(b) For an S corporation, the total of all distributive income passed through to the shareholders under section 43-1126, subsection B.

2. If the partnership or S corporation does not pay the amount owed to the department as a result of the election under this section, the department may collect the amount from the partners or shareholders based on the proportionate share of income that is attributable to each partner or shareholder for Arizona tax purposes.

3. The partnership or S corporation shall pay estimated tax pursuant to section 43-581 as necessary.

C. The election under subsection A of this section does not apply to the following:

1. Partners or shareholders that are not individuals, estates or trusts. The portion of the taxable income attributable to a partner or shareholder that is not an individual, estate or trust is not included in the entity-level tax under subsection A of this section.

2. Partners or shareholders who are individuals, estates or trusts and who opt out of the election pursuant to subsection D of this section. The portion of the taxable income attributable to a partner or shareholder who is an individual, estate or trust and who opts out of the election pursuant to subsection D of this section is not included in the entity-level tax under subsection A of this section.

D. A partnership or S corporation that intends to make the election under subsection A of this section shall notify all partners or shareholders who are individuals, estates or trusts of the intent to make the election and that each partner or shareholder who is an individual, estate or trust has the right to opt out of the election. The notice shall allow each partner or shareholder who is an individual, estate or trust at least sixty days after receiving the notice to notify the partnership or S corporation that the partner or shareholder who is an individual, estate or trust is exercising the partner's or shareholder's right to opt out of the election.  If the partner or shareholder who is an individual, estate or trust does not respond within the sixty-day period or waives the right to opt out, the partner or shareholder will be included in the election.

E. The department shall adopt rules and prescribe forms and procedures as necessary to administer this section.
A.R.S. § 43-404 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 404
43-404 Extension of withholding to pensions, annuities, retirement accounts; definitions
Status: in_force

43-404. Extension of withholding to pensions, annuities, retirement accounts; definitions

A. For the purposes of this title, a payment from a pension or annuity or a distribution from a retirement account to an individual, if at the time the payment or distribution is made a request by the individual that such pension, annuity, retirement account be subject to withholding under this section is in effect, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.

B. A request that payment from a pension or annuity or distribution from a retirement account be subject to withholding under this section shall be made by the payee in writing to the person that is making the pension or annuity payments or retirement account distributions and shall be accompanied by a form, prescribed by the department, executed in accordance with section 43-401, subsection E.  Such a request may be denied or terminated by furnishing to the person making the payment or distribution a written statement of denial or termination.

C. Distributions from a retirement account are eligible for withholding, but only to the extent that amount is includable in the Arizona gross income of the individual who receives the distribution.

D. A request to initiate, adjust or terminate withholding under this section may be executed in writing by paper or electronic means on either a paper form prescribed by the department or the form's electronic equivalent.

E. For the purposes of this section:

1. "Annuity" means either of the following:

(a) An employee annuity authorized under the internal revenue code paid to an individual, but only to the extent that the amount is includable in the Arizona gross income of such individual.

(b) Specified income payable at stated intervals to an individual for a fixed or contingent period, often for that individual's life, but only to the extent that the amount is includable in the Arizona gross income of such individual.

2. "Pension" means either of the following:

(a) A defined benefit plan authorized under the internal revenue code paid to an individual, but only to the extent that amount is includable in the Arizona gross income for such individual.

(b) Periodic, fixed amount retirement payments made by the United States military, the United States civil service or a state or local government or a private employer to former employees and surviving spouses of former employees for prior services performed, but only to the extent that amount is includable in the Arizona gross income of such individuals.

3. "Retirement account" includes:

(a) A qualified retirement plan under sections 401, 403 and 457 of the internal revenue code.

(b) An individual retirement account under section 408 of the internal revenue code, including a simplified employee pension fund as defined in section 408(k) of the internal revenue code and a simple retirement account as defined in section 408(p) of the internal revenue code.
A.R.S. § 43-1025 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1025
43-1025 Agricultural crops contributed to charitable organizations; definitions
Status: in_force

43-1025. Agricultural crops contributed to charitable organizations; definitions

A. In computing Arizona taxable income a subtraction is allowed for qualified crop contributions during the taxable year to one or more charitable organizations. It is not considered to be a double deduction to include both costs of producing the crop and the subtraction in computing Arizona taxable income.

B. The amount of the subtraction shall not:

1. Exceed the wholesale market price or the most recent sale price for the contributed crop, whichever is greater.

2. Include any amount deducted pursuant to section 170 of the internal revenue code with respect to crop contribution that exceeds the cost of producing the contributed crop.

C. The contribution qualifies for a subtraction under this section only if all of the following apply:

1. The use of the crop by the donee charitable organization is related to the purpose or function constituting the basis of the organization's tax-exempt status.

2. The crop is not transferred by the donee charitable organization in exchange for money, other property or services.

3. The donee charitable organization provides a written statement to the taxpayer that its use and disposition of the crop will comply with the requirements of this section.

D. For purposes of this section:

1. "Most recent sale price" means an amount equal to the price that the taxpayer would have received for the contributed crop, determined as if the crop had been sold by that taxpayer on the date of the most recent sale of such a crop and at the same price per unit as the crop that was sold on that date or at the price determined by an agricultural market service on the date the crop is contributed.

2. "Qualified crop contribution" means any contribution of a crop or portion of a crop grown in Arizona by a taxpayer engaged in the trade or business of farming or processing agriculture crops to a charitable organization located in Arizona that is exempt from tax under section 43-1201.

3. "Wholesale market price" means the average wholesale market price for the contributed crop in the nearest regional market during the month in which the contribution is made, determined without consideration of grade or quality of the crop and as if the quantity of the contributed crop was marketable.
A.R.S. § 43-1126 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1126
43-1126 Small business corporation; election as to taxable status; return; termination
Status: in_force

43-1126. Small business corporation; election as to taxable status; return; termination

A. A small business corporation which makes an election for a taxable year pursuant to subtitle A, chapter 1, subchapter S of the internal revenue code is not subject to the taxes imposed by this chapter for such year but only to the extent such corporation is not subject to federal income taxes.

B. An electing small business corporation shall file with the department an annual return, in a form prescribed by the department, on or before the fifteenth day of the third month following the close of the taxable year. The return shall show the name and address of each stockholder of the corporation and their respective pro rata share of income or loss. The allocation and apportionment of income of a small business corporation which has nonresident stockholders shall be made pursuant to article 4 of this chapter.

C. An election under this section is effective for the taxable year for which it is made and for all succeeding taxable years unless the corporation terminates its election pursuant to section 1372 of the internal revenue code.
A.R.S. § 43-1158 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1158
43-1158 Treatment of installment obligations on cessation of corporate activities
Status: in_force

43-1158. Treatment of installment obligations on cessation of corporate activities

If a corporation has elected to report income from the sale or other disposition of property on the installment method, and the entire income from the sale has not been reported before the year the corporation ceases to be subject to the tax imposed by this title, the corporation shall report the unreported income in the last year in which the corporation is subject to the tax. This section does not apply if the installment obligation is transferred pursuant to a reorganization to another taxpayer subject to tax under this title as the transferee, but capital losses of the transferee may not be used to offset income from the installment obligation transferred from a corporation which has ceased to be subject to the tax.
A.R.S. § 43-901 — Arizona Code / Title 43 / Chapter 9 / Article 1 / Section 901
43-901 Taxable income computation
Status: in_force

43-901. Taxable income computation

Taxable income shall be computed on the basis of the taxpayer's taxable year as defined in section 441 of the internal revenue code.
A.R.S. § 43-1074.02 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1074.02
43-1074.02 Credit for investment in qualified small businesses
Status: in_force

43-1074.02. Credit for investment in qualified small businesses

A. For taxable years beginning from and after December 31, 2006 through December 31, 2034, a credit is allowed against the taxes imposed by this title for investment made after June 30, 2006 in qualified small businesses. The amount of the credit is the amount determined and authorized by the Arizona commerce authority as provided by section 41-1518.

B. To claim the credit under this section, the taxpayer shall attach to its tax return a copy of the Arizona commerce authority certification provided pursuant to section 41-1518. A credit is not allowed under this section unless the taxpayer provides the certification.

C. The basis of any investment with respect to which the taxpayer has claimed a credit under this section shall be reduced by the amount of the credit claimed with respect to that investment.

D. If the allowable tax credit exceeds the taxes due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset the taxes under this title may be carried forward to the next three consecutive taxable years as a credit against subsequent years' income tax liability.

E. Individuals who are co-owners of a business, including partners in a partnership and shareholders of an S corporation as defined in section 1361 of the internal revenue code, may each claim only their individual pro rata shares of the credit allowed under this section based on their ownership interests. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

F. If the department of revenue determines that there has been a misrepresentation on an application submitted to the Arizona commerce authority under section 41-1518, the department of revenue shall deny the credit if the misrepresentation relates to whether the applicant was a qualified investor or made a qualified investment. If the misrepresentation relates to whether the investment was made to:

1. A qualified small business, the department of revenue shall deny the credit only if the applicant knew or should have known at any time before the certification that the representation was false.

2. A bioscience enterprise or a business that maintains its principal place of business in a rural county in this state, the department of revenue shall decrease the amount of the credit that would have been allowed only if the applicant knew or should have known at any time before the certification that the representation was false.
A.R.S. § 43-1701 — Arizona Code / Title 43 / Chapter 17 / Article 1 / Section 1701
43-1701 Definitions
Status: in_force

43-1701. Definitions

In this chapter, unless the context otherwise requires:

1. "Arizona small business" means an activity that generates Arizona small business gross income.

2. "Arizona small business adjusted gross income" of a resident taxpayer means the Arizona small business gross income subject to the adjustments provided in article 3 of this chapter.

3. "Arizona small business gross income" of a resident taxpayer:

(a) Means the sum of the amounts, whether positive or negative, that are included in a taxpayer's federal adjusted gross income for the taxable year, computed pursuant to the internal revenue code, and that are reported on the following schedules and forms or on equivalent successor schedules and forms designated by the internal revenue service:

(i) Schedule B, interest and ordinary dividends.

(ii) Schedule C, profit or loss from business.

(iii) Schedule E, supplemental income or loss.

(iv) Schedule F, profit or loss from farming.

(v) Form 4797, sale of business property.

(vi) Form 4835, farm rental income and expenses.

(b) Includes any amount reported on schedule D, capital gains and losses, that is recognized with respect to either the taxable disposition of an ownership interest in any entity other than a publicly traded entity, or the taxable disposition of capital assets used in connection with a trade or business activity, including goodwill and going concern value.

4. "Arizona small business taxable income" of a resident taxpayer means the Arizona small business adjusted gross income minus any deductions allowable in article 4 of this chapter.
A.R.S. § 43-1411 — Arizona Code / Title 43 / Chapter 14 / Article 2 / Section 1411
43-1411 Partnership, individual partnership liability
Status: in_force

43-1411. Partnership, individual partnership liability

An individual carrying on a business in partnership shall be liable for income tax only in his individual capacity.
A.R.S. § 43-409 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 409
43-409 Job creation withholdings clearing account
Status: in_force

43-409. Job creation withholdings clearing account

A. The job creation withholdings clearing account is established consisting of $10,500,000 in each fiscal year.

B. On the twentieth day of each month, the state treasurer shall credit the following amounts from the clearing account:

1. To the Arizona commerce authority fund established by section 41-1506, one-twelfth of the annual sum of $10,000,000 in each fiscal year.

2. To the Arizona competes fund established by section 41-1545.01, one-twelfth of the annual sum of $500,000 in each fiscal year.
A.R.S. § 43-1148 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1148
43-1148 Apportionment by department
Status: in_force

43-1148. Apportionment by department

A. If the allocation and apportionment provisions of this article do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for or the department may require, in respect to all or any part of the taxpayer's business activity, if reasonable, any of the following:

1. Separate accounting, except with respect to an Arizona affiliated group, as defined in section 43-947.

2. The exclusion of any one or more of the factors.

3. The inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state.

4. The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income, other than disallowing a properly elected consolidated return.

B. If the department, in the exercise of its discretion, determines that an adjustment is necessary pursuant to subsection A of this section, it may, in its discretion, authorize such an adjustment for a period of not less than one taxable year.
A.R.S. § 43-203 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 203
43-203 Severability
Status: in_force

43-203. Severability

If any provision of this title be held invalid, such invalidity shall not affect other provisions which can be given effect without the invalid provision and to this end the provisions of this title are declared to be severable.
A.R.S. § 43-1074 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1074
43-1074 Credit for new employment
Status: in_force

43-1074. Credit for new employment

A. For taxable years beginning from and after June 30, 2011, a credit is allowed against the taxes imposed by this title for net increases in full-time employees residing in this state and hired in qualified employment positions in this state as computed and certified by the Arizona commerce authority pursuant to section 41-1525.

B. Subject to subsection F of this section, the amount of the credit is equal to:

1. Three thousand dollars for each full-time employee hired in a qualified employment position in the first year or partial year of employment.  Employees hired in the last ninety days of the taxable year are excluded for that taxable year and are considered to be new employees in the following taxable year.

2. Three thousand dollars for each full-time employee in a qualified employment position for the full taxable year in the second year of continuous employment.

3. Three thousand dollars for each full-time employee in a qualified employment position for the full taxable year in the third year of continuous employment.

C. The capital investment and the new qualified employment positions requirements of section 41-1525, subsection B must be accomplished within twelve months after the start of the required capital investment. A credit may not be claimed until both requirements are met. A business that meets the requirements of section 41-1525, subsection B for a location is eligible to claim first year credits for three years beginning with the taxable year in which those requirements are completed.  Employees hired at the location before the beginning of the taxable year but during the twelve-month period allowed in this subsection are considered to be new employees for the taxable year in which all of those requirements are completed. The employees that are considered to be new employees for the taxable year under this subsection shall not be included in the average number of full-time employees during the immediately preceding taxable year until the taxable year in which all of the requirements of section 41-1525, subsection B are completed.  An employee working at a temporary worksite in this state while the designated location is under construction is considered to be working at the designated location if all of the following occur:

1. The employee is hired after the start of the required investment at the designated location.

2. The employee is hired to work at the designated location after it is completed.

3. The payroll for the employees destined for the designated location is segregated from other employees.

4. The employee is moved to the designated location within thirty days after its completion.

D. To qualify for a credit under this section, the taxpayer and the employment positions must meet the requirements prescribed by section 41-1525.

E. A credit is allowed for employment in the second and third year only for qualified employment positions for which a credit was claimed and allowed in the first year.

F. The net increase in the number of qualified employment positions is the lesser of the total number of filled qualified employment positions created at the designated location or locations during the taxable year or the difference between the average number of full-time employees in this state in the current taxable year and the average number of full-time employees in this state during the immediately preceding taxable year.  The net increase in the number of qualified employment positions computed under this subsection may not exceed the difference between the average number of full-time employees in this state in the current taxable year and the average number of full-time employees in this state during the immediately preceding taxable year.

G. If the allowable tax credit exceeds the income taxes otherwise due on the claimant's income, or if there are no state income taxes due on the claimant's income, the amount of the claim not used as an offset against the income taxes may be carried forward as a tax credit against subsequent years' income tax liability for a period not exceeding five taxable years.

H. Co-owners of a business, including partners in a partnership and shareholders of an S corporation, as defined in section 1361 of the internal revenue code, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest.  The total of the credits allowed all such owners of the business may not exceed the amount that would have been allowed for a sole owner of the business.

I. If the business is sold or changes ownership through reorganization, stock purchase or merger, the new taxpayer may claim first year credits only for the qualified employment positions that it created and filled with an eligible employee after the purchase or reorganization was complete.  If a person purchases a taxpayer that had qualified for first or second year credits or changes ownership through reorganization, stock purchase or merger, the new taxpayer may claim the second or third year credits if it meets other eligibility requirements of this section.  Credits for which a taxpayer qualified before the changes described in this subsection are terminated and lost at the time the changes are implemented.

J. A failure to timely report and certify to the Arizona commerce authority the information prescribed by section 41-1525, subsection E, and in the manner prescribed by section 41-1525, subsection F disqualifies the taxpayer from the credit under this section.  The department shall require written evidence of the timely report to the Arizona commerce authority.

K. A tax credit under this section is subject to recovery for a violation described in section 41-1525, subsection H.

L. For the purposes of subsection B, paragraphs 2 and 3 of this section, if a full-time employee in the qualified employment position leaves during the taxable year, the employee may be replaced with another new full-time employee in the same employment position and the new employee will be treated as being in the employee's second or third full year of continuous employment for the purposes of the credit under this section if:

1. The total time the position was vacant from the date the employment position was originally filled to the end of the current tax year totals ninety days or less.

2. The new employee meets all of the same requirements as the original employee was required to meet.
A.R.S. § 43-611 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 611
43-611 Protest of tax deemed claim for refund
Status: in_force

43-611. Protest of tax deemed claim for refund

If, with or after the filing of a protest or an appeal with the department of revenue, state board of tax appeals or the superior court, a taxpayer pays the tax protested or appealed before the department, board or superior court acts upon the protest or the appeal, such body shall treat the protest or the appeal as a claim for refund or an appeal from the denial of a claim for refund filed under this article.
A.R.S. § 43-306 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 306
43-306 Partnership returns
Status: in_force

43-306. Partnership returns

A. Except as provided in subsections B and C of this section, every partnership shall make a return for each taxable year, stating the taxable income computed in accordance with subtitle A, chapter 1, subchapter K of the internal revenue code and any adjustments required pursuant to chapter 14 of this title.  The return shall include the names and addresses of the individuals, whether residents or nonresidents, who would be entitled to share in the taxable income if distributed and the amount of the distributive share of each individual.  The allocation and apportionment of income of a partnership that has nonresident partners shall be made pursuant to chapter 11, article 4 of this title.  The return shall contain or be verified by a written declaration that it is made under the penalties of perjury and signed by one of the partners.

B. An out-of-state partnership that is temporarily in this state and whose only income in this state is from performing disaster recovery from a declared disaster during a disaster period as defined in section 42-1130 is not required to file a partnership return in this state.

C. A partnership that has no Arizona income, deductions or credits for a taxable year is not required to file a partnership return for that year.
A.R.S. § 43-615 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 615
43-615 Contribution to game, nongame, fish and endangered species fund
Status: in_force

43-615. Contribution to game, nongame, fish and endangered species fund

A. The department shall provide a space on the individual income tax return form in which the taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the game, nongame, fish and endangered species fund established pursuant to section 17-268.

B. After subtracting any setoff for debts pursuant to section 42-1122, the department shall subtract the designated amount from the refund due the taxpayer and transfer it to the Arizona game and fish commission for deposit in the fund.

C. The taxpayer may also donate any amount to the game, nongame, fish and endangered species fund, in lieu of or in addition to the designated portion of the income tax refund, by an appropriate indication on the return and by including such amount with the return.
A.R.S. § 43-613 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 613
43-613 Contribution to child abuse prevention fund
Status: in_force

43-613. Contribution to child abuse prevention fund

A. Unless not required pursuant to subsection B of this section, the department shall provide a space on the individual income tax return form in which the taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the child abuse prevention fund established under section 8-550.01.

B. After subtracting any setoff for debts pursuant to section 42-1122 the department of revenue shall subtract the designated amount from the refund due the taxpayer and transfer it to the department of child safety for credit to the fund.  The department of child safety shall separately account for the monies in the fund derived from contributions under this section and notify the department of revenue if such monies exceed ten million dollars. If these monies do exceed ten million dollars on June 30, this section does not apply and the department of revenue shall not provide the space otherwise required by this section on the tax return for that taxable year.

C. The taxpayer may also donate any amount to the child abuse prevention fund, in lieu of or in addition to the designated portion of the income tax refund, by an appropriate indication on the return and by including that amount with the return.
A.R.S. § 43-204 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 204
43-204 Repeal; savings clause
Status: repealed

43-204. Repeal; savings clause

The "income tax act of 1933", being sections 73-1501 to 73-1551, inclusive, as amended, Arizona code of 1939, is repealed. The "income tax act of 1954", as amended, Arizona Revised Statutes of 1956, is also repealed. Such repeals shall not affect any act done or any right accruing or accrued, or any suit or proceeding had or commenced in any civil cause before such repeals, but all rights and liabilities under such acts shall continue, and may be enforced in the same manner, as if such repeals had not been made. All offenses committed, and all penalties, assessments or forfeitures incurred or imposed under such acts repealed, may be prosecuted and punished in the same manner and with the same effect as if this title had not been passed.
A.R.S. § 43-1089.04 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1089.04
43-1089.04 Pro rata credit for business contributions by S corporation school tuition organizations; definition
Status: in_force

43-1089.04. Pro rata credit for business contributions by S corporation school tuition organizations; definition

A. A credit is allowed against the taxes imposed by this title for the pro rata amount of contributions made by an S corporation pursuant to section 43-1183, subsection F or section 43-1184, subsection F, or both.  To qualify for the credit:

1. The aggregate contribution in the taxable year must be at least five thousand dollars.

2. All other requirements of section 43-1183 or 43-1184 and the applicable sections of chapter 15 of this title must be met.

B. Co-owners of the S corporation may each claim the pro rata share of the credit allowed under sections 43-1183 and 43-1184 based on the taxpayer's ownership interest. The total of the credits allowed all the owners of the corporation may not exceed the amount that would have been allowed a sole owner of the corporation.

C. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.

D. The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.

E. The tax credit is not allowed if the S corporation or a shareholder designates the contribution to the school tuition organization for the direct benefit of any dependent of a shareholder of the corporation claiming a credit under this section or if the corporation or a shareholder designates a student beneficiary as a condition of the contribution to the school tuition organization. The tax credit is not allowed if the corporation or a shareholder, with the intent to benefit a shareholder's dependent, agrees with one or more other taxpayers to designate reciprocal contributions to school tuition organizations for the direct benefit of the other taxpayer's dependent.

F. For the purposes of this section, "S corporation" or "corporation" means an S corporation as defined in section 1361 of the internal revenue code.
A.R.S. § 43-1011 — Arizona Code / Title 43 / Chapter 10 / Article 2 / Section 1011
43-1011 Taxes and tax rates
Status: in_force

43-1011. Taxes and tax rates

(L21, Ch. 411, sec. 4)

A. There shall be levied, collected and paid for each taxable year on the entire taxable income of every resident of this state and on the entire taxable income of every nonresident that is derived from sources within this state taxes determined in the following manner:

1. For taxable years beginning from and after December 31, 1996 through December 31, 1997:

(a) In the case of a single person or a married person filing separately:

If taxable income is:     The tax is:

$0 — $10,000     2.90% of taxable income

$10,001 — $25,000      $290, plus 3.30% of the excess over $10,000

$25,001 — $50,000      $785, plus 3.90% of the excess over $25,000

$50,001 — $150,000     $1,760, plus 4.80% of the excess over $50,000

$150,001 and over $6,560, plus 5.17% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:     The tax is:

$0 — $20,000      2.90% of taxable income

$20,001 — $50,000      $580, plus 3.30% of the excess over $20,000

$50,001 — $100,000     $1,570, plus 3.90% of the excess over $50,000

$100,001 — $300,000    $3,520, plus 4.80% of the excess over $100,000

$300,001 and over $13,120, plus 5.17% of the excess over $300,000

2. For taxable years beginning from and after December 31, 1997 through December 31, 1998:

(a) In the case of a single person or a married person filing separately:

If taxable income is:     The tax is:

$0 — $10,000     2.88% of taxable income

$10,001 — $25,000      $288, plus 3.24% of the excess over $10,000

$25,001 — $50,000      $774, plus 3.82% of the excess over $25,000

$50,001 — $150,000     $1,729, plus 4.74% of the excess over $50,000

$150,001 and over $6,469, plus 5.10% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:     The tax is:

$0 — $20,000     2.88% of taxable income

$20,001 — $50,000      $576, plus 3.24% of the excess over $20,000

$50,001 — $100,000     $1,548, plus 3.82% of the excess over $50,000

$100,001 — $300,000    $3,458, plus 4.74% of the excess over $100,000

$300,001 and over $12,938, plus 5.10% of the excess over $300,000

3. For taxable years beginning from and after December 31, 1998 through December 31, 2005:

(a) In the case of a single person or a married person filing separately:

If taxable income is:     The tax is:

$0 — $10,000     2.87% of taxable income

$10,001 — $25,000      $287, plus 3.20% of the excess over $10,000

$25,001 — $50,000      $767, plus 3.74% of the excess over $25,000

$50,001 — $150,000     $1,702, plus 4.72% of the excess over $50,000

$150,001 and over $6,422, plus 5.04% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:     The tax is:

$0 — $20,000     2.87% of taxable income

$20,001 — $50,000      $574, plus 3.20% of the excess over $20,000

$50,001 — $100,000     $1,534, plus 3.74% of the excess over $50,000

$100,001 — $300,000    $3,404, plus 4.72% of the excess over $100,000

$300,001 and over $12,844, plus 5.04% of the excess over $300,000

4. For taxable years beginning from and after December 31, 2005 through December 31, 2006:

(a) In the case of a single person or a married person filing separately:

If taxable income is:     The tax is:

$0 — $10,000     2.73% of taxable income

$10,001 — $25,000      $273, plus 3.04% of the excess over $10,000

$25,001 — $50,000      $729, plus 3.55% of the excess over $25,000

$50,001 — $150,000     $1,617, plus 4.48% of the excess over $50,000

$150,001 and over $6,097, plus 4.79% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:     The tax is:

$0 — $20,000     2.73% of taxable income

$20,001 — $50,000      $546, plus 3.04% of the excess over $20,000

$50,001 — $100,000     $1,458, plus 3.55% of the excess over $50,000

$100,001 — $300,000    $3,233, plus 4.48% of the excess over $100,000

$300,001 and over $12,193, plus 4.79% of the excess over $300,000

5. Subject to subsections B and C of this section, for taxable years beginning from and after December 31, 2006 through December 31, 2018:

(a) In the case of a single person or a married person filing separately:

If taxable income is:     The tax is:

$0 — $10,000     2.59% of taxable income

$10,001 — $25,000      $259, plus 2.88% of the excess over $10,000

$25,001 — $50,000      $691, plus 3.36% of the excess over $25,000

$50,001 — $150,000     $1,531, plus 4.24% of the excess over $50,000

$150,001 and over $5,771, plus 4.54% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:                 The tax is:

$0 — $20,000                       2.59% of taxable income

$20,001 — $50,000      $518, plus 2.88% of the excess over $20,000

$50,001 — $100,000     $1,382, plus 3.36% of the excess over $50,000

$100,001 — $300,000    $3,062, plus 4.24% of the excess over $100,000

$300,001 and over $11,542, plus 4.54% of the excess over $300,000

6. Subject to subsections D and E of this section, for taxable years beginning from and after December 31, 2018:

(a) In the case of a single person or a married person filing separately:

If taxable income is:                 The tax is:

$0 — $26,500                       2.59% of taxable income

$26,501 — $53,000                        $686, plus 3.34% of the amount

over $26,500

$53,001 — $159,000                 $1,571, plus 4.17% of the

amount over $53,000

$159,001 and over                   $5,991, plus 4.50% of the amount

over $159,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is:                 The tax is:

$0 — $53,000                       2.59% of taxable income

$53,001 — $106,000                 $1,373, plus 3.34% of the amount                                        over $53,000

$106,001 — $318,000                $3,143, plus 4.17% of the amount

over $106,000

$318,001 and over $11,983, plus 4.50% of the amount over $318,000

B. For the taxable year beginning from and after December 31, 2014 through December 31, 2015, the department shall adjust the income dollar amounts for each rate bracket prescribed by subsection A, paragraph 5 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall be raised to the nearest whole dollar. The income dollar amounts for each rate bracket may not be revised below the amounts prescribed in the prior taxable year.

C. For each taxable year beginning from and after December 31, 2015 through December 31, 2018, the department shall adjust the income dollar amounts for each rate bracket prescribed by subsection A, paragraph 5 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall be raised to the nearest whole dollar. The income dollar amounts for each rate bracket may not be revised below the amounts prescribed in the prior taxable year.

D. For each taxable year beginning from and after December 31, 2019, the department shall adjust the income dollar amount for each rate bracket prescribed by subsection A, paragraph 6 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall be raised to the nearest whole dollar.  The income dollar amounts for each rate bracket may not be revised below the amounts prescribed in the prior taxable year.

E. For each taxable year beginning from and after December 31, 2020, for taxable income that is subject to the income tax surcharge imposed by section 43-1013, the combined tax rate of the income tax surcharge imposed by section 43-1013 and the highest tax rate imposed by subsection A, paragraph 6, 7, 8 or 9 of this section may not exceed four and one-half percent. If the combined tax rate exceeds four and one-half percent, the highest tax rate imposed by subsection A, paragraph 6, 7, 8 or 9 of this section shall be reduced so that the combined tax rate is four and one-half percent. The department may adopt rules pursuant to title 41, chapter 6 to carry out this subsection.
A.R.S. § 43-1178 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1178
43-1178 Credit for taxes with respect to coal consumed in generating electrical power
Status: in_force

43-1178. Credit for taxes with respect to coal consumed in generating electrical power

A. A credit is allowed against the taxes imposed by this title for a taxpayer that purchases coal consumed in generating electrical power in this state. The credit is equal to thirty per cent of the amount paid by the seller or purchaser as transaction privilege or use tax with respect to the coal sold to the taxpayer.

B. Co-owners of a business, including corporate partners in a partnership, may claim only the pro rata share of the credit allowed under this section based on the ownership interest. The total of the credits allowed all of the owners of the business may not exceed the amount that would have been allowed for a sole owner of the business.

C. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used as an offset against income taxes may be carried forward to the next five consecutive taxable years as a credit against subsequent years’ income tax liability.

D. The credit under this section is in lieu of any allowance for state tax purposes for a deduction for the expenses allowed by the internal revenue code.
A.R.S. § 43-403 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 403
43-403 Employment excluded from withholding
Status: in_force

43-403. Employment excluded from withholding

A. No amount shall be deducted or retained from:

1. Wages or salary paid to an employee of a common carrier when such employee is a nonresident of this state as defined in section 43-104 and regularly performs services both within and without this state.

2. Wages paid for domestic service in a private home.

3. Wages paid for casual labor not in the course of the employer's trade or business.

4. Wages paid to part-time or seasonal employees whose services to the employer consist solely of labor in connection with the planting, cultivating, harvesting or field packing of seasonal agricultural crops, except such employees whose principal duties are operating any mechanically-driven device in such operations.

5. Wages or salary paid to a nonresident of this state who is:

(a) An employee of an individual, fiduciary, partnership, corporation or limited liability company having property, payroll and sales in this state, or of a related entity having more than fifty per cent direct or indirect common ownership.

(b) Physically present in this state for less than sixty days in a calendar year for the purpose of performing a service that will benefit the employer or the related entity. For purposes of determining the number of days of service in this state, days spent in the following activities are not included:

(i) In transit.

(ii) Engaging in personal activities.

(iii) Participating in training or professional development activities or attending meetings that are not directly connected to the Arizona operations of the employer or the related entity.

6. Wages or salary paid to a nonresident who is in this state on a temporary basis for the purpose of performing disaster recovery from a declared disaster during a disaster period as defined in section 42-1130.

B. In addition to the exemptions from the withholding provisions contained in subsection A of this section, because of the temporary nature of such employment, no amount shall be deducted or retained from wages paid to a nonresident of this state engaged in any phase of motion picture production when, prior to the time of payment of such wages, an application is made by the employer to the department, on forms prescribed by the department, for an exemption from the withholding provisions of this section and the department determines that the nonresident would be allowed a credit under section 43-1096 against all of the taxes upon such wages imposed by this chapter.

C. Subsection A, paragraph 5 of this section does not apply to a nonresident employee who is in this state solely for athletic or entertainment purposes.

D. Notwithstanding subsection A, paragraphs 4 and 5 of this section:

1. A nonresident employee under subsection A, paragraph 5 of this section or a part-time or seasonal employee under subsection A, paragraph 4 of this section may elect to have withholding deducted in the manner prescribed by section 43-401, subsection E and the employer shall withhold tax pursuant to that election.

2. The employer may elect to withhold tax from the nonresident employee before the sixty-day limitation has elapsed.
A.R.S. § 43-1331 — Arizona Code / Title 43 / Chapter 13 / Article 3 / Section 1331
43-1331 Additions to Arizona gross income; estates and trusts
Status: in_force

43-1331. Additions to Arizona gross income; estates and trusts

In computing Arizona taxable income of an estate or trust, the estate or trust's share of the fiduciary adjustment shall be added to Arizona gross income to the extent that the amount determined pursuant to section 43-1333 increases the estate or trust's Arizona gross income.
A.R.S. § 43-723 — Arizona Code / Title 43 / Chapter 7 / Article 2 / Section 723
43-723 Claim for tax in case of bankruptcy or receivership
Status: in_force

43-723. Claim for tax in case of bankruptcy or receivership

Claims for the deficiency and such interest, additional amounts and additions to the tax may be presented, for adjudication in accordance with law, to the court before which the bankruptcy or receivership proceeding is pending despite the pendency of proceedings for reassessment of the deficiency pursuant to a protest or an appeal to the department or an appeal to the superior court. No appeal from the action of the department to a superior court may be filed after the adjudication of bankruptcy or the appointment of a receiver.
A.R.S. § 43-304 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 304
43-304 Fiduciary returns
Status: in_force

43-304. Fiduciary returns

A. Every fiduciary, except a receiver appointed by authority of law in possession of part only of the property of an individual, shall make a return for any of the following taxpayers for whom the fiduciary acts:

1. Every individual who is required to file an individual income tax return under section 43-301.

2. Every estate or trust that has Arizona taxable income for the taxable year.

3. Every estate or trust of which the gross income for the taxable year is $5,000 or over, regardless of the amount of the Arizona taxable income.

4. Every decedent, for the year in which death occurred and for prior years, if returns for such years should have been filed but have not been filed by the decedent, under such rules as the department may prescribe.

B. Any fiduciary required to make a return for an individual is subject to the provisions of this title that apply to individuals.
A.R.S. § 43-224 — Arizona Code / Title 43 / Chapter 2 / Article 2 / Section 224
43-224 Individual and corporate income tax credits; annual report; termination of unused credits
Status: repealed

43-224. Individual and corporate income tax credits; annual report; termination of unused credits

A. On or before September 30 of each year, the department shall report to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting on the amount of individual income tax credits and corporate income tax credits that were claimed in the previous fiscal year.

B. Except as provided by subsection C of this section, if, in any three consecutive reports under subsection A of this section, an individual or corporate income tax credit was not claimed by or allowed to any individual or corporate taxpayer, the director of the department of revenue shall:

1. Terminate the recognition and servicing of that credit for taxable years beginning from and after December 31 of the year in which the third report is issued.

2. Issue a public announcement, including on the department's website, of the termination of the credit under authority of this section.

3. Notify the governor's office of strategic planning and budgeting, the president of the senate, the speaker of the house of representatives, the joint legislative budget committee and the legislative council.

4. Include the repeal of all statutes relating to the terminated credit in technical tax correction legislation for enactment in the next regular session of the legislature. If the credit included for repeal in the technical tax correction legislation has unused credits carried forward from prior years, the technical tax correction legislation shall include a saving clause to allow for the continued use of the carried forward amounts for the remainder of the carryforward period specified in the repealed credit. If the legislature fails to enact this legislation, the director shall rescind the termination of the credit.

C. The director may not terminate under subsection B of this section the recognition and servicing of any income tax credit that is subject by law to preapproval by the Arizona commerce authority unless over any period of three consecutive calendar years both of the following conditions occur with respect to the credit:

1. The department has not received notice of preapproval of any applicant or project for the credit from the Arizona commerce authority.

2. In the report issued under subsection A of this section, the credit was not claimed by or allowed to any taxpayer.

D. For the purposes of this section, unused credits carried forward from prior years are not considered claimed or allowed in the year the credit carried forward is used.
A.R.S. § 43-1042 — Arizona Code / Title 43 / Chapter 10 / Article 4 / Section 1042
43-1042 Itemized deductions
Status: in_force

43-1042. Itemized deductions

A. Except as provided by subsections B and C of this section, at the election of the taxpayer, and in lieu of the standard deduction allowed by section 43-1041, in computing taxable income the taxpayer may take the amount of itemized deductions allowable for the taxable year pursuant to subtitle A, chapter 1, subchapter B, parts VI and VII, but subject to the limitations prescribed by sections 67, 68 and 274 of the internal revenue code.

B. In lieu of the amount of the federal itemized deduction for expenses paid for medical care allowed under section 213 of the internal revenue code, the taxpayer may deduct the full amount of such expenses.

C. A taxpayer shall not claim both a deduction provided by this section and a credit allowed by this title with respect to the same charitable contributions. This subsection applies to any contribution for which a credit is allowed by this title even if the contribution is treated as a payment of state income tax.

D. The taxpayer may add any interest expense paid by the taxpayer for the taxable year that is equal to the amount of federal credit for interest on certain home mortgages allowed by section 25 of the internal revenue code.
A.R.S. § 43-414 — Arizona Code / Title 43 / Chapter 4 / Article 2 / Section 414
43-414 Liability for failure to withhold
Status: in_force

43-414. Liability for failure to withhold

The employer shall be liable to the department for the payment of the tax required to be deducted and withheld under this chapter, and the employee shall not be liable for the amount of any such payment nor shall the employer be liable to any person or any employee for the amount of any such payment. For the purpose of making penalty sections of this title applicable, any amount deducted or required to be deducted and remitted to the department under this chapter shall be considered the tax of the employer and with respect to such amounts he shall be considered as a taxpayer.
A.R.S. § 43-1137 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1137
43-1137 Interest and dividends
Status: in_force

43-1137. Interest and dividends

Interest and dividends are allocable to this state if the taxpayer's commercial domicile is in this state unless the interest or dividend constitutes business income.
A.R.S. § 43-207 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 207
43-207 Illegal income; duty of law enforcement or prosecuting agency; distribution of revenue; definitions
Status: in_force

43-207. Illegal income; duty of law enforcement or prosecuting agency; distribution of revenue; definitions

A. Whenever state or local law enforcement agency personnel in the course of an investigation obtain knowledge or a good faith belief that a person has received illegal income with an estimated value in excess of one thousand dollars, the person in charge of the investigation shall provide identifying information to the department. The law enforcement agency shall cooperate fully with the department in providing the department with information regarding the illegal income. Such cooperation and identifying information shall include but is not limited to the provision of names, addresses, the identity and location of income sources, and the identity and location of assets.

B. Whenever any person prosecuting a person on behalf of the state obtains information in the course of the prosecution which information shows that the person being prosecuted has received or may have received illegal income in excess of one thousand dollars and it appears that the information has not been previously reported to the department, the prosecutor shall immediately provide identifying information to the department. The prosecutor shall cooperate fully with the department in providing information regarding the person and amount of illegal income received.

C. The monies collected in taxes as a result of information provided to the department under this section shall be deposited in the state general fund.

D. For the purposes of this section:

1. "Illegal income" means any economic benefit of money or property of any kind derived from any unlawful activity, including but not limited to theft, robbery, forgery, bribery, prostitution, gambling, fraud, or unlawful sales.

2. "State or local law enforcement agency" means the department of public safety, county sheriff departments, and municipal police departments.
A.R.S. § 43-944 — Arizona Code / Title 43 / Chapter 9 / Article 4 / Section 944
43-944 Disclosure by department of basis of allocation
Status: in_force

43-944. Disclosure by department of basis of allocation

If the department reallocates income or deductions upon its examination of any return, it shall, upon the written request of the taxpayer, disclose to him the basis upon which its reallocation has been made.
A.R.S. § 43-617 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 617
43-617 Contribution for solutions teams assigned to schools
Status: in_force

43-617. Contribution for solutions teams assigned to schools

A. The department shall provide a space on the individual income tax return form in which the taxpayer may designate all or any amount of the taxpayer's refund as a voluntary contribution for funding solutions teams assigned to schools as provided in section 15-973.01.

B. After subtracting any setoff for debts pursuant to section 42-1122, the department shall subtract the designated amount from the refund due the taxpayer and transfer it to the state board of education, which shall credit the amount of the contribution to the assistance for education fund established pursuant to section 15-973.01. The department shall determine the initial administrative cost of this section and report the amount to the state board of education, which shall transfer that amount from the assistance for education fund to the state general fund.
A.R.S. § 43-1504 — Arizona Code / Title 43 / Chapter 15 / Article 1 / Section 1504
43-1504 Special provisions; corporate donations for low-income scholarships; rules
Status: in_force

43-1504. Special provisions; corporate donations for low-income scholarships; rules

A. A school tuition organization that receives contributions from a corporation for the purposes of section 20-224.06 or 43-1183 must use at least ninety percent of those contributions to provide educational scholarships or tuition grants only to children whose family income does not exceed one hundred eighty-five percent of the income limit required to qualify a child for reduced-price lunches under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) and to whom any of the following applies:

1. Attended a governmental primary or secondary school as a full-time student as defined in section 15-901 or attended a preschool program that offers services to students with disabilities at a governmental school for at least ninety days of the prior fiscal year or one full semester and transferred from a governmental school to a qualified school.

2. Enroll in a qualified school in a kindergarten program or a preschool program that offers services to students with disabilities.

3. Are the dependent of a member of the armed forces of the United States who is stationed in this state pursuant to military orders.

4. Are homeschooled before enrolling in a qualified school.

5. Moved to this state from out of state before enrolling in a qualified school.

6. Participated in an Arizona empowerment scholarship account and did not renew the account or accept the scholarship in order to accept a scholarship or tuition grant under this section.

7. Subject to subsection G of this section, are placed in foster care pursuant to title 8, chapter 4 at any time before the student graduates from high school or obtains a general equivalency diploma and who meet all of the following criteria:

(a) Are unable to attend a governmental primary or secondary school as a full-time student as defined in section 15-901. For the purposes of this subdivision, "unable to attend" means the student has been expelled or asked not to return due to the student's behavior or the school is not able to provide necessary services to the student.

(b) Have not attended a governmental primary or secondary school as a full-time student as defined in section 15-901 for at least ninety days of the prior fiscal year or one full semester before enrolling in a qualified school.

(c) The qualified school in which the students are enrolling is only considered because a governmental primary or secondary school cannot meet the students' unique needs, such as severe medical or behavioral needs that require specialized programs.

(d) Are unable to receive other scholarships or tuition grants under this chapter or chapter 15 of this title in an amount that is equal to the cost of tuition to attend the qualified school.

8. Received an educational scholarship or tuition grant under paragraph 1, 2, 3, 4, 5, 6 or 7 of this subsection or chapter 16, article 1 of this title if the children continue to attend a qualified school in a subsequent year.

B. A child is eligible to receive an educational scholarship or tuition grant under subsection A of this section if the child meets the criteria to receive a reduced-price lunch but does not actually claim that benefit.

C. In 2021, a school tuition organization shall not issue an educational scholarship or a tuition grant for the purposes of section 20-224.06 or 43-1183 in an amount that exceeds $5,600 for students who are in a kindergarten program, a preschool program that offers services to students with disabilities or grades one through eight or $7,500 for students who are in grades nine through twelve. In each year after 2021, the limit amount for a scholarship or a grant under this subsection shall be increased by $200.

D. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full-time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants.

E. Students who receive an educational scholarship or tuition grant under this section shall be allowed to attend any qualified school of their parents' choice.

F. The department of revenue, with the cooperation of the department of insurance and financial institutions, shall adopt rules and publish and prescribe forms and procedures necessary to administer this section.

G. If a court of competent jurisdiction issues a final judgment that the aggregate tax credit limit prescribed in section 43-1183, subsection C, paragraph 1 is unenforceable and that judgment is no longer subject to further appeal or review, a school tuition organization shall not issue an educational scholarship or a tuition grant under subsection A, paragraph 7 or 8 of this section for children who received an educational scholarship or a tuition grant under subsection A, paragraph 7 of this section.
A.R.S. § 43-1133 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1133
43-1133 Taxability in other state
Status: in_force

43-1133. Taxability in other state

For purposes of allocation and apportionment of income under this article, a taxpayer is taxable in another state if either of the following applies:

1. In that state he is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business or a corporate stock tax.

2. That state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not.
A.R.S. § 43-1183 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1183
43-1183 Credit for contributions to school tuition organization
Status: in_force

43-1183. Credit for contributions to school tuition organization

A. Beginning from and after June 30, 2006, a credit is allowed against the taxes imposed by this title for the amount of voluntary cash contributions made by the taxpayer during the taxable year to a school tuition organization that is certified pursuant to chapter 15 of this title at the time of donation.

B. The amount of the credit is the total amount of the taxpayer's contributions for the taxable year under subsection A of this section and is preapproved by the department of revenue pursuant to subsection D of this section.

C. The department of revenue:

1. Shall not allow tax credits under this section and section 20-224.06 that exceed in the aggregate a combined total of $135,000,000 in fiscal year 2024-2025 and each fiscal year thereafter.

2. Shall preapprove tax credits under this section and section 20-224.06 subject to subsection D of this section.

3. Shall allow the tax credits under this section and section 20-224.06 on a first-come, first-served basis.

D. For the purposes of subsection C, paragraph 2 of this section, before making a contribution to a school tuition organization, the taxpayer under this title or title 20 must notify the school tuition organization of the total amount of contributions that the taxpayer intends to make to the school tuition organization. Before accepting the contribution, the school tuition organization shall request preapproval from the department of revenue for the taxpayer's intended contribution amount.  The department of revenue shall preapprove or deny the requested amount within twenty days after receiving the request from the school tuition organization. If the department of revenue preapproves the request, the school tuition organization shall immediately notify the taxpayer, and the department of insurance and financial institutions in the case of a credit under section 20-224.06, that the requested amount was preapproved by the department of revenue.  In order to receive a tax credit under this subsection, the taxpayer shall make the contribution to the school tuition organization within twenty days after receiving notice from the school tuition organization that the requested amount was preapproved. If the school tuition organization does not receive the preapproved contribution from the taxpayer within the required twenty days, the school tuition organization shall immediately notify the department of revenue, and the department of insurance and financial institutions in the case of a credit under section 20-224.06, and the department of revenue shall no longer include this preapproved contribution amount when calculating the limit prescribed in subsection C, paragraph 1 of this section.

E. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.

F. Co-owners of a business, including corporate partners in a partnership and stockholders of an S corporation as defined in section 1361 of the internal revenue code, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest.  The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

G. The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.

H. A taxpayer shall not claim a credit under this section and also under section 43-1184 with respect to the same contribution.

I. The tax credit is not allowed if the taxpayer designates the taxpayer's contribution to the school tuition organization for the direct benefit of any specific student.

J. The department of revenue, with the cooperation of the department of insurance and financial institutions, shall adopt rules and publish and prescribe forms and procedures necessary to administer this section.
A.R.S. § 43-308 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 308
43-308 Gross income defined for purposes of determination to file
Status: in_force

43-308. Gross income defined for purposes of determination to file

For purposes of this article, the term "gross income" shall be gross income as defined in the internal revenue code.
A.R.S. § 43-612 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 612
43-612 Contribution of portion of income tax refund to political parties trust fund
Status: in_force

43-612. Contribution of portion of income tax refund to political parties trust fund

A. The department shall provide a space on the individual income tax return form in which the taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the political parties trust fund established under section 16-807. The form shall allow the taxpayer to choose among contribution amounts of ten dollars, five dollars or two dollars and shall require the taxpayer to designate the contribution to a political party currently qualified for representation on the state primary and general election ballot pursuant to title 16, chapter 5, article 1. If the contribution is not designated to a qualified political party, the monies shall not be subtracted from the refund and the refund shall be handled as if no voluntary contribution was made.

B. After subtracting any setoff for debts pursuant to section 42-1122 the department shall subtract the designated amount from the refund due the taxpayer and deposit it, pursuant to sections 35-146 and 35-147, in the fund.

C. The taxpayer may also donate any amount to the political parties trust fund, in lieu of or in addition to the designated portion of the refund, by an appropriate indication on the return and by including such amount with the return. If no political party is designated with the donation, the donation shall be returned.
A.R.S. § 43-1099 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1099
43-1099 Applicability of article
Status: in_force

43-1099. Applicability of article

This article applies only to residents of states which do not have a current reciprocal income tax exemption agreement with this state pursuant to section 42-1005, subsection B.
A.R.S. § 43-1141 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1141
43-1141 Valuation of property
Status: in_force

43-1141. Valuation of property

Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.
A.R.S. § 43-1332 — Arizona Code / Title 43 / Chapter 13 / Article 3 / Section 1332
43-1332 Subtractions from Arizona gross income; estates and trusts
Status: in_force

43-1332. Subtractions from Arizona gross income; estates and trusts

In computing Arizona taxable income of an estate or trust, the following shall be subtracted from Arizona gross income:

1. The estate or trust's share of the fiduciary adjustment to the extent that the amount determined pursuant to section 43-1333 decreases the estate or trust's Arizona gross income.

2. In the case of an estate, the amount of federal estate taxes paid in the current taxable year.
A.R.S. § 43-562 — Arizona Code / Title 43 / Chapter 5 / Article 5 / Section 562
43-562 Husband and wife, liability for tax
Status: in_force

43-562. Husband and wife, liability for tax

The spouse who controls the disposition of or who receives or spends community income as well as the spouse who is taxable on such income is liable for the payment of the taxes imposed by this title on such income. If a joint return is filed, the liability for the tax on the aggregate income is joint and several.
A.R.S. § 43-243 — Arizona Code / Title 43 / Chapter 2 / Article 3 / Section 243
43-243 State general fund revenue notification; tax rate adjustment
Status: in_force

43-243. State general fund revenue notification; tax rate adjustment

A. On or before September 30, 2022, the director of the joint legislative budget committee and the director of the governor's office of strategic planning and budgeting shall jointly notify the department whether the fiscal year 2021-2022 state general fund revenue, excluding the beginning balance, was $12,782,800,000 or more.

B. On or before September 30, 2023 and on or before September 30 of each year until the notice is provided as prescribed in subsection A of this section or paragraph 1 of this subsection, and paragraph 2 of this subsection, the director of the joint legislative budget committee and the director of the governor's office of strategic planning and budgeting shall jointly notify the department whether the previous fiscal year state general fund revenue, excluding the beginning balance, was either of the following amounts:

1. More than $12,782,800,000 but less than $12,976,300,000.  The notice required pursuant to this paragraph is not required if the notice required pursuant to subsection A of this section was provided on or before September 30, 2022.

2. $12,976,300,000 or more.

C. On receipt of the notice required pursuant to subsection A or subsection B, paragraph 1 of this section, the department shall use the tax rates provided in section 43-1011, subsection A, paragraph 8 for taxable years beginning from and after December 31 of the year in which the notice required pursuant to subsection A or subsection B, paragraph 1 of this section is received.  The tax rate prescribed in section 43-1011, subsection A, paragraph 8 applies until the department receives the notice required pursuant to subsection B, paragraph 2 of this section.

D. On receipt of the notice required pursuant to subsection B, paragraph 2 of this section, the department shall use the tax rates provided in section 43-1011, subsection A, paragraph 9 for taxable years beginning from and after December 31 of the year in which the notice required pursuant to subsection B, paragraph 2 of this section is received.

E. The director of the joint legislative budget committee and the director of the governor's office of strategic planning and budgeting shall notify the department as required pursuant to subsection B, paragraphs 1 and 2 of this section only on the first occurrence that each state general fund revenue threshold is met.
A.R.S. § 43-1364 — Arizona Code / Title 43 / Chapter 13 / Article 5 / Section 1364
43-1364 Liability of fiduciary for nonpayment of estate or trust taxes
Status: in_force

43-1364. Liability of fiduciary for nonpayment of estate or trust taxes

Every fiduciary who knowingly pays in whole or in part any claim, other than claims for taxes, expenses of administration, funeral expenses, expenses of last illness and family allowance, against the person, estate or trust for whom or for which the fiduciary acts or who makes any distribution of the assets of the person, estate, other than estates allowed by law to be set aside to a surviving spouse or minor children, or trust, before the fiduciary satisfies and pays taxes, interest and penalties, except penalties due from a decedent, which are imposed by this title on the person, estate or trust for whom or for which the fiduciary acts and which are known by such fiduciary to constitute a claim against such person, estate or trust or which are known by such fiduciary to constitute a lien or charge on or against the assets of such person, estate or trust, is personally liable to the state for the taxes, interest and penalties to the extent of such payments and distributions.
A.R.S. § 43-1129 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1129
43-1129 Amortization of expenses incurred in acquisition of pollution control devices; depreciation
Status: in_force

43-1129. Amortization of expenses incurred in acquisition of pollution control devices; depreciation

A. Any taxpayer may elect to amortize the adjusted basis of any device, machinery or equipment for the collection and control at the source of atmospheric and water pollutants and contaminants based upon a period of sixty months. In computing Arizona taxable income, such amortization shall be allowed as a subtraction ratably over the period allowed under this subsection beginning with the month in which such device, machinery or equipment is completed or acquired and is placed in service by the taxpayer. This election shall be indicated by the taxpayer in an appropriate statement in the taxpayer's income tax return for the taxable year of the acquisition or completion and placement in service of such devices, machinery or equipment. An election to discontinue amortization with respect to the remainder of the amortization period is permitted and shall be indicated by an appropriate statement in the taxpayer's income tax return for the taxable year of discontinuance.

B. If the taxpayer does not elect to amortize pursuant to subsection A, there shall be allowed a deduction for normal exhaustion, wear and tear of property. The amount of such deduction shall be computed pursuant to the provisions of section 167 of the internal revenue code.

C. In determining the adjusted basis for the purposes of subsection A, such device, machinery or equipment upon certification by the department of environmental quality as a device, machinery or equipment for the collection and control at the source of atmospheric and water pollutants and contaminants shall include only an amount that is properly attributable to the construction, reconstruction, remodeling, installation or acquisition of such device, machinery or equipment as certified by the department of environmental quality.
A.R.S. § 43-1170 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1170
43-1170 Credit for pollution control equipment
Status: in_force

43-1170. Credit for pollution control equipment

A. A credit is allowed against the taxes imposed by this title for expenses that the taxpayer incurred during the taxable year to purchase real or personal property that is used in the taxpayer's trade or business in this state to control or prevent pollution.  The amount of the credit is equal to ten percent of the purchase price.

B. Property that qualifies for the credit under this section includes that portion of a structure, building, installation, excavation, machine, equipment or device and any attachment or addition to or reconstruction, replacement or improvement of that property that is directly used, constructed or installed in this state for the purpose of meeting or exceeding rules or regulations adopted by the United States environmental protection agency, the department of environmental quality or a political subdivision of this state to prevent, monitor, control or reduce air, water or land pollution that results from the taxpayer's direct operating activities in conducting a trade or business in this state.

C. The credit allowed pursuant to this section does not apply to:

1. The purchase of any personal property that is attached to a motor vehicle.

2. Any property that has a substantial use for a purpose other than the purposes described in subsection B.

3. Any portion of pollution control property that is included as a standard and integral part of another property.

D. Amounts that qualify for a credit under this section must be includible in the taxpayer's adjusted basis for the property. The adjusted basis of any property with respect to which the taxpayer has claimed a credit shall be reduced by the amount of credit claimed with respect to that asset. This credit does not affect the deductibility for depreciation or amortization of the remaining adjusted basis of the asset.

E. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest. Partners in a partnership that is not a corporation may not claim a share of the credit. The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.

F. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five taxable years' income tax liability.

G. The maximum credit that a taxpayer may claim under this section is $500,000 in a taxable year.
A.R.S. § 43-105 — Arizona Code / Title 43 / Chapter 1 / Article 1 / Section 105
43-105 Internal revenue code; definition; application
Status: in_force

43-105. Internal revenue code; definition; application

A. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2024, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2025, including those provisions that became effective during 2024 with the specific adoption of all retroactive effective dates, but excluding any changes to the code enacted after January 1, 2025.

B. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2023 through December 31, 2024, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2024, including those provisions that became effective during 2023 with the specific adoption of all retroactive effective dates, and including those provisions that are retroactively effective during taxable years beginning from and after December 31, 2023 through December 31, 2024.

C. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2022 through December 31, 2023, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2023, including those provisions that became effective during 2022 with the specific adoption of all retroactive effective dates, and including those provisions that are retroactively effective during taxable years beginning from and after December 31, 2022 through December 31, 2023.

D. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2021 through December 31, 2022, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2022, including those provisions that became effective during 2021 with the specific adoption of all retroactive effective dates, and including those provisions of the chips and science act of 2022 (P.L. 117-167), the inflation reduction act of 2022 (P.L. 117-169) and the consolidated appropriations act, 2023 (P.L. 117-328) that are retroactively effective during taxable years beginning from and after December 31, 2021 through December 31, 2022.

E. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2020 through December 31, 2021, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on March 11, 2021, including those provisions that became effective during 2020 with the specific adoption of all retroactive effective dates and including those provisions of the PPP extension act of 2021 (P.L. 117-6) and the infrastructure investment and jobs act (P.L. 117-58) that are retroactively effective during taxable years beginning from and after December 31, 2020 through December 31, 2021.

F. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2019 through December 31, 2020, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2020, including those provisions that became effective during 2019 with the specific adoption of all retroactive effective dates, and including those provisions of the families first coronavirus response act (P.L. 116-127), the coronavirus aid, relief, and economic security act (P.L. 116-136), the paycheck protection program flexibility act of 2020 (P.L. 116-142), the consolidated appropriations act, 2021 (P.L. 116-260) and the American rescue plan act of 2021 (P.L. 117-2) that are retroactively effective during taxable years beginning from and after December 31, 2019 through December 31, 2020.

G. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2018 through December 31, 2019, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2019, including those provisions that became effective during 2018 with the specific adoption of all retroactive effective dates, and including those provisions of the taxpayer first act (P.L. 116-25), the further consolidated appropriations act, 2020 (P.L. 116-94), the coronavirus aid, relief, and economic security act (P.L. 116-136) and the consolidated appropriations act, 2021 (P.L. 116-260) that are retroactively effective during taxable years beginning from and after December 31, 2018 through December 31, 2019.

H. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2017 through December 31, 2018, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2018, including those provisions that became effective during 2017 with the specific adoption of all retroactive effective dates, and including those provisions of the bipartisan budget act of 2018 (P.L. 115-123), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94), the coronavirus aid, relief, and economic security act (P.L. 116-136) and the consolidated appropriations act, 2021 (P.L. 116-260) that are retroactively effective during taxable years beginning from and after December 31, 2017 through December 31, 2018.

I. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2016 through December 31, 2017, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2017, including those provisions that became effective during 2016 with the specific adoption of all federal retroactive effective dates, and including those provisions of the disaster tax relief and airport and airway extension act of 2017 (P.L. 115-63), the tax cuts and jobs act (P.L. 115-97), the bipartisan budget act of 2018 (P.L. 115-123), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2016 through December 31, 2017.

J. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2015 through December 31, 2016, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2016, including those provisions that became effective during 2015 with the specific adoption of all federal retroactive effective dates, and including those provisions of the United States appreciation for olympians and paralympians act of 2016 (P.L. 114-239), the tax cuts and jobs act (P.L. 115-97), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2015 through December 31, 2016.

K. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2014 through December 31, 2015, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2015, including those provisions that became effective during 2014 with the specific adoption of all federal retroactive effective dates, and including those provisions of the slain officer family support act of 2015 (P.L. 114-7), the don't tax our fallen public safety heroes act (P.L. 114-14), the surface transportation and veterans health care choice improvement act of 2015 (P.L. 114-41), the consolidated appropriations act, 2016 (P.L. 114-113), the consolidated appropriations act, 2018 (P.L. 115-141) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2014 through December 31, 2015.
A.R.S. § 43-1401 — Arizona Code / Title 43 / Chapter 14 / Article 1 / Section 1401
43-1401 Definitions
Status: in_force

43-1401. Definitions

In this chapter, unless the context otherwise requires:

1. "Arizona gross income" of a partnership means its taxable income for the year, computed according to subtitle A, chapter 1, subchapter K of the internal revenue code, exclusive of items requiring separate computation under section 43-1412, paragraphs 1 through 16. For purposes of this title the provisions relating to interest on investment indebtedness contained in section 163(d) of the internal revenue code shall not apply.

2. "Arizona taxable income" of a partnership means its Arizona gross income adjusted by the modifications specified in sections 43-1021 and 43-1022 and section 43-1414, subsection A.
A.R.S. § 43-324 — Arizona Code / Title 43 / Chapter 3 / Article 2 / Section 324
43-324 Rounding to the nearest dollar
Status: in_force

43-324. Rounding to the nearest dollar

The department may round fractional dollars to the nearest whole dollar and may require the taxpayer to do so in preparing any return under this title.
A.R.S. § 43-1721 — Arizona Code / Title 43 / Chapter 17 / Article 3 / Section 1721
43-1721 Additions and subtractions to Arizona small business gross income
Status: in_force

43-1721. Additions and subtractions to Arizona small business gross income

In computing Arizona small business adjusted gross income, the additions and subtractions provided in sections 43-1021 and 43-1022 shall be made but only to the extent the additions and subtractions directly relate to Arizona small business gross income.  The subtraction provided in section 43-1022, paragraph 28 may not be included as a subtraction under this chapter.
A.R.S. § 43-932 — Arizona Code / Title 43 / Chapter 9 / Article 3 / Section 932
43-932 Return for a taxpayer not in existence throughout a complete taxable year
Status: in_force

43-932. Return for a taxpayer not in existence throughout a complete taxable year

In the case of a taxpayer not in existence during the whole of an annual accounting period ending on the last day of a month or if the taxpayer has no annual accounting period or does not keep books during the whole of a calendar year, the return shall be made for the fractional part of the year during which the taxpayer was in existence.
A.R.S. § 43-1231 — Arizona Code / Title 43 / Chapter 12 / Article 3 / Section 1231
43-1231 Taxation of unrelated business income
Status: in_force

43-1231. Taxation of unrelated business income

Any organization, trust or church or a convention or association of churches that is exempt, except as provided in this section, from taxation under this title by reason of section 43-1201 is subject to the tax imposed under section 43-1111 on its unrelated business taxable income as defined in section 512 of the internal revenue code.
A.R.S. § 43-1091 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1091
43-1091 Gross income of a nonresident
Status: in_force

43-1091. Gross income of a nonresident

A. In the case of nonresidents, Arizona gross income includes only that portion of federal adjusted gross income which represents income from sources within this state.

B. Income of a nonresident from the wages or salary received by the nonresident employee who is in this state on a temporary basis for the purpose of performing disaster recovery from a declared disaster during a disaster period as defined in section 42-1130 is not considered income from sources within this state.
A.R.S. § 43-1506 — Arizona Code / Title 43 / Chapter 15 / Article 1 / Section 1506
43-1506 Annual report; posting
Status: in_force

43-1506. Annual report; posting

A. On or before September 30 of each year, each school tuition organization shall report electronically to the department, in a form prescribed by the department, the following information, separately compiled and identified for the purposes of sections 20-224.06, 20-224.07, 43-1183 and 43-1184:

1. The name, address and contact person of the school tuition organization.

2. The total number of contributions received during the previous fiscal year.

3. The total dollar amount of contributions received during the previous fiscal year.

4. The total number of children awarded educational scholarships or tuition grants during the previous fiscal year.

5. The total dollar amount of:

(a) Educational scholarships and tuition grants distributed during the previous fiscal year.

(b) Monies being held for identified students' scholarships and tuition grants in future years.

6. The cost of audits pursuant to section 43-1507 paid during the fiscal year.

7. The percentage and total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year to:

(a) Students whose family income meets the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced-price lunches.

(b) Students whose family income exceeds the threshold prescribed by subdivision (a) of this paragraph but does not exceed one hundred eighty-five percent of the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced-price lunches.

8. For each school to which educational scholarships or tuition grants were awarded:

(a) The name and address of the school.

(b) The number of educational scholarships and tuition grants awarded during the previous fiscal year.

(c) The total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year.

9. The names, job titles and annual salaries of the three employees who receive the highest annual salaries from the school tuition organization.

B. The department shall post on its website a report of the information it receives pursuant to subsection A of this section on or before March 31 of the calendar year following the year in which the information is received.
A.R.S. § 43-1138 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1138
43-1138 Patent and copyright royalties
Status: in_force

43-1138. Patent and copyright royalties

A. Patent and copyright royalties are allocable to this state either:

1. If and to the extent that the patent or copyright is utilized by the payer in this state.

2. If and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in this state.

B. A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing or other processing in the state or to the extent that a patented product is produced in the state.  If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer's commercial domicile is located.

C. A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer's commercial domicile is located.
A.R.S. § 43-1201 — Arizona Code / Title 43 / Chapter 12 / Article 1 / Section 1201
43-1201 Organizations exempt from tax
Status: in_force

43-1201. Organizations exempt from tax

(Caution:  1998 Prop. 105 applies)

A. Except as otherwise provided in this chapter, the following organizations are exempt from the taxes imposed under this title:

1. Organizations that are exempt from federal income tax under section 501 of the internal revenue code.

2. Insurance companies that pay to this state a tax on premium income derived from sources within this state.

B. Nonprofit medical marijuana dispensaries under title 36, chapter 28.1, are exempt from the taxes imposed under this title.
A.R.S. § 43-1041 — Arizona Code / Title 43 / Chapter 10 / Article 4 / Section 1041
43-1041 Optional standard deduction
Status: in_force

43-1041. Optional standard deduction

A. A taxpayer may elect to take a standard deduction as follows:

1. In the case of a single person or a married person filing separately, the standard deduction is $12,200, subject to subsection H of this section.

2. In the case of a single person who is a head of a household, the standard deduction is $18,350, subject to subsection H of this section.

3. In the case of a married couple filing a joint return, the standard deduction is $24,400, subject to subsection H of this section.

B. The standard deduction provided for in subsection A of this section is in lieu of all itemized deductions allowed by section 43-1042, which are to be subtracted from Arizona adjusted gross income in computing taxable income.

C. The standard deduction is allowed if the taxpayer so elects. The election is made by the taxpayer claiming on the tax return the amount provided for in this section in lieu of the itemized deductions allowed under section 43-1042. Electing to file a short form return or a simplified return that does not allow itemized deductions to be claimed is considered to be an election to claim the standard deduction.

D. In the case of a husband and wife, the standard deduction provided for in subsection A of this section is not allowed to either if the taxable income of one of the spouses is determined without regard to the standard deduction.

E. The standard deduction provided for by subsection A of this section is not allowed in the case of a taxable year of less than twelve months on account of a change in the accounting period.

F. Except as provided in subsection G of this section, a change of an election to take, or not to take, the standard deduction for any taxable year may be made after the filing of the return for that year.

G. A taxpayer is not allowed to change an election to take, or not to take, the standard deduction if:

1. The spouse of the taxpayer filed a separate return for any taxable year corresponding, for the purposes of subsection D of this section, to the taxable year of the taxpayer unless both of the following apply:

(a) The spouse makes a change of election with respect to the standard deduction for the taxable year covered in the separate return consistent with the change of election sought by the taxpayer.

(b) The taxpayer and spouse consent in writing to the assessment, within such a period as may be agreed on with the department, of any deficiency, to the extent attributable to the change of election, even though at the time of filing the consent the assessment of the deficiency would otherwise be prevented by the operation of any law or rule of law.

2. The tax liability of the taxpayer or the taxpayer's spouse for the taxable year has been compromised.

H. For each taxable year beginning from and after December 31, 2019, the department shall adjust the dollar amounts prescribed by subsection A, paragraphs 1, 2 and 3 of this section for inflation in the same manner in which the federal basic standard deduction is adjusted for inflation pursuant to section 63 of the internal revenue code.

I. For taxable years beginning from and after December 31, 2018, the standard deduction allowed under subsection A of this section shall be increased by the amount equal to twenty-five percent of the total amount of a taxpayer's charitable deductions that would have been allowed if the taxpayer elected to claim itemized deductions under section 43-1042 rather than elect the standard deduction. For taxable years beginning from and after December 31, 2021, the department shall adjust the percentage prescribed in this subsection according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics, except that the adjusted percentage may not exceed one hundred percent. The revised percentage shall be raised to the nearest whole percent and may not be revised below the amounts prescribed in the prior taxable year.
A.R.S. § 43-931 — Arizona Code / Title 43 / Chapter 9 / Article 3 / Section 931
43-931 Change of accounting period; computation of income; due date of return
Status: in_force

43-931. Change of accounting period; computation of income; due date of return

If a separate return is made under section 443 of the internal revenue code on account of a change in the accounting period, and in all other cases in which a separate return is required or allowed by treasury regulations to be made for a fractional part of a year, the income shall be computed on the basis of the period for which the separate return is made. Except for partnership and S corporation returns, the due date of the separate return for the period is the fifteenth day of the fourth month following the close of that period unless the short period return is due to a change in ownership of a corporation, in which case the due date shall be determined pursuant to treasury regulations. For a partnership or S corporation, the due date of the separate return for the period is the fifteenth day of the third month following the close of that period.
A.R.S. § 43-1121 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1121
43-1121 Additions to Arizona gross income; corporations
Status: in_force

43-1121. Additions to Arizona gross income; corporations

In computing Arizona taxable income for a corporation, the following amounts shall be added to Arizona gross income:

1. The amount of interest income received on obligations of any state, territory or possession of the United States, or any political subdivision thereof, located outside this state, reduced, for taxable years beginning from and after December 31, 1996, by the amount of any interest on indebtedness and other related expenses that were incurred or continued to purchase or carry those obligations and that are not otherwise deducted or subtracted in arriving at Arizona gross income.

2. The excess of a partner's share of partnership taxable income required to be included under chapter 14, article 2 of this title over the income required to be reported under section 702(a)(8) of the internal revenue code.

3. The excess of a partner's share of partnership losses determined pursuant to section 702(a)(8) of the internal revenue code over the losses allowable under chapter 14, article 2 of this title.

4. The amount of any depreciation allowance allowed pursuant to section 167(a) of the internal revenue code to the extent not previously added.

5. The amount of dividend income received from corporations and allowed as a deduction pursuant to sections 243, 245, 245A and 250(a)(1)(B) of the internal revenue code.

6. Taxes that are based on income paid to states, local governments or foreign governments and that were deducted in computing federal taxable income.

7. Expenses and interest relating to tax-exempt income on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the tax imposed by this title. Financial institutions, as defined in section 6-101, shall be governed by section 43-961, paragraph 2.

8. Commissions, rentals and other amounts paid or accrued to a domestic international sales corporation controlled by the payor corporation if the domestic international sales corporation is not required to report its taxable income to this state because its income is not derived from or attributable to sources within this state. If the domestic international sales corporation is subject to article 4 of this chapter, the department shall prescribe by rule the method of determining the portion of the commissions, rentals and other amounts that are paid or accrued to the controlled domestic international sales corporation and that shall be deducted by the payor.  For the purposes of this paragraph, "control" means direct or indirect ownership or control of fifty percent or more of the voting stock of the domestic international sales corporation by the payor corporation.

9. The amount of net operating loss taken pursuant to section 172 of the internal revenue code.

10. The amount of exploration expenses determined pursuant to section 617 of the internal revenue code to the extent that they exceed $75,000 and to the extent that the election is made to defer those expenses not in excess of $75,000.

11. Amortization of costs incurred to install pollution control devices and deducted pursuant to the internal revenue code or the amount of deduction for depreciation taken pursuant to the internal revenue code on pollution control devices for which an election is made pursuant to section 43-1129.

12. The amount of depreciation or amortization of costs of child care facilities deducted pursuant to section 167 or 188 of the internal revenue code for which an election is made to amortize pursuant to section 43-1130.

13. The loss of an insurance company that is exempt under section 43-1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43-947.

14. The amount by which the depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under section 43-1170 exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property.

15. The amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43-1170 and that is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43-1170.

16. The deduction referred to in section 1341(a)(4) of the internal revenue code for restoration of a substantial amount held under a claim of right.

17. The amount by which a capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds the capital loss carryover allowable pursuant to section 43-1130.01, subsection F.

18. Any wage expenses deducted pursuant to the internal revenue code for which a credit is claimed under section 43-1175 and representing net increases in qualified employment positions for employment of temporary assistance for needy families recipients.

19. Any amount of expenses that were deducted pursuant to the internal revenue code and for which a credit is claimed under section 43-1178.

20. Any amount deducted pursuant to section 170 of the internal revenue code representing contributions to a school tuition organization for which a credit is claimed under section 43-1183 or 43-1184.

21. If a subtraction is or has been taken by the taxpayer under section 43-1124, in the current or a prior taxable year for the full amount of eligible access expenditures paid or incurred to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8, any amount of eligible access expenditures that is recognized under the internal revenue code, including any amount that is amortized according to federal amortization schedules, and that is included in computing Arizona taxable income for the current taxable year.

22. For taxable years beginning from and after December 31, 2017, the amount of any net capital loss included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph:

(a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues.

(b) "Specie" means coins having precious metal content.

23. The amount of any deduction that is claimed in computing Arizona gross income and that represents a donation of a school site for which a credit is claimed under section 43-1181.

24. The amount of any motion picture production costs that was deducted pursuant to the internal revenue code for which a tax credit is claimed under section 43-1165.
A.R.S. § 43-1150 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1150
43-1150 Short title
Status: in_force

43-1150. Short title

This article may be cited as the uniform division of income for tax purposes act.
A.R.S. § 43-1142 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1142
43-1142 Average value of property
Status: in_force

43-1142. Average value of property

The average value of property shall be determined by averaging the values at the beginning and ending of the tax period, but the department may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer's property.
A.R.S. § 43-1140 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1140
43-1140 Property factor
Status: in_force

43-1140. Property factor

The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period other than real and tangible personal property used by either:

1. A foreign corporation which is not itself subject to the tax imposed by this title, unless the corporation is subject to the tax as a member of an Arizona affiliated group, as defined in section 43-947.

2. An insurance company that is exempt from tax under section 43-1201.
A.R.S. § 43-1167.01 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1167.01
43-1167.01 Credit for employing national guard members
Status: in_force

43-1167.01. Credit for employing national guard members

A. For taxable years beginning from and after December 31, 2005, a credit is allowed against the taxes imposed by this title for a taxpayer whose employee is a member of the Arizona national guard if the employee is placed on active duty.  The amount of the credit is one thousand dollars for each employee who is placed on active duty by the Arizona national guard.

B. To qualify for the credit:

1. The employee must be a member of the Arizona national guard who is employed by the taxpayer in a full-time equivalent position when the employee is placed on active duty.

2. Each member of the Arizona national guard who is employed must have served during the taxable year on active duty for training that exceeds the required annual training period, including any activation for federal or state contingencies or emergencies.

C. If the allowable credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used to offset taxes under this title may be carried forward for not more than five consecutive taxable years as a credit against subsequent years' income tax liability.

D. The credit under this section may be claimed only once by the taxpayer in any taxable year with respect to each employee who is placed on active duty by the Arizona national guard, but may be claimed again for that employee in a subsequent taxable year if that employee remains on active duty or is placed again on active duty in a subsequent taxable year.

E. Co-owners of a business, including corporate partners in a partnership, may each claim only the pro rata share of the credit allowed under this section based on the ownership interest.  The total of the credits allowed all such owners may not exceed the amount that would have been allowed a sole owner.