A.R.S. § 43-1022 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1022
43-1022 Subtractions from Arizona gross income
Status: in_force

43-1022. Subtractions from Arizona gross income

In computing Arizona adjusted gross income, the following amounts shall be subtracted from Arizona gross income:

1. The amount of exemptions allowed by section 43-1023.

2. Benefits, annuities and pensions in an amount totaling not more than $2,500 received from one or more of the following:

(a) The United States government service retirement and disability fund, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law, except retired or retainer pay of the uniformed services of the United States that qualifies for a subtraction under paragraph 26 of this section.

(b) The Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan, an optional retirement program established by the Arizona board of regents under section 15-1628, an optional retirement program established by a community college district board under section 15-1451 or a retirement plan established for employees of a county, city or town in this state.

3. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43-1333 decreases the beneficiary's Arizona gross income.

4. Interest income received on obligations of the United States, minus any interest on indebtedness, or other related expenses, and deducted in arriving at Arizona gross income, that were incurred or continued to purchase or carry such obligations.

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

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

7. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations.

8. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code.

9. The amount of exploration expenses that is determined pursuant to section 617 of the internal revenue code, that has been deferred in a taxable year ending before January 1, 1990 and for which a subtraction has not previously been made. The subtraction shall be made on a ratable basis as the units of produced ores or minerals discovered or explored as a result of this exploration are sold.

10. The amount included in federal adjusted gross income pursuant to section 86 of the internal revenue code, relating to taxation of social security and railroad retirement benefits.

11. To the extent not already excluded from Arizona gross income under the internal revenue code, compensation received for active service as a member of the reserves, the national guard or the armed forces of the United States, including compensation for service in a combat zone as determined under section 112 of the internal revenue code.

12. The amount of unreimbursed medical and hospital costs, adoption counseling, legal and agency fees and other nonrecurring costs of adoption.  The subtraction under this paragraph may be taken for the costs that are described in this paragraph and that are incurred in prior years, but the subtraction may be taken only in the year during which the final adoption order is granted.  The amount subtracted may not exceed:

(a) In taxable years beginning before December 31, 2025, $3,000. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $3,000.

(b) In taxable years beginning from and after December 31, 2025, $5,000 for a single individual or head of household.

(c) For taxable years beginning from and after December 31, 2025, $10,000 for a married couple filing a joint return.  In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $10,000.

13. The amount authorized by section 43-1027 for the taxable year relating to qualified wood stoves, wood fireplaces or gas fired fireplaces.

14. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 43-1029, subsection F exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code.

15. Any amount of qualified educational expenses that is distributed from a qualified state tuition program determined pursuant to section 529 of the internal revenue code and that is included in income in computing federal adjusted gross income.

16. Any item of income resulting from an installment sale that has been properly subjected to income tax in another state in a previous taxable year and that is included in Arizona gross income in the current taxable year.

17. For property placed in service:

(a) In taxable years beginning before December 31, 2012, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service.

(b) In taxable years beginning from and after December 31, 2012 through December 31, 2013, an amount determined in the year the asset was placed in service based on the calculation in subdivision (a) of this paragraph. In the first taxable year beginning from and after December 31, 2013, the taxpayer may elect to subtract the amount necessary to make the depreciation claimed to date for the purposes of this title the same as it would have been if subdivision (c) of this paragraph had applied for the entire time the asset was in service. Subdivision (c) of this paragraph applies for the remainder of the asset's life. If the taxpayer does not make the election under this subdivision, subdivision (a) of this paragraph applies for the remainder of the asset's life.

(c) In taxable years beginning from and after December 31, 2013 through December 31, 2015, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been ten percent of the amount allowed pursuant to section 168(k) of the internal revenue code.

(d) In taxable years beginning from and after December 31, 2015 through December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been fifty-five percent of the amount allowed pursuant to section 168(k) of the internal revenue code.

(e) In taxable years beginning from and after December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k) of the internal revenue code.

18. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1021, paragraph 11 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current or prior taxable years.

19. The amount contributed during the taxable year to college savings plans established pursuant to section 529 of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income.  The amount subtracted may not exceed:

(a) $2,000 per beneficiary for a single individual or a head of household.

(b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary.

20. The portion of the net operating loss carryforward that would have been allowed as a deduction in the current year pursuant to section 172 of the internal revenue code if the election described in section 172(b)(1)(H) of the internal revenue code had not been made in the year of the loss that exceeds the actual net operating loss carryforward that was deducted in arriving at federal adjusted gross income.  This subtraction only applies to taxpayers who made an election under section 172(b)(1)(H) of the internal revenue code as amended by section 1211 of the American recovery and reinvestment act of 2009 (P.L. 111-5) or as amended by section 13 of the worker, homeownership, and business assistance act of 2009 (P.L. 111-92).

21. For taxable years beginning from and after December 31, 2013, the amount of any net capital gain included in federal adjusted gross income for the taxable year derived from investment in a qualified small business as determined by the Arizona commerce authority pursuant to section 41-1518.

22. An amount of any net long-term capital gain included in federal adjusted gross income for the taxable year that is derived from an investment in an asset acquired after December 31, 2011, as follows:

(a) For taxable years beginning from and after December 31, 2012 through December 31, 2013, ten percent of the net long-term capital gain included in federal adjusted gross income.

(b) For taxable years beginning from and after December 31, 2013 through December 31, 2014, twenty percent of the net long-term capital gain included in federal adjusted gross income.

(c) For taxable years beginning from and after December 31, 2014, twenty-five percent of the net long-term capital gain included in federal adjusted gross income.  For the purposes of this paragraph, a transferee that receives an asset by gift or at the death of a transferor is considered to have acquired the asset when the asset was acquired by the transferor. If the date an asset is acquired cannot be verified, a subtraction under this paragraph is not allowed.

23. If an individual is not claiming itemized deductions pursuant to section 43-1042, the amount of premium costs for long-term care insurance, as defined in section 20-1691.

24. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1024.

25. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain 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.

26. Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows:

(a) For taxable years through December 31, 2018, an amount totaling not more than $2,500.

(b) For taxable years beginning from and after December 31, 2018 through December 31, 2020, an amount totaling not more than $3,500.

(c) For taxable years beginning from and after December 31, 2020, the full amount received.

27. For taxable years beginning from and after December 31, 2020, the amount contributed during the taxable year to an achieving a better life experience account established pursuant to section 529A of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income.  The amount subtracted may not exceed:

(a) $2,000 per beneficiary for a single individual or a head of household.

(b) $4,000 per beneficiary for a married couple filing a joint return.  In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary.

28. For taxable years beginning from and after December 31, 2020, Arizona small business gross income but only if an individual taxpayer has elected to separately report and pay tax on the taxpayer's Arizona small business adjusted gross income on the Arizona small business income tax return.

29. To the extent not already excluded from Arizona gross income under the internal revenue code, the value of virtual currency and non-fungible tokens the taxpayer received pursuant to an airdrop at the time of the airdrop. This paragraph may not be interpreted as providing a subtraction for any appreciation in value that occurs from holding the virtual currency after the initial receipt of the airdrop. For the purposes of this paragraph:

(a) "Airdrop" means the receipt of virtual currency through a means of distribution of virtual currency to the distributed ledger addresses of multiple taxpayers.

(b) "Non-fungible token" has the same meaning prescribed in section 43-1028.

(c) "Virtual currency" has the same meaning prescribed in section 43-1028.

30. The amount allowed as a subtraction by section 43-1028 for gas fees not already included in the taxpayer's virtual currency or non-fungible token basis.
A.R.S. § 43-401 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 401
43-401 Withholding tax; rates; election by employee
Status: in_force

43-401. Withholding tax; rates; election by employee

A. Except as provided by subsections B and H of this section, every employer at the time of the payment of wages, salary, bonus or other emolument to any employee whose compensation is for services performed within this state shall deduct and retain from the compensation an amount prescribed by tables adopted by the department.

B. An employer may voluntarily elect to not withhold tax during December by notifying:

1. The department on a form prescribed by the department.

2. The employer's employees in writing in a manner prescribed by the department.

C. If the amount collected and payable by the employer to the department in each of the preceding four calendar quarters did not exceed an average of one thousand five hundred dollars, the amount collected shall be paid to the department on or before April 30, July 31, October 31 and January 31 for the preceding calendar quarter.  If the amount exceeded one thousand five hundred dollars in each of the preceding four calendar quarters, the employer shall pay to the department the amount the employer deducts and retains pursuant to this section at the same time as the employer is required to make deposits of federal tax pursuant to section 6302 of the internal revenue code.  On or before April 30, July 31, October 31 and January 31 each year, the employer shall reconcile the amounts payable during the preceding calendar quarter in a manner prescribed by the department, except that if the full amount collected and payable is paid timely to the department under this subsection, the employer may reconcile the amounts on or before May 10, August 10, November 10 and February 10 each year.  The department by rule may allow and determine which employers qualify for annual payments of withholding taxes, with an annual report by the employer pursuant to section 43-412, subsection B, if the qualifying employer has established sufficient payment history to indicate that the employer is current and in good standing pursuant to standards established by rule.  For any business that has not had a withholding certificate for the four preceding consecutive quarters, the quarterly average shall be computed in a manner prescribed by the department.

D. If an employer fails to make a timely monthly payment because prior to that reporting period it reported on a quarterly basis instead of on a monthly basis, the department shall notify the employer that it is out of compliance with this section. Notwithstanding section 42-1125, the department shall not assess a penalty against an employer for failing to make a timely monthly payment if the employer had filed and remitted all taxes due on a quarterly basis and brings all filings and payments into current compliance within thirty days after being notified by the department.

E. Each employee shall elect the amount authorized by subsection A of this section to be withheld for application toward the employee's state income tax liability.  The election provided under this subsection shall be exercised by each employee, in writing on a form prescribed by the department.  The election shall be made within five days of employment.  Each employer shall notify the employees of the election made available under this subsection and shall have election forms available at all times.  Each form shall be completed in triplicate, with one copy each for the department, the employer and the employee.  The employer shall file a copy of each completed form with the department.  Any employee failing to complete an election form as prescribed shall be deemed to have elected the withholding percentage prescribed by the department.

F. Before July 1 of each year, each employer who chooses to not withhold tax pursuant to subsection B of this section shall notify each employee that:

1. State income taxes will not be withheld from compensation in December.

2. The employee may elect to change the rate of withholding tax prescribed by this section to compensate for the resulting change in annual withholdings from the employee's compensation.

G. At an employee's written request, the employer may agree to reduce the amount withheld under this section by the amount of credit that the employee represents to the employer that the employee will qualify for and be entitled to under sections 43-1088, 43-1089, 43-1089.01 and 43-1089.03. The employee's request must include the name and address of the qualifying charitable organization, qualified school tuition organization or public school.  Within thirty days after agreeing to the employee's request, the employer shall reduce the withholding amount by the amount of the credit, but not below zero, prorated for the number of pay periods remaining in the employee's taxable year after the employee makes the request.  If an employer agrees to reduce the withholding amount pursuant to this subsection, the following apply:

1. Within fifteen days after the end of each calendar quarter, the employer must pay the entire amount of the reduction in withholding tax for that quarter to the designated charitable organization, school tuition organization or public school.  These payments are considered to be on the employee's behalf, and not the employer's, for the purposes of qualifying for the income tax credits under sections 43-1088, 43-1089, 43-1089.01 and 43-1089.03.

2. The employee is responsible and accountable for the accuracy and the amount of reduction in withholding tax and the payments to the charitable organization, school tuition organization or public school.

3. The employer is responsible and accountable to the charitable organization, school tuition organization or public school, to the employee and to the department for actually making the required payments.

4. Within thirty days after the end of each calendar year, or within fifteen days after the termination of employment, the employer must furnish to each electing employee a statement of the amount withheld and paid on behalf of the employee during that year.

H. An employer shall not withhold tax on the wages of the employer's nonresident employees who are 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.
A.R.S. § 43-382 — Arizona Code / Title 43 / Chapter 3 / Article 5 / Section 382
43-382 Solicitation of return preparation prohibited; classification
Status: in_force

43-382. Solicitation of return preparation prohibited; classification

It is a class 1 misdemeanor for any person to solicit preparation of returns or reports required by this title by offering or giving cash or credit to the taxpayer directly or indirectly based upon all or part of an anticipated refund to the taxpayer indicated by the report or return, or to require by any contract, agreement or pledge an assignment or other transfer of all or any part of an anticipated refund to the taxpayer as indicated by the report or return.
A.R.S. § 43-1122 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1122
43-1122 Subtractions from Arizona gross income; corporations
Status: in_force

43-1122. Subtractions from Arizona gross income; corporations

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

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

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

3. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations.

4. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code.

5. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1121, paragraph 4 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current taxable year or prior taxable years.

6. With respect to a financial institution as defined in section 6-101, expenses and interest relating to tax-exempt income disallowed pursuant to section 265 of the internal revenue code.

7. Dividends received from another corporation owned or controlled directly or indirectly by a recipient corporation. 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 payor corporation by the recipient corporation. Dividends shall have the meaning provided in section 316 of the internal revenue code. This subtraction shall apply without regard to section 43-961, paragraph 2 and article 4 of this chapter.

8. Interest income received on obligations of the United States.

9. The amount of dividend income from foreign corporations.  For the purposes of this paragraph, gross up income as described in section 78 of the internal revenue code, global intangible low-taxed income as defined in section 951A of the internal revenue code and subpart F income as defined in section 952 of the internal revenue code shall be considered foreign dividends.

10. The amount of net operating loss allowed by section 43-1123.

11. The amount of any state income tax refunds received that were included as income in computing federal taxable income.

12. The amount of expense recapture included in income pursuant to section 617 of the internal revenue code for mine exploration expenses.

13. The amount of deferred exploration expenses allowed by section 43-1127.

14. The amount of exploration expenses related to the exploration of oil, gas or geothermal resources, computed in the same manner and on the same basis as a deduction for mine exploration pursuant to section 617 of the internal revenue code. This computation is subject to the adjustments contained in section 43-1121, paragraph 10 and paragraphs 12 and 13 of this section relating to exploration expenses.

15. The amortization of pollution control devices allowed by section 43-1129.

16. The amount of amortization of the cost of child care facilities pursuant to section 43-1130.

17. The amount of income from a domestic international sales corporation required to be included in the income of its shareholders pursuant to section 995 of the internal revenue code.

18. The income 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.

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

20. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k)(7) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service.

21. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1124.

22. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain 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. With respect to a public service corporation operating a water system or sewage disposal facility, the amount of monies or property received as a contribution in aid of construction.  For the purposes of this paragraph:

(a) "Contribution in aid of construction" means any amount of monies or other property contributed to a public service corporation that provides water or sewage disposal services to the extent that the purpose of the contribution is to provide for expanding, improving or replacing the public service corporation's water system or sewage disposal facilities, including any amount of monies or other property contributed to a public service corporation for a water system or sewage disposal facility subject to a contingent obligation to repay the amount, in whole or in part, to the contributor.

(b) "Public service corporation" means a public service corporation as defined in article XV, section 2, Constitution of Arizona, that is regulated by the corporation commission.
A.R.S. § 43-1095 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1095
43-1095 Apportionment of deductions
Status: in_force

43-1095. Apportionment of deductions

In computing Arizona taxable income a nonresident taxpayer, the standard deduction allowed in section 43-1041 and the itemized deductions allowed in section 43-1042 shall be allowed in the percentage that the taxpayer's Arizona gross income is of the federal adjusted gross income.
A.R.S. § 43-107 — Arizona Code / Title 43 / Chapter 1 / Article 1 / Section 107
43-107 Nonconformity in application of internal revenue code; abatement of penalties and interest; definitions
Status: in_force

43-107. Nonconformity in application of internal revenue code; abatement of penalties and interest; definitions

A. Notwithstanding sections 42-1123 and 42-1125, no interest or penalty may be assessed on a nonconformity deficiency if all of the following are true for a taxable year:

1. The taxpayer filed a return and paid the taxes due, relying on the department's published forms and instructions.

2. Conformity does not occur.

3. The department supplements its published forms and instructions related to nonconformity and requires the taxpayer to file an amended return.

4. By the extended due date of the next taxable year's return, the taxpayer amends its return to report the nonconformity deficiency and pays the additional tax in the manner prescribed by the department.

B. Notwithstanding section 42-1123, the department shall not pay interest on refunds resulting from an amended return related to nonconformity unless the refund is paid more than sixty days after the due date set forth in subsection A, paragraph 4 of this section or filing date, whichever is later.

C. For the purposes of this section:

1. "Conformity" means an amendment to section 43-105 that results in adoption of the definition of the internal revenue code for the taxable year.

2. "Nonconformity" means either:

(a) Conformity plus another amendment to this title that does not conform to specific provisions of the internal revenue code as defined in section 43-105 for the taxable year.

(b) No amendment to section 43-105 for the taxable year.
A.R.S. § 43-411 — Arizona Code / Title 43 / Chapter 4 / Article 2 / Section 411
43-411 Employer entitled to address of employee
Status: in_force

43-411. Employer entitled to address of employee

When necessary to make effective the provisions of this chapter, the name and address of the recipient of income shall be furnished upon demand of the person paying the wages. The department shall furnish the person paying the wages with forms to be signed by the person from whom the tax is being withheld. Such forms shall provide for the information the department deems necessary.
A.R.S. § 43-1741 — Arizona Code / Title 43 / Chapter 17 / Article 5 / Section 1741
43-1741 Credit for income taxes paid to other states; definitions
Status: in_force

43-1741. Credit for income taxes paid to other states; definitions

A. Subject to the following conditions, residents of this state are allowed a credit against the taxes imposed by this chapter for net income taxes imposed by and paid to another state or country on income taxable under this chapter:

1. The credit is allowed only for taxes paid to the other state or country on income that is derived from sources within that state or country and that is taxable under its laws irrespective of the residence or domicile of the recipient.

2. The credit is not allowed if the other state or country allows residents of this state a credit against the taxes imposed by that state or country for taxes paid or payable under this chapter.

3. The credit may not exceed the proportion of the tax payable under this chapter as the small business income subject to tax in the other state or country and also taxable under this chapter bears to the taxpayer's entire small business income on which the tax is imposed by this chapter.

B. If any taxes paid to another state or country for which a taxpayer has been allowed a credit under this section are at any time credited or refunded to the taxpayer:

1. The taxpayer shall immediately report that fact to the department.

2. A tax equal to the credit allowed for the taxes credited or refunded by the other state or country is due and payable from the taxpayer on notice and demand from the department.

3. Interest shall be added to and collected as a part of the tax at the rate determined pursuant to section 42-1123 from the date the credit was allowed under this chapter to the date of the notice and demand.

4. If the tax and interest are not paid within ten days after the date of notice and demand, there shall be collected as a part of the tax interest on the unpaid amount of tax and interest at the rate of twelve percent a year from the date of the notice and demand until the amount is paid.

C. The credit against the taxes imposed by this chapter for net income taxes paid to another state or country is not allowed to any taxpayer or any class of taxpayers if the allowances of the credit will result in any invalid or illegal discrimination against another taxpayer or another class of taxpayers.

D. Subject to the following conditions, a resident of this state, who is also considered to be a resident of another state under the laws of the other state, is allowed a credit against the taxes imposed by this chapter for net income taxes imposed by and paid to that state on income taxable under this chapter as follows:

1. The credit is allowed only if the other state taxes the income to the resident of this state and does not allow the taxpayer a credit against taxes imposed by that state on that income for taxes paid or payable on that income under this chapter.

2. The credit is allowed only for the proportion of the taxes paid to the other state as the income taxable under this chapter and also subject to tax in the other state bears to the entire income under this chapter on which the taxes paid to the other state are imposed.

3. The credit may not exceed the proportion of the tax payable under this chapter as the income taxable under this chapter and also subject to tax in the other state bears to the entire income taxable under this chapter.

4. For the purpose of the credit allowed under this subsection, "income taxable under this chapter and also subject to tax in the other state" means income that would be sourced to the other state if the other state were imposing its income tax on the taxpayer as if the taxpayer was a nonresident of that other state.

E. The taxpayer may apply the allowable credit only against Arizona income tax for the same taxable year in which the income is subject to tax in the other state.

F. A small business taxpayer who participates in a composite income tax return in another state may claim a credit for taxes paid to the other state if the taxpayer meets all the requirements of this section and the taxes paid to the other state are imposed on and paid directly by the small business taxpayer and not the entity. For the purposes of this subsection, taxes are considered to be imposed on and paid directly by the small business taxpayer under one or more of the following circumstances:

1. The small business taxpayer makes direct payment to the other state.

2. The small business taxpayer makes direct payment to the entity filing the composite income tax return.

3. The entity charges the small business taxpayer's loan account for the amount of the tax.

4. The entity reduces the small business taxpayer's capital account.

G. If the taxpayer claims the credit for taxes paid to a foreign country, the taxpayer shall use the conversion rate in effect on the date the taxpayer paid the taxes to the foreign country.

H. For the purposes of this section:

1. "Composite income tax return" means a single income tax return that is filed with another state on behalf of a group of small business taxpayers who are partners or shareholders of the partnership or S corporation that filed the return on their behalf.

2. "Entire small business income on which the tax is imposed by this chapter" means Arizona small business adjusted gross income as defined and computed under section 43-1701.

3. "Income subject to tax in the other state or country and also taxable under this chapter" means the portion of income that is included in the entire income on which the tax is imposed by this chapter that is also included in the entire small business income on which the other state's or country's tax is imposed. The taxpayer shall increase or reduce the portion of income that is included in the entire small business income on which the tax is imposed by this chapter by any related additions under section 43-1021 and by any related subtractions under section 43-1022. The taxpayer shall increase or reduce the portion of income that is included in the entire small business income on which the other state's or country's tax is imposed by any related additions and subtractions under the other state's equivalent of sections 43-1021 and 43-1022, as applicable.

4. "Net income tax":

(a) Means:

(i) A tax that grants deductions or exemptions from gross income.

(ii) Any tax imposed by another country that qualifies for a credit under sections 901 and 903 of the internal revenue code and the regulations under those sections, even if withheld from income.

(b) Except as specifically included in subdivision (a) of this paragraph, does not include:

(i) A system of taxation that assesses taxes on gross income, gross receipts or gross dividends.

(ii) Taxes withheld from income.

5. "Small business income on which the other state's or country's tax is imposed" means the other state's or country's income computed under the equivalent of section 43-1094 but does not include any exemption allowable under the equivalent of section 43-1023.

6. "Tax payable under this chapter" means the income tax imposed by this state on the taxpayer's taxable income as defined by section 43-1001 minus any tax credit amount claimed for the taxable year under this article but not including the credit amount allowed under this section.
A.R.S. § 43-1162 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1162
43-1162 Healthy forest production tax credit; definitions
Status: in_force

43-1162. Healthy forest production tax credit; definitions

A. For taxable years beginning from and after December 31, 2020, a credit is allowed against the taxes imposed by this title for processing qualifying forest products.

B. The taxpayer is eligible for the credit if all of the following apply:

1. The taxpayer has a current healthy forest enterprise incentive certification and memorandum of understanding with the Arizona commerce authority pursuant to section 41-1516.

2. The taxpayer processes qualifying forest products from a qualifying project from and after December 31, 2020 and before January 1, 2031.

3. The facility that processes qualifying forest products is located within this state.

C. The taxpayer is eligible for the credit for the calendar year in which the qualifying project processes qualifying forest products pursuant to subsection B of this section.

D. If the allowable credit under this section 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.

E. The credit authorized by this section is based on the number of tons of qualifying forest products that a taxpayer processes 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.

F. Subject to subsection H of this section, the amount of the credit is $10,000 for the first twenty thousand tons and $5,000 for every ten thousand tons thereafter of qualifying forest products the taxpayer processes in the calendar year.

G. 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 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 taxpayer's name, address and social security number or federal employer identification number.

2. The location of the taxpayer's facility that processes qualifying forest products for which the credit is claimed.

3. The amount of the credit that is claimed.

4. The date the taxpayer began processing commercially marketable amounts of qualifying forest products.

5. Any additional information that the department requires.

H. The department shall review each application under subsection G of this section and certify to the taxpayer the amount of the credit authorized. The amount of the credit for any calendar year may not exceed $500,000 per taxpayer that processes qualifying forest products. Credits are allowed under this section and section 43-1076.01 on a first-come, first-served basis. The department may not authorize tax credits under this section and section 43-1076.01 that exceed in the aggregate a total of $2,000,000 for any calendar year.

I. The first time a taxpayer submits a qualified application under subsection G of this section, the department shall add the taxpayer's name to a credit authorization list in the order in which qualified applications are first received by the department on behalf of the taxpayer. A taxpayer's position on the credit authorization list shall be determined in the first year the taxpayer submits an application under subsection G of this section for processing qualifying forest products.  The taxpayer's position on the list shall remain unchanged for the  remainder of the period 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 G of this section or otherwise fails to comply with this section. If a taxpayer is removed from the credit authorization list for processing qualifying forest products, the taxpayer may establish a new position on the credit authorization list in a subsequent year by filing a timely application for processing qualifying forest products that qualifies for the credit.

J. If an application is received that, if authorized, would require the department to exceed the $2,000,000 limit, the department shall grant the applicant only the remaining credit amount that would not exceed the $2,000,000 limit. After the department authorizes $2,000,000 in tax credits, the department shall deny any subsequent applications received for that calendar year.  The department may not authorize any additional tax credits that exceed the $2,000,000 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.

K. Co-owners of a facility that processes qualifying forest products, including corporate partners in a partnership, 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 that process qualifying forest products may not exceed the amount that would have been allowed for a sole owner.

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

M. For the purposes of this section:

1. "Processed" or "processing" means any change in the physical structure of qualifying forest products removed from a qualifying project into a marketable commercial product or component of a product that has commercial value to a consumer or purchaser and that is ready to be used with or without further altering its form.

2. "Qualifying forest products" means qualifying forest products as defined in section 41-1516 that are sourced within this state.

3. "Qualifying project" has the same meaning prescribed in section 41-1516.
A.R.S. § 43-1089.03 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1089.03
43-1089.03 Credit for contributions to certified school tuition organization
Status: in_force

43-1089.03. Credit for contributions to certified school tuition organization

A. A credit is allowed against the taxes imposed by this title for the amount of voluntary cash contributions by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection I during the taxable year to a school tuition organization that is certified pursuant to chapter 16 of this title at the time of donation.  Except as provided by subsection C of this section, the amount of the credit shall not exceed:

1. Five hundred dollars in any taxable year for a single individual or a head of household.

2. One thousand dollars in any taxable year for a married couple filing a joint return.

B. 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.

C. For each taxable year beginning on or after January 1, the department shall adjust the dollar amounts prescribed by subsection A, 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 bureau of labor statistics, except that the dollar amounts shall not be revised downward below the amounts allowed in the prior taxable year. The revised dollar amounts shall be raised to the nearest whole dollar.

D. 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.

E. 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.

F. 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 dependent of the taxpayer or if the taxpayer designates a student beneficiary as a condition of the taxpayer's contribution to the school tuition organization.  The tax credit is not allowed if the taxpayer, with the intent to benefit the taxpayer's dependent, agrees with one or more other taxpayers to designate each taxpayer's contribution to the school tuition organization for the direct benefit of the other taxpayer's dependent.

G. For the purposes of this section, a contribution, for which a credit is claimed, 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.

H. A taxpayer may not claim a credit under this section and also under section 43-1089 with respect to the same contribution.  If a taxpayer's contribution to a school tuition organization exceeds the amount of the credit allowed under section 43-1089, a taxpayer may claim a credit under this section and also under section 43-1089. If a taxpayer's contribution to a school tuition organization does not exceed the amount of the credit allowed by section 43-1089, the contribution is considered to have been made pursuant to section 43-1089.
A.R.S. § 43-1097 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1097
43-1097 Change of residency status
Status: in_force

43-1097. Change of residency status

A. During the tax year in which a taxpayer changes from a resident to a nonresident, Arizona taxable income shall include all of the following:

1. All income and deductions realized or recognized, or both, depending on the taxpayer's method of accounting, during the period the individual was a resident, and any income accrued by a cash basis taxpayer prior to the time the taxpayer became a nonresident of this state.

2. All income and deductions earned in Arizona or derived from Arizona sources after the time the taxpayer became a nonresident of this state.

B. During the tax year in which a taxpayer changes from a nonresident to a resident, Arizona taxable income shall include all of the following:

1. All income and deductions realized or recognized, or both, depending on the taxpayer's method of accounting, during the period the individual was a resident, except any income accrued by a cash basis taxpayer prior to the time the taxpayer became a resident of this state.

2. All income and deductions earned in Arizona or derived from Arizona sources prior to the time the taxpayer became a resident of this state.

C. Income received while a nonresident from the wages or salary received by an 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 derived from sources within this state.
A.R.S. § 43-1414 — Arizona Code / Title 43 / Chapter 14 / Article 2 / Section 1414
43-1414 Federal assessment of imputed underpayment; definitions
Status: in_force

43-1414. Federal assessment of imputed underpayment; definitions

A. A partnership that is audited by the internal revenue service and that is assessed an imputed underpayment pursuant to section 6225 of the internal revenue code as added by the bipartisan budget act of 2015 (P.L. 114-74), a partnership that makes the election under section 6226 of the internal revenue code as added by the bipartisan budget act of 2015 (P.L. 114-74) or a partnership that amends its return under section 6227 of the internal revenue code as added by the bipartisan budget act of 2015 (P.L. 114-74) shall file a return for the reviewed year on a form prescribed by the department that shows the adjustments to income or the gain, loss or deduction on which the federal imputed underpayment was based as well as any of the correlative adjustments to the additions required under section 43-1021 or the subtractions required under section 43-1022.

B. If the adjustments determined in subsection A of this section are:

1. A net increase in Arizona taxable income and paragraph 2 of this subsection does not apply:

(a) Within ninety days after the final determination regarding the adjustment from the internal revenue service, the partnership shall pay the tax on the adjustments in lieu of passing the adjustments through to the partners.

(b) The tax shall be imposed on the Arizona share of the adjustments at the highest tax rate imposed on individuals under section 43-1011.

(c) Interest shall be computed pursuant to section 42-1123 for the period beginning on the day after the partnership return due date for the reviewed year, without regard to any extensions.

(d) For the purposes of imposing penalties under section 42-1125, the due date of the return under subsection A of this section is the ninetieth day after the final determination of the partnership adjustments by the internal revenue service.

2. A net reduction in Arizona taxable income or a net increase in Arizona taxable income of a partnership that makes the election under section 6226 of the internal revenue code as added by the bipartisan budget act of 2015 (P.L. 114-74), within ninety days after the final determination regarding the adjustment from the internal revenue service, the partnership shall furnish to each partner of the partnership and to the department a statement on a form prescribed by the department of the partner's share of the adjustments required in subsection A of this section. The amount reported to the partner under this subsection is an adjustment to the partner's share of partnership taxable income.  A partnership that had a net increase under this paragraph and that fails to timely provide the statements required to the partners and to the department shall pay the tax pursuant to paragraph 1 of this subsection in lieu of the partners reporting the adjustment.

C. If a partnership fails to file the return that is required under subsection A of this section or if the department is not satisfied with the return or the payment of the tax required to be paid, the department may issue a deficiency assessment to the partnership under section 42-1108.

D. If the partnership incorrectly reported the adjustments under subsection A of this section that resulted in:

1. An understatement of the distribution of Arizona taxable income to the partners under subsection B, paragraph 2 of this section, the partnership shall pay the tax on the understatement by applying the calculation in subsection B, paragraph 1 of this section to the unreported adjustments.

2. An overstatement of Arizona taxable income, any adjustment shall be handled as follows:

(a) If the adjustments were originally passed through to the partners under subsection B, paragraph 2 of this section, the adjustment shall be passed through to the partners.  The partnership shall amend the return under subsection A of this section and amend the statements provided to the partners and the department under subsection B, paragraph 2 of this section.

(b) If the tax on the adjustments was originally paid by the partnership pursuant to subsection B, paragraph 1 of this section, the partnership shall amend the return filed pursuant to subsection B, paragraph 1 of this section to claim any refund.  This subdivision does not allow a partnership to claim a refund for amounts not actually paid by the partnership.

E. For the purposes of this section:

1. "Arizona share of the adjustments" means the adjustments determined in subsection A of this section, subject to the allocation and apportionment provisions of chapter 11, article 4 of this title.

2. "Final determination" has the same meaning prescribed in section 43-327.

3. "Reviewed year" means the partnership taxable year to which the items adjusted by the internal revenue service relate.
A.R.S. § 43-301 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 301
43-301 Individual returns; definition
Status: in_force

43-301. Individual returns; definition

A. A full-year or part-year resident individual shall file a return with the department if, for the taxable year, the individual's gross income was greater than the amount of the standard deduction allowed under subsection 43-1041, subsection A as adjusted for inflation pursuant to section 43-1041, subsection H.

B. A nonresident individual shall file a return with the department if, for the taxable year, the individual's gross income was greater than the amount under subsection A of this section determined for a full-year or part-year resident individual multiplied by the percentage that the individual's Arizona gross income is of the individual's federal adjusted gross income.

C. In the case of a husband and wife, 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 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.

D. This section applies regardless of whether an individual is required to file a return under the internal revenue code or whether the individual has any federal adjusted gross income for the taxable year.

E. For the purposes of this section, "gross income" means gross income as defined in the internal revenue code minus income included in gross income but excluded from taxation under this title.
A.R.S. § 43-1123 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1123
43-1123 Net operating loss; definition
Status: in_force

43-1123. Net operating loss; definition

A. For the purposes of this section, "net operating loss" means:

1. In the case of a taxpayer who has a net operating loss for the taxable year within the meaning of section 172(c) of the internal revenue code, the amount of the net operating loss increased by the subtractions specified in section 43-1122, except the subtraction allowed in section 43-1122, paragraph 10, and reduced by the additions specified in section 43-1121.

2. In the case of a taxpayer not described in paragraph 1 of this subsection, any excess of the subtractions specified in section 43-1122, except the subtraction allowed in section 43-1122, paragraph  10, over the sum of the Arizona gross income plus the additions specified in section 43-1121.

B. If for any taxable year the taxpayer has a net operating loss:

1. Such net operating loss shall be a net operating loss carryover for:

(a) Each of the five succeeding taxable years for net operating losses arising in taxable periods through December 31, 2011.

(b) Each of the twenty succeeding taxable years for net operating losses arising in taxable periods beginning from and after December 31, 2011.

2. The carryover in the case of each such succeeding taxable year, other than the first succeeding taxable year, shall be the excess, if any, of the amount of such net operating loss over the sum of the taxable income for each of the intervening years computed by determining the net operating loss subtraction for each intervening taxable year, without regard to such net operating loss or to the net operating loss for any succeeding taxable year.

C. The amount of the net operating loss subtraction shall be the aggregate of the net operating loss carryovers to the taxable year.
A.R.S. § 43-1602 — Arizona Code / Title 43 / Chapter 16 / Article 1 / Section 1602
43-1602 Certification as a school tuition organization
Status: reserved

43-1602. Certification as a school tuition organization

A. A nonprofit organization in this state that is exempt or has applied for exemption from federal taxation under section 501(c)(3) of the internal revenue code may apply to the department of revenue for certification as a school tuition organization, and the department shall certify the school tuition organization if it meets the requirements prescribed by this chapter.  An organization must apply for certification on a form prescribed and furnished on request by the department.

B. The department shall:

1. Maintain a public registry of currently certified school tuition organizations.

2. Make the registry available to the public on request.

3. Post the registry on the department's official website.

C. The department shall send notice by certified mail or by e-mail to a school tuition organization if the department determines that the school tuition organization has engaged in any of the following activities:

1. Failed or refused to allocate at least ninety percent of annual revenues from contributions made for the purposes of sections 43-1089 and 43-1089.03 for educational scholarships or tuition grants.

2. Failed or refused to file the annual reports required by section 43-1604.

3. Limited the availability of scholarships to students of only one school.

4. Encouraged, facilitated or knowingly permitted taxpayers to engage in actions prohibited by this article.

5. Awarded, restricted or reserved educational scholarships or tuition grants for use by a particular student based solely on the recommendation of the donor.

6. Failed or refused to meet any of the requirements in section 43-1603, subsection B.

7. Failed or refused to include the notice required in section 43-1603, subsection C.

8. Failed or refused to comply with the audit or financial review requirements of section 43-1605.

D. A school tuition organization that receives notice from the department pursuant to subsection C of this section has ninety days to correct the violation identified by the department in the notice.  If a school tuition organization fails or refuses to comply after ninety days, the department may remove the organization from the list of certified school tuition organizations and shall make available to the public notice of removal as soon as possible.  An organization that is removed from the list of certified school tuition organizations must notify any taxpayer who attempts to make a contribution that the contribution is not eligible for the tax credit and offer to refund all donations received after the date of the notice of termination of certification.

E. A school tuition organization may request an administrative hearing on the revocation of its certification as provided by title 41, chapter 6, article 10. Except as provided in section 41-1092.08, subsection H, a decision of the department is subject to judicial review pursuant to title 12, chapter 7, article 6.
A.R.S. § 43-328 — Arizona Code / Title 43 / Chapter 3 / Article 2 / Section 328
43-328 Returns filed by persons outside the United States
Status: in_force

43-328. Returns filed by persons outside the United States

If it is determined by the department, under regulations prescribed by it, that by reason of an individual being outside the United States, it is impossible or impractical to perform any one or more of the acts specified in this title, then in determining under this title whether the act was performed within the prescribed time, in respect of any liability for taxes, interest or penalties affected by the failure to perform the act within such time and in determining the amount of any credit or refund, including interest, affected by such failure, there shall be disregarded the period such person was thus unable to conform to the provisions of this title.
A.R.S. § 43-1184 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1184
43-1184 Credit for contributions to school tuition organization; displaced students; students with disabilities
Status: in_force

43-1184. Credit for contributions to school tuition organization; displaced students; students with disabilities

A. Beginning from and after June 30, 2009, 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 20-224.07 that exceed in the aggregate a combined total of $5,000,000 in any fiscal year through fiscal year 2020-2021.  Beginning in fiscal year 2021-2022, the aggregate dollar amount of the tax credits allowed is $6,000,000 in any fiscal year.

2. Shall preapprove tax credits under this section and section 20-224.07 subject to subsection D of this section.

3. Shall allow the tax credits under this section and section 20-224.07 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 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 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 43-1183 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 shall adopt rules necessary to administer this section.
A.R.S. § 43-923 — Arizona Code / Title 43 / Chapter 9 / Article 2 / Section 923
43-923 Change in tax rates
Status: in_force

43-923. Change in tax rates

If any rate of tax imposed by this title changes and if the taxable year includes the effective date of the change, unless that date is the first day of the taxable year, then:

1. Tentative taxes shall be computed by applying the rate for the period before the effective date of the change, and the rate for the period on and after such date, to the taxable income for the entire taxable year.

2. The tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of days in each period bears to the number of days in the entire taxable year.
A.R.S. § 43-222 — Arizona Code / Title 43 / Chapter 2 / Article 2 / Section 222
43-222 Income tax credit review schedule
Status: in_force

43-222. Income tax credit review schedule

The joint legislative income tax credit review committee shall review the following income tax credits:

1. For years ending in 0 and 5, sections 43-1079.01, 43-1088, 43-1089.04, 43-1167.01 and 43-1175.

2. For years ending in 1 and 6, sections 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1083, 43-1083.02, 43-1162, 43-1164.03 and 43-1183.

3. For years ending in 2 and 7, sections 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164 43-1165, and 43-1181.

4. For years ending in 3 and 8, sections 43-1074.01, 43-1168, 43-1170 and 43-1178.

5. For years ending in 4 and 9, sections 43-1073.01, 43-1081.01, 43-1083.03, 43-1084, 43-1164.04, 43-1164.05 and 43-1184.
A.R.S. § 43-322 — Arizona Code / Title 43 / Chapter 3 / Article 2 / Section 322
43-322 Signature presumed to be taxpayer's
Status: in_force

43-322. Signature presumed to be taxpayer's

The fact that an individual's name is signed to a return, statement or other document filed, or that the return, statement or document is signed, subscribed or verified in a manner prescribed by the department pursuant to section 42-1105, subsection B, shall be a presumption of fact that the return, statement or other document was actually signed by him.
A.R.S. § 43-1241 — Arizona Code / Title 43 / Chapter 12 / Article 4 / Section 1241
43-1241 Returns of unrelated business income
Status: in_force

43-1241. Returns of unrelated business income

Every organization, otherwise exempt under section 43-1201 but having unrelated business taxable income, shall:

1. File a return, verified by an executive officer under penalties of perjury in the form prescribed by the department on or before the fifteenth day of the fifth month after the close of the taxable year, reporting its income from such activities.

2. Pay a tax at the rates prescribed in section 43-1111 on its unrelated business taxable income as defined in section 43-1231.
A.R.S. § 43-721 — Arizona Code / Title 43 / Chapter 7 / Article 2 / Section 721
43-721 Immediate assessment upon bankruptcy or receivership
Status: in_force

43-721. Immediate assessment upon bankruptcy or receivership

Upon the adjudication of bankruptcy of any taxpayer in any bankruptcy proceeding or the appointment of a receiver for any taxpayer in any receivership proceeding before any court of the United States or of any state, any deficiency, interest, additional amounts or additions to the tax provided for by law determined by the department in respect of a tax imposed by this title upon the taxpayer may be immediately assessed.
A.R.S. § 43-619 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 619
43-619 Contribution to the spaying and neutering of animals fund
Status: in_force

43-619. Contribution to the spaying and neutering of animals fund

A. The department shall provide a space on the individual income tax return form in which a taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the spaying and neutering of animals fund established by section 28-2422.02.  The taxpayer may also donate any additional amount to the spaying and neutering of animals fund, in lieu of or in addition to the designated portion of the tax refund, by an appropriate indication on the return and by including that amount with the return.

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 or add to the liability owed by the taxpayer and transfer it to the companion animal spay and neuter committee established by section 28-2422.01 for deposit in the spaying and neutering of animals fund. The department shall determine the initial administrative cost of this section and report that amount to the companion animal spay and neuter committee, which shall transfer that amount to the state general fund.
A.R.S. § 43-1027 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1027
43-1027 Subtraction for wood stoves, wood fireplace or gas fired fireplaces; definitions
Status: in_force

43-1027. Subtraction for wood stoves, wood fireplace or gas fired fireplaces; definitions

A. For taxable years beginning from and after December 31, 1993, in computing Arizona adjusted gross income, a taxpayer may subtract from Arizona gross income an amount equal to the cost, exclusive of taxes, interest and other finance charges, but not more than five hundred dollars, for the conversion of an existing wood fireplace to a qualified wood stove, wood fireplace or gas fired fireplace and nonoptional equipment directly related to its operation on property that is located in this state.

B. For the purposes of this section:

1. "Permanently installed" means that the burner pan and associated equipment are affixed to the masonry or metal base of the fireplace.

2. "Qualified gas fired fireplace" means any of the following:

(a) Any device that burns natural or liquefied petroleum gas as its fuel through a burner system that is permanently installed in the fireplace.

(b) The conversion of an existing wood burning fireplace to noncombustible gas logs that are permanently installed in the fireplace.

3. "Qualified wood stove or wood fireplace" means any of the following:

(a) A residential wood heater that meets the standards of performance for new residential wood heaters manufactured on or after July 1, 1990 or sold at retail on or after July 1, 1992 pursuant to 40 Code of Federal Regulations part 60, subpart AAA.

(b) The conversion of an existing wood burning fireplace to a unit defined in subdivision (a) of this paragraph.
A.R.S. § 43-417 — Arizona Code / Title 43 / Chapter 4 / Article 2 / Section 417
43-417 Withholding without resort to legal action
Status: in_force

43-417. Withholding without resort to legal action

Any person required to withhold and transmit any amount pursuant to this chapter shall comply with the requirement without resort to any legal or equitable action in a court of law or equity.
A.R.S. § 43-1074.01 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1074.01
43-1074.01 Credit for increased research activities
Status: in_force

43-1074.01. Credit for increased research activities

A. A credit is allowed against the taxes imposed by this title in an amount determined pursuant to section 41 of the internal revenue code, except that:

1. The amount of the credit is based on the excess, if any, of the qualified research expenses for the taxable year over the base amount as defined in section 41(c) of the internal revenue code and is computed as follows:

(a) If the excess is $2,500,000 or less:

(i) For taxable years beginning before December 31, 2030, the credit is equal to twenty-four percent of that amount.

(ii) For taxable years beginning from and after December 31, 2030, the credit is equal to twenty percent of that amount.

(b) If the excess is over $2,500,000:

(i) For taxable years beginning before December 31, 2030, the credit is equal to $600,000 plus fifteen percent of any amount exceeding $2,500,000.

(ii) For taxable years beginning from and after December 31, 2030, the credit is equal to $500,000 plus eleven percent of any amount exceeding $2,500,000.

(c) For taxable years beginning from and after December 31, 2011, an additional credit amount is allowed if the taxpayer made basic research payments during the taxable year to a university under the jurisdiction of the Arizona board of regents. The additional credit amount is equal to ten percent of the excess, if any, of the basic research payments over the qualified organization base period amount for the taxable year. The department shall not allow credit amounts under this subdivision and section 43-1168, subsection A, paragraph 1, subdivision (d) that exceed, in the aggregate, a combined total of $10,000,000 in any calendar year. Subject to that limit, on application by the taxpayer, the department shall certify credit amounts under this subdivision and section 43-1168, subsection A, paragraph 1, subdivision (d) based on priority placement established by the date that the taxpayer filed the application. For taxable years beginning from and after December 31, 2014, any basic research payments used to determine the additional credit under this subdivision must first receive certification from the Arizona commerce authority pursuant to section 41-1507.01. The additional credit amount under this subdivision shall not exceed the amount allowed based on actual basic research payments or the department's certification, whichever is less. If an application, if certified in full, would exceed the $10,000,000 limit, the department shall certify only an amount within that limit. After the limit is attained, the department shall deny any subsequent applications regardless of whether other certified amounts are not actually claimed as a credit or other taxpayers fail to qualify to actually claim certified amounts.  Notwithstanding subsections B and C of this section, any amount of the additional credit under this subdivision that exceeds the taxes otherwise due under this title is not refundable, but may be carried forward to the next five consecutive taxable years. For the purposes of this subdivision, "basic research payments" and "qualified organization base period amount" have the same meanings prescribed by section 41(e) of the internal revenue code without regard to whether the taxpayer is or is not a corporation.

2. Qualified research includes only research conducted in this state, including research conducted at a university in this state and paid for by the taxpayer.

3. If two or more taxpayers, including partners in a partnership and shareholders of an S corporation, as defined in section 1361 of the internal revenue code, share in the eligible expenses, each taxpayer is eligible to receive a proportionate share of the credit.

4. The credit under this section applies only to expenses incurred from and after December 31, 2000.

5. The termination provisions of section 41 of the internal revenue code do not apply.

B. Except as provided by subsection C of this section, if the allowable credit under this section 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 credit that is claimed for taxable years beginning before January 1, 2022 and that is not used to offset taxes may be carried forward to the next fifteen consecutive taxable years and the amount of the credit that is claimed for taxable years beginning from and after December 31, 2021 and that is not used to offset taxes may be carried forward to the next ten consecutive taxable years. The amount of credit carryforward from taxable years beginning from and after December 31, 2002 that may be used in any taxable year may not exceed the taxpayer's tax liability under this title minus the credit under this section for the current taxable year's qualified research expenses. A taxpayer who carries forward any amount of credit under this subsection may not thereafter claim a refund of any amount of the credit under subsection C of this section.

C. For taxable years beginning from and after December 31, 2009, if a taxpayer who claims a credit under this section employs fewer than one hundred fifty persons in the taxpayer's trade or business and if the allowable credit under this section exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, in lieu of carrying the excess amount of credit forward to subsequent taxable years under subsection B of this section, the taxpayer may elect to receive a refund as follows:

1. The taxpayer must apply to the Arizona commerce authority for qualification for the refund pursuant to section 41-1507 and submit a copy of the authority's certificate of qualification to the department of revenue with the taxpayer's income tax return.

2. The amount of the refund is limited to seventy-five percent of the amount by which the allowable credit under this section exceeds the taxpayer's tax liability under this title for the taxable year.  The remainder of the excess amount of the credit is waived.

3. The refund shall be paid in the manner prescribed by section 42-1118.

4. The refund is subject to setoff under section 42-1122.

5. If the department determines that a credit refunded pursuant to this subsection is incorrect or invalid, the excess credit issued may be treated as a tax deficiency pursuant to section 42-1108.
A.R.S. § 43-1089.02 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1089.02
43-1089.02 Credit for donation of school site
Status: in_force

43-1089.02. Credit for donation of school site

A. A credit is allowed against the taxes imposed by this title in the amount of thirty percent of the value of real property and improvements donated by the taxpayer to a school district or a charter school for use as a school or as a site for the construction of a school.

B. To qualify for the credit:

1. The real property and improvements must be located in this state.

2. The real property and improvements must be conveyed unencumbered and in fee simple, except that:

(a) The conveyance must include as a deed restriction and protective covenant running with title to the land the requirement that as long as the donee holds title to the property the property shall be used only as a school or as a site for the construction of a school, subject to subsection I or J of this section.

(b) In the case of a donation to a charter school, the donor shall record a lien on the property as provided by subsection J, paragraph 3 of this section.

3. The conveyance shall not violate section 15-341, subsection D or section 15-183, subsection U.

C. For the purposes of this section, the value of the donated property is the property's fair market value as determined in an appraisal as defined in section 32-3601 that is conducted by an independent party and that is paid for by the donee.

D. If the property is donated by co-owners, including partners in a partnership and shareholders of an S corporation as defined in section 1361 of the internal revenue code, each donor may claim only the pro rata share of the allowable credit under this section based on the ownership interest. If the property is donated by a husband and wife who file separate returns for a taxable year in which they could have filed a joint return, they may determine between them the share of the credit each will claim.  The total of the credits allowed all co-owner donors may not exceed the allowable credit.

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

G. On written request by the donee, the donor shall disclose in writing to the donee the amount of the credit allowed pursuant to this section with respect to the property received by the donee.

H. A school district or charter school may refuse the donation of any property for purposes of this section.

I. If the donee is a school district:

1. The district shall notify the division of school facilities within the department of administration and furnish the division with any information the division requests regarding the donation. A school district shall not accept a donation pursuant to this section unless the division has reviewed the proposed donation and has issued a written determination that the real property and improvements are suitable as a school site or as a school. The division shall issue a determination that the real property and improvements are not suitable as a school site or as a school if the expenses that would be necessary to make the property suitable as a school site or as a school exceed the value of the proposed donation.

2. The district may sell any donated property pursuant to section 15-342, but the proceeds from the sale shall be used only for capital projects. The school facilities oversight board shall direct the division of school facilities within the department of administration to withhold an amount that corresponds to the amount of the proceeds from any monies that would otherwise be due the school district from the board pursuant to section 41-5741.

J. If the donee is a charter school:

1. The charter school shall:

(a) Immediately notify the sponsor of the charter school by certified mail and shall furnish the sponsor with any information requested by the sponsor regarding the donation during the ten-year period after the conveyance is recorded.

(b) Notify the sponsor by certified mail, and the sponsor shall notify the state treasurer, in the event of the charter school's financial failure or if the charter school:

(i) Fails to establish a charter school on the property within forty-eight months after the conveyance is recorded.

(ii) Fails to provide instruction to pupils on the property within forty-eight months after the conveyance is recorded.

(iii) Establishes a charter school on the property but subsequently ceases to operate the charter school on the property for twenty-four consecutive months or fails to provide instruction to pupils on the property for twenty-four consecutive months.

2. The charter school, or a successor in interest, shall pay to the state treasurer the amount of the credit allowed under this section, or if that amount is unknown, the amount of the allowable credit under this section, if any of the circumstances listed in paragraph 1, subdivision (b) of this subsection occurs.  If the amount is not paid within one year after the treasurer receives notice under paragraph 1, subdivision (b) of this subsection, a penalty and interest shall be added, determined pursuant to title 42, chapter 1, article 3.

3. A tax credit under this section constitutes a lien on the property, which the donor must record along with the title to the property to qualify for the credit.  The amount of the lien is the amount of the allowable credit under this section, adjusted according to the average change in the GDP price deflator, as defined in section 41-563, for each calendar year since the donation, but not exceeding twelve and one-half percent more than the allowable credit. The lien is subordinate to any liens securing the financing of the school construction. The lien is extinguished on the earliest of the following:

(a) Ten years after the lien is recorded. After that date, the charter school, or a successor in interest, may request the state treasurer to release the lien.

(b) On payment to the state treasurer by the donee charter school, or by a successor in interest, of the amount of the allowable credit under this section, either voluntarily or as required by paragraph 2 of this subsection. After the required amount is paid, the charter school or successor in interest may request the state treasurer to release the lien.

(c) On conveyance of fee simple title to the property to a school district.

(d) On enforcement and satisfaction of the lien pursuant to paragraph 4 of this subsection.

4. The state treasurer shall enforce the lien by foreclosure within one year after receiving notice of any of the circumstances described in paragraph 1, subdivision (b) of this subsection.

5. Subject to paragraphs 3 and 4 of this subsection, the charter school may sell any donated property.
A.R.S. § 43-622 — Arizona Code / Title 43 / Chapter 6 / Article 1 / Section 622
43-622 Contribution to sustainable state parks and roads fund
Status: in_force

43-622. Contribution to sustainable state parks and roads fund

A. The department shall provide a space on the individual income tax return form in which a taxpayer may designate an amount of the taxpayer's refund as a voluntary contribution to the sustainable state parks and roads fund established by section 41-511.17.

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 state parks board for deposit in the sustainable state parks and roads fund.

C. The taxpayer may also donate any amount to the sustainable state parks and roads fund, in lieu of or in addition to the designated portion of the tax refund, by an appropriate indication on the return and by including that amount with the return.
A.R.S. § 43-1093 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1093
43-1093 Nonresident beneficiary of estate or trust income
Status: in_force

43-1093. Nonresident beneficiary of estate or trust income

Income of estates and trusts distributed or distributable to nonresident beneficiaries is income from sources within this state only if distributed or distributable out of income of the estate or trust derived from sources within this state.
A.R.S. § 43-902 — Arizona Code / Title 43 / Chapter 9 / Article 1 / Section 902
43-902 Period in which deductions and credits to be taken
Status: in_force

43-902. Period in which deductions and credits to be taken

The deductions and credits provided for in this title shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the taxable income is computed, unless in order clearly to reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer whose taxable income is computed upon the basis of the accrual method of accounting, amounts except amounts includible in computing a partner's taxable income under section 43-1412, accrued as deductions and credits only by reason of the death of the taxpayer, shall not be allowed in computing taxable income for the period in which falls the date of the taxpayer's death.
A.R.S. § 43-1156 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1156
43-1156 Application for revival of corporate powers
Status: in_force

43-1156. Application for revival of corporate powers

A. Any taxpayer which has suffered the suspension or forfeiture provided for in section 43-1152 may be relieved therefrom upon making application in writing to the department and upon payment of the tax and the interest and penalties for nonpayment of which the suspension or forfeiture occurred, together with all other taxes, deficiencies, interest and penalties due under this title.

B. Application for such certificate on behalf of any domestic corporation as defined in section 10-140 which has suffered such suspension may be made by any stockholder or creditor or by a majority of the surviving trustees or directors thereof.

C. Application for such certificate may be made by any foreign corporation as defined in section 10-140 which has suffered such forfeiture or by any stockholder or creditor thereof.
A.R.S. § 43-1412 — Arizona Code / Title 43 / Chapter 14 / Article 2 / Section 1412
43-1412 Partner's distributive share
Status: in_force

43-1412. Partner's distributive share

In computing taxable income of each partner, he shall include, whether or not distribution is made to him, his distributive share of the partnership's:

1. Gains and losses from sales or exchanges of capital assets computed pursuant to the internal revenue code.

2. Gains and losses from sales or exchanges of property described in section 1231 of the internal revenue code, relating to certain property used in a trade or business and involuntary conversions.

3. Dividends with respect to which there is provided an exclusion under section 116 or a deduction under subtitle A, chapter 1, subchapter B, part VIII of the internal revenue code.

4. Income taxes imposed by and paid to another state or country.

5. Additional first year depreciation computed pursuant to section 179 of the internal revenue code.

6. Recoveries of bad debts, prior taxes and delinquency amounts pursuant to section 111 of the internal revenue code.

7. Gains and losses from wagering transactions pursuant to section 165(d) of the internal revenue code.

8. Soil and water conservation expenditures pursuant to section 175 of the internal revenue code.

9. Nonbusiness expenses as described in section 212 of the internal revenue code.

10. Expenses for care of certain dependents pursuant to section 214 of the internal revenue code.

11. Payments pursuant to section 215 of the internal revenue code.

12. Amounts representing taxes and interest paid to cooperative housing corporations pursuant to section 216 of the internal revenue code.

13. Intangible drilling and development costs pursuant to section 263(c) of the internal revenue code.

14. Certain mining exploration expenditures pursuant to section 617 of the internal revenue code.

15. Income, gain or loss to the partnership under section 751(b) of the internal revenue code.

16. Any items of income, gain, loss or deduction subject to a special allocation under the partnership agreement which differs from the allocation of partnership taxable income or loss generally.

17. Arizona taxable income.
A.R.S. § 43-504 — Arizona Code / Title 43 / Chapter 5 / Article 1 / Section 504
43-504 Tax payments made in advance
Status: in_force

43-504. Tax payments made in advance

Any taxpayer may elect to pay the tax prior to the date prescribed for its payment.
A.R.S. § 43-1147 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1147
43-1147 Situs of sales of other than tangible personal property; definitions
Status: in_force

43-1147. Situs of sales of other than tangible personal property; definitions

A. Except as provided by subsection B of this section, sales, other than sales of tangible personal property, are in this state if either of the following applies:

1. The income-producing activity is performed in this state.

2. The income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance.

B. For taxable years beginning from and after December 31, 2013, a multistate service provider may elect to treat sales from services as being in this state based on a combination of income-producing activity sales and market sales.  If the election under this subsection is made pursuant to subsection C of this section, the sales of services that are in this state shall be determined for taxable years beginning from and after:

1. December 31, 2013 through December 31, 2014, by the sum of the following:

(a) Eighty-five percent of the market sales.

(b) Fifteen percent of the income-producing activity sales.

2. December 31, 2014 through December 31, 2015, by the sum of the following:

(a) Ninety percent of the market sales.

(b) Ten percent of the income-producing activity sales.

3. December 31, 2015 through December 31, 2016, by the sum of the following:

(a) Ninety-five percent of the market sales.

(b) Five percent of the income-producing activity sales.

4. December 31, 2016, by one hundred percent of the market sales.

C. A multistate service provider may elect to treat sales from services as being in this state under subsection B of this section as follows:

1. The election must be made on the taxpayer's timely filed original income tax return.  The election is:

(a) Effective retroactively for the full taxable year of the income tax return on which the election is made.

(b) Binding on the taxpayer for at least five consecutive taxable years, regardless of whether the taxpayer no longer meets the percentage threshold of a multistate service provider during that time period, except as provided by paragraph 2 of this subsection.  To continue with the election after five consecutive taxable years, the taxpayer must meet the qualifications to be considered a multistate service provider and renew the election for another five consecutive taxable years.

2. During the election period, the election may be terminated as follows:

(a) Without the permission of the department on the acquisition or merger of the taxpayer.

(b) With the permission of the department before the expiration of five consecutive taxable years.

D. For a multistate service provider under subsection E, paragraph 3, subdivision (b) of this section, an election under subsection B of this section is limited to the treatment of sales for educational services.  For a multistate service provider under subsection E, paragraph 3, subdivision (c) of this section, an election under subsection B of this section is limited to the treatment of sales for support services, the payment for which is a percentage of the sales for educational services generated by a regionally accredited institution of higher education.

E. For the purposes of this section:

1. "Income-producing activity sales" means the total sales from services that are sales in this state under subsection A of this section.

2. "Market sales" means the total sales from services and sales of intangibles, as defined in paragraph 3, subdivision (a) of this subsection, for which the purchaser received the benefit of the service or intangibles in this state.

3. "Multistate service provider" means any of the following:

(a) A taxpayer that derives more than eighty-five percent of its sales from services or sales from intangibles provided to purchasers who receive the benefit of the service or intangibles outside this state in the taxable year of election, and includes all taxpayers required to file a combined report pursuant to section 43-942 and all members of an affiliated group included in a consolidated return pursuant to section 43-947. In calculating the eighty-five percent, sales to students receiving educational services at campuses physically located in this state shall be excluded from the calculation. For the purposes of this subdivision, "sales from intangibles" means sales derived from credit and charge card receivables, including fees, merchant discounts, interchanges, interest and related revenue.

(b) A taxpayer that is a regionally accredited institution of higher education with at least one university campus in this state that has more than two thousand students residing on the campus, and includes all taxpayers required to file a combined report pursuant to section 43-942 and all members of an affiliated group included in a consolidated return pursuant to section 43-947.

(c) A taxpayer that has more than two thousand employees in this state and that derives more than eighty-five percent of its sales from support services provided to a regionally accredited institution of higher education, and includes all taxpayers required to file a combined report pursuant to section 43-942 and all members of an affiliated group included in a consolidated return pursuant to section 43-947.

4. "Received the benefit of the service in this state" means the services are received by the purchaser in this state.  If the state where the services are received cannot be readily determined, the services are considered to be received at the home of the customer or, in the case of a business, the office of the customer from which the services were ordered in the regular course of the customer's trade or business.  If the ordering location cannot be determined, the services are considered to be received at the home or office of the customer to which the services were billed.  In the case of a multistate service provider under paragraph 3, subdivision (c) of this subsection, the benefit of support services shall be deemed received at the billing address of the student to which the services relate.

5. "Sales for educational services" means tuition and fees required for enrollment and fees required for courses of instruction, transcripts and graduation.
A.R.S. § 43-309 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 309
43-309 Joint returns of husband and wife
Status: in_force

43-309. Joint returns of husband and wife

If a husband and wife are required to file a return pursuant to section 43-301, they may file a joint return under the following conditions:

1. A joint return shall not be made if husband and wife have different taxable years. If such taxable years begin on the same day and end on different days because of the death of either or of both, the joint return may be made with respect to the taxable year of each. Such an exception does not apply if the surviving spouse remarried before the close of the surviving spouse's taxable year or if the taxable year of either spouse is a fractional part of a year under section 43-931.

2. In the case of the death of one or both spouses, the joint return with respect to the decedent may be made only by the decedent's executor or administrator, except that in the case of the death of one spouse the joint return may be made by the surviving spouse with respect to both the surviving spouse and the decedent if all of the following apply:

(a) A return for the taxable year has not been made by the decedent.

(b) An executor or administrator has not been appointed.

(c) An executor or administrator is not appointed before the last day prescribed by law for filing the return of the surviving spouse. If an executor or administrator of the decedent is appointed after the making of the joint return by the surviving spouse, the executor or administrator may disaffirm the joint return by making, within one year after the last day prescribed by law for filing the return of the surviving spouse, a separate return for the taxable year of the decedent with respect to which the joint return was made, in which case the return made by the survivor shall constitute the survivor's separate return.

3. For the purposes of this section, the status as husband and wife of two individuals having taxable years beginning on the same day shall be determined:

(a) If both have the same taxable year, as of the close of such year.

(b) If one dies before the close of the taxable year of the other, as of the time of such death.
A.R.S. § 43-1101 — Arizona Code / Title 43 / Chapter 11 / Article 1 / Section 1101
43-1101 Definitions
Status: in_force

43-1101. Definitions

In this chapter, unless the context otherwise requires:

1. "Arizona gross income" of a corporation means its federal taxable income for the taxable year.

2. "Arizona taxable income" of a corporation means its Arizona gross income adjusted by the modifications specified in article 3 of this chapter.

3. "Domestic corporation" means a corporation created or organized in the United States or under the laws of the United States or of any state of the United States or the District of Columbia.

4. "Federal taxable income" means the taxable income of a corporation computed pursuant to the internal revenue code.

5. "Foreign corporation" means any of the following:

(a) A corporation which is not a domestic corporation.

(b) A domestic corporation with less than twenty per cent of its property, payroll and sales in the United States for the three year period ending with the close of the taxable year of the corporation preceding the current taxable year, or for such part of that period as the corporation has been in existence.

(c) A domestic corporation that has derived eighty per cent or more of its federal gross income for the three year period immediately preceding the close of the taxable year, or for such part of that period as the corporation has been in existence, from sources in the Commonwealth of Puerto Rico or any other possession of the United States except the Virgin Islands if sixty per cent, for taxable years beginning in calendar year 1984, or sixty-five per cent, for taxable years beginning after calendar year 1984, or more of the domestic corporation's federal gross income for that period, or part of that period as the corporation has been in existence, was derived from the active conduct of a trade or business in the Commonwealth of Puerto Rico or any other possession of the United States except the Virgin Islands.

6. "Net income" means Arizona taxable income.

7. "Person" and "taxpayer" means a corporation.
A.R.S. § 43-1155 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1155
43-1155 Voidable contracts by corporations
Status: in_force

43-1155. Voidable contracts by corporations

Every contract made in violation of this article is voidable at the instance of any party other than the taxpayer.
A.R.S. § 43-1751 — Arizona Code / Title 43 / Chapter 17 / Article 6 / Section 1751
43-1751 Nonresidents
Status: in_force

43-1751. Nonresidents

Notwithstanding any other law, chapter 10, article 6 of this title applies in the case of nonresidents such that Arizona small business gross income includes only that portion of federal adjusted gross income that represents income from sources within this state.  All other provisions of chapter 10, article 6 of this title apply to the extent the provisions directly relate to Arizona small business gross income.
A.R.S. § 43-1168 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1168
43-1168 Credit for increased research activity
Status: in_force

43-1168. Credit for increased research activity

A. A credit is allowed against the taxes imposed by this title in an amount determined pursuant to section 41 of the internal revenue code, except that:

1. The amount of the credit is computed as follows:

(a) Add:

(i) The excess, if any, of the qualified research expenses for the taxable year over the base amount as defined in section 41(c) of the internal revenue code.

(ii) The basic research payments determined under section 41(e)(1)(A) of the internal revenue code.

(b) If the sum computed under subdivision (a) of this paragraph is $2,500,000 or less:

(i) For taxable years beginning before December 31, 2030, the credit is equal to twenty-four percent of that amount.

(ii) For taxable years beginning from and after December 31, 2030, the credit is equal to twenty percent of that amount.

(c) If the sum computed under subdivision (a) of this paragraph is over $2,500,000:

(i) For taxable years beginning before December 31, 2030, the credit is equal to $600,000 plus fifteen percent of any amount exceeding $2,500,000.

(ii) For taxable years beginning from and after December 31, 2030, the credit is equal to $500,000 plus eleven percent of any amount exceeding $2,500,000.

(d) For taxable years beginning from and after December 31, 2011, an additional credit amount is allowed if the taxpayer made basic research payments during the taxable year to a university under the jurisdiction of the Arizona board of regents. The additional credit amount is equal to ten percent of the excess, if any, of the basic research payments over the qualified organization base period amount for the taxable year. The department shall not allow credit amounts under this subdivision and section 43-1074.01, subsection A, paragraph 1, subdivision (c) that exceed, in the aggregate, a combined total of $10,000,000 in any calendar year. Subject to that limit, on application by the taxpayer, the department shall certify credit amounts under this subdivision and section 43-1074.01, subsection A, paragraph 1, subdivision (c) based on priority placement established by the date that the taxpayer filed the application.  For taxable years beginning from and after December 31, 2014, any basic research payments used to determine the additional credit under this subdivision must first receive certification from the Arizona commerce authority pursuant to section 41-1507.01. The additional credit amount under this subdivision shall not exceed the amount allowed based on actual basic research payments or the department's certification, whichever is less. If an application, if certified in full, would exceed the $10,000,000 limit, the department shall certify only an amount within that limit. After the limit is attained, the department shall deny any subsequent applications regardless of whether other certified amounts are not actually claimed as a credit or other taxpayers fail to qualify to actually claim certified amounts.  Notwithstanding subsections B and C of this section, any amount of the additional credit under this subdivision that exceeds the taxes otherwise due under this title is not refundable, but may be carried forward to the next five consecutive taxable years. For the purposes of this subdivision, "basic research payments" and "qualified organization base period amount" have the same meanings prescribed by section 41(e) of the internal revenue code.

2. Qualified research includes only research conducted in this state, including research conducted at a university in this state and paid for by the taxpayer.

3. If two or more taxpayers, including corporate partners in a partnership, share in the eligible expenses, each taxpayer is eligible to receive a proportionate share of the credit.

4. The credit under this section applies only to expenses incurred from and after December 31, 1993.

5. The termination provisions of section 41 of the internal revenue code do not apply.

B. Except as provided by subsection C of this section, if the allowable credit under this section 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 credit claimed for taxable years beginning before January 1, 2022 not used to offset taxes may be carried forward to the next fifteen consecutive taxable years, and the amount of the credit claimed for taxable years beginning from and after December 31, 2021 not used to offset taxes may be carried forward to the next ten consecutive taxable years. The amount of credit carryforward from taxable years beginning from and after December 31, 2002 that may be used under this subsection in any taxable year may not exceed the taxpayer's tax liability under this title minus the credit under this section for the current taxable year's qualified research expenses. A taxpayer that carries forward any amount of credit under this subsection may not thereafter claim a refund of any amount of the credit under subsection C of this section.

C. For taxable years beginning from and after December 31, 2009, if a taxpayer that claims a credit under this section employs fewer than one hundred fifty persons in the taxpayer's trade or business and if the allowable credit under this section exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, in lieu of carrying the excess amount of credit forward to subsequent taxable years under subsection B of this section, the taxpayer may elect to receive a refund as follows:

1. The taxpayer must apply to the Arizona commerce authority for qualification for the refund pursuant to section 41-1507 and submit a copy of the authority's certificate of qualification to the department of revenue with the taxpayer's income tax return.

2. The amount of the refund is limited to seventy-five percent of the amount by which the allowable credit under this section exceeds the taxpayer's tax liability under this title for the taxable year. The remainder of the excess amount of the credit is waived.

3. The refund shall be paid in the manner prescribed by section 42-1118.

4. The refund is subject to setoff under section 42-1122.

5. If the department determines that a credit refunded pursuant to this subsection is incorrect or invalid, the excess credit issued may be treated as a tax deficiency pursuant to section 42-1108.
A.R.S. § 43-1301 — Arizona Code / Title 43 / Chapter 13 / Article 1 / Section 1301
43-1301 Definitions; estates and trusts
Status: in_force

43-1301. Definitions; estates and trusts

In this chapter, unless the context otherwise requires:

1. "Arizona gross income" means:

(a) Of a nonresident estate or trust, the taxable income from sources within this state for the taxable year, computed according to the internal revenue code.

(b) Of a resident estate or trust, the taxable income for the taxable year, computed according to the internal revenue code.

2. "Arizona taxable income" of a resident or nonresident estate or trust means its Arizona gross income adjusted by the modifications specified in article 3 of this chapter.

3. "Nonresident estate or trust" means an estate or trust that is not a resident estate or trust.

4. "Resident estate" means the estate of a decedent who was a resident of this state at the time of death.

5. "Resident trust" means a trust of which the fiduciary is a resident of this state.  If a trust has more than one fiduciary, the trust is a resident trust if at least one of the fiduciaries is a resident of this state.  If a corporate fiduciary engaged in interstate trust administration is the sole fiduciary of a trust, or is a cofiduciary with a nonresident, the trust is a resident trust only if the corporate fiduciary conducts the administration of the trust in this state.
A.R.S. § 43-433 — Arizona Code / Title 43 / Chapter 4 / Article 3 / Section 433
43-433 Remedies for withheld taxes
Status: in_force

43-433. Remedies for withheld taxes

Any taxpayer from whom a tax is collected by withholding under this chapter is entitled to the remedies set forth in chapter 6 of this title.
A.R.S. § 43-1333 — Arizona Code / Title 43 / Chapter 13 / Article 3 / Section 1333
43-1333 Fiduciary adjustment; allocation of shares
Status: in_force

43-1333. Fiduciary adjustment; allocation of shares

A. The fiduciary adjustment for a resident estate or trust shall be the net amount of the additions and subtractions required by sections 43-1021 and 43-1022 including the addition required by section 43-1021, paragraph 1 or the subtraction required by section 43-1022, paragraph 3 if the estate or trust is a beneficiary of another estate or trust.

B. In the case of a nonresident estate or trust, the fiduciary adjustment shall be the net amount of the additions and subtractions required by sections 43-1021 and 43-1022 that are derived from or related to income from sources within this state.

C. The estate or trust and its beneficiaries shall apportion the fiduciary adjustment in the same proportion as their respective shares of federal distributable net income of the estate or trust.

D. If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary in the fiduciary adjustment shall be in proportion to the beneficiary's share of the estate or trust income for the year, under local law or terms of the instrument, that is required to be distributed currently and any other amounts of the income distributed in the year.  Any balance of the fiduciary adjustment shall be allocated to the estate or trust.

E. In the case of a nonresident beneficiary of an estate or trust, including a nonresident estate or trust that is a beneficiary of another estate or trust, the addition required by section 43-1021, paragraph 1 or the subtraction required by section 43-1022, paragraph 3 shall be limited to that portion of the beneficiary's share of the fiduciary adjustment that is derived from or related to income from sources within this state.
A.R.S. § 43-1029 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1029
43-1029 Restoration of a substantial amount held under claim of right; computation of tax
Status: in_force

43-1029. Restoration of a substantial amount held under claim of right; computation of tax

A. This section applies if:

1. An item of income was included in gross income for a prior taxable year or years because it appeared that the taxpayer had an unrestricted right to the item.

2. A deduction would be allowable under the internal revenue code or this title for the taxable year, without application of section 1341(b)(3) of the internal revenue code or section 43-1021, paragraph 9, because after the close of the prior taxable year or years it was established that the taxpayer did not have an unrestricted right to all or part of the item.

3. The amount of the deduction exceeds $3,000.

B. If all of the conditions in subsection A of this section apply, the tax imposed by this chapter for the taxable year is an amount equal to the tax for the taxable year computed without the deduction, minus the decrease in tax under this chapter for the prior taxable year or years that would result solely from excluding the item or portion of the item from gross income for the prior taxable year or years.

C. If the decrease in tax exceeds the tax imposed by this chapter for the taxable year, computed without the deduction, the excess is considered to be a payment of tax on the last day prescribed by law for the payment of tax for the taxable year and shall be refunded or credited in the same manner as if it were an overpayment for the taxable year.

D. Subsection B of this section does not apply to any deduction that is allowable with respect to an item that was included in gross income by reason of the sale or other disposition of stock in trade of the taxpayer, or other property of a kind that would properly have been included in the inventory of the taxpayer on hand at the close of the prior taxable year, or property that is held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business. This subsection does not apply if the deduction arises out of refunds or repayments with respect to rates made by a regulated public utility that is listed in section 7701(a)(33)(A) through (H) of the internal revenue code, if the refunds or repayments are:

1. Required to be made by the government, political subdivision, agency or instrumentality referred to in that section.

2. Required to be made by an order of a court.

3. Made in settlement of litigation or under threat or imminence of litigation.

E. If the exclusion under subsection B of this section results in:

1. A net operating loss for the prior taxable year or years for purposes of computing the decrease in tax for the prior year or years under subsection B of this section:

(a) The loss shall be:

(i) Carried over under this chapter to the same extent and in the same manner as was provided under prior law for taxable years beginning on or before December 31, 1989.

(ii) Carried back and carried over to the same extent and in the same manner as provided under section 172 of the internal revenue code for taxable years beginning from and after December 31, 1989.

(b) No carryover beyond the taxable year may be taken into account.

2. A capital loss for the prior taxable year or years, for purposes of computing the decrease in tax for the prior taxable year or years under subsection B of this section:

(a) The loss shall be carried back and carried over to the same extent and in the same manner as is provided under section 1212 of the internal revenue code.

(b) No carryover beyond the taxable year may be taken into account.

F. In computing Arizona taxable income for taxable years subsequent to the current taxable year, the net operating loss or capital loss determined in subsection E of this section shall be taken into account to the same extent and in the same manner as a net operating loss or capital loss sustained for prior taxable years.
A.R.S. § 43-311 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 311
43-311 Joint return after filing separate return
Status: in_force

43-311. Joint return after filing separate return

A. If an individual has filed a separate return for a taxable year for which the individual and spouse could have filed a joint return under section 43-309, and the time prescribed by this title for filing the return for such taxable year has expired, such individual and spouse may nevertheless make a joint return for such taxable year. A joint return filed by the husband and wife for such taxable year, and all payments, credits, refunds or other repayments made or allowed with respect to the separate return of either spouse for such taxable year, shall be taken into account in determining the extent to which the tax based upon the joint return has been paid.

B. A joint return may be made under subsection A of this section only if there is paid in full at or before the time of the filing of the joint return:

1. All amounts previously assessed with respect to either spouse for such taxable year.

2. All amounts shown as the tax by either spouse upon his or her separate return for such taxable year.

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

C. A joint return may not be made under subsection A of this section:

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

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

3. After either spouse has commenced a suit in any court for the recovery of any part of the tax for such taxable year.

4. After either spouse has entered into a closing agreement under section 42-1113, with respect to such taxable year.

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

E. If a joint return is 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 amount shown as the tax by the husband and wife on a joint return made under subsection A of this section exceeds the aggregate of the amounts shown as the tax upon the separate return of each spouse:

1. If any part of such excess is attributable to negligence or intentional disregard of rules and regulations, but without intent to defraud, at the time of the making of such separate return, then five per cent of the total amount of such excess 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 such separate 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, a joint return made under this section shall be deemed to have been filed:

1. Where both spouses filed separate returns prior to making the joint return, on the date the last separate return was filed, but not earlier than the last date prescribed by this title for filing the return of either spouse.

2. Where one spouse filed a separate return prior to the making of the joint return, and the other spouse had less than one thousand dollars of taxable income and less than five thousand dollars of gross income for such taxable year, on the date of the filing of such separate return, but not earlier than the last date prescribed by law for the filing of such separate return.

3. Where only one spouse filed a separate return prior to the making of a joint return and the other spouse had a taxable income of more than one thousand dollars or a gross income of more than five thousand dollars for such taxable year, on the date of the filing of such joint return.

H. For the purposes of section 42-1118, relating to refunds and credits, a joint return 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 to either spouse.

I. If a joint return is 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 return include one year immediately after the date of the filing of such joint return, 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 separate return filed by a spouse with respect to a taxable year for which a joint return is made under subsection A of this section after the filing of such separate return.
A.R.S. § 43-1124 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1124
43-1124 Americans with disabilities act access expenditures
Status: in_force

43-1124. Americans with disabilities act access expenditures

A. For taxable years beginning from and after December 31, 2017, in computing Arizona taxable income, a subtraction is allowed under section 43-1122, paragraph 21 for eligible business access expenditures paid or incurred by the taxpayer during the taxable year in order to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 by retrofitting developed real property that was originally placed in service at least ten years before the current taxable year.

B. For the purposes of this section, eligible business access expenditures include reasonable and necessary amounts paid or incurred to:

1. Remove any barriers that prevent a business from being accessible to or usable by individuals with disabilities.

2. Provide qualified interpreters or other methods of making audio materials available to hearing-impaired individuals.

3. Provide qualified readers, taped texts and other effective methods of making visually delivered materials available to individuals with visual impairments.

4. Acquire or modify equipment or devices for individuals with disabilities.

5. Provide other similar services, modifications, materials or equipment.

C. A taxpayer that has been cited for noncompliance with the Americans with disabilities act of 1990 or title 41, chapter 9, article 8 by either federal or state enforcement officials is ineligible for a subtraction under this section for any expenditure required to cure the cited violation.
A.R.S. § 43-406 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 406
43-406 Extension of withholding to premature withdrawals of state and local government retirement contributions
Status: in_force

43-406. Extension of withholding to premature withdrawals of state and local government retirement contributions

For the purposes of this title and except for eligible rollover distributions transferred to an eligible retirement plan pursuant to section 401(a)(31) of the internal revenue code, amounts withdrawn from the state retirement system, the elected officials' retirement plan or a county or city retirement plan by an employee upon termination of employment prior to retirement shall be treated as if the withdrawn amounts are payment of wages by an employer to an employee and shall be subject to withholding. The amount withheld by the retirement plan or system at the time of withdrawal shall be equal to five per cent of the total amount withdrawn.
A.R.S. § 43-567 — Arizona Code / Title 43 / Chapter 5 / Article 5 / Section 567
43-567 Lien for tax on trust income
Status: in_force

43-567. Lien for tax on trust income

A. Upon the recording of an abstract of judgment or a copy thereof by the department with the county recorder of any county for any taxes, interest and penalties due from the grantor of the trust on income of the trust which is taxable to the grantor under chapter 13 of this title, and upon its giving notice of the recording to the fiduciary or fiduciaries of the trust, the amount of the taxes, interest and penalties constitute a lien upon all property of the trust in the county owned by the trust and any property acquired before the expiration of the lien. The lien has the force, effect and priority of a judgment lien.

B. The notice required to be given by subsection A of this section may be served upon the fiduciary personally or by mail. If made by mail, service shall be made by registered mail and shall be addressed to the fiduciary at his address as it appears in the records of the department.
A.R.S. § 43-405 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 405
43-405 Extension of withholding to gambling winnings
Status: in_force

43-405. Extension of withholding to gambling winnings

A. For the purposes of this title, payments of prize winnings that are subject to federal withholding pursuant to section 1441 or section 3402(q) of the internal revenue code by any of the following shall be treated as if they were payments of wages by an employer to employees for a payroll period:

1. The Arizona state lottery commission under title 5, chapter 5.1.

2. A permittee conducting horse or dog racing under title 5, chapter 1.

3. A fantasy sports contest operator under title 5, chapter 10.

4. An event wagering operator under title 5, chapter 11.

B. The entities listed in subsection A of this section shall deduct and withhold from each payment of prize winnings made to an individual an amount equal to the highest tax rate prescribed by section 43-1011.
A.R.S. § 43-202 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 202
43-202 Object of tax
Status: in_force

43-202. Object of tax

The object for which the taxes are imposed by this title is to assist in defraying the cost of maintenance of the state government and to lessen the burden in this regard resting upon tangible property. All taxes collected under the provisions of this title shall be used, together with revenue from other sources, to pay appropriations for the maintenance of the state government.
A.R.S. § 43-724 — Arizona Code / Title 43 / Chapter 7 / Article 2 / Section 724
43-724 Collection of tax in case of bankruptcy or receivership
Status: in_force

43-724. Collection of tax in case of bankruptcy or receivership

Upon notice and demand from the department after termination of the bankruptcy or receivership proceeding, the taxpayer shall pay any portion of the claim allowed in the proceeding which is unpaid. Such unpaid amount may be collected in the manner provided in this title for the collection of delinquent taxes at any time within six years after the termination of the proceeding.
A.R.S. § 43-1084 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1084
43-1084 Credit for agricultural water conservation system
Status: in_force

43-1084. Credit for agricultural water conservation system

A. A credit is allowed against the taxes imposed by this title for expenses that the taxpayer incurred during the taxable year to purchase and install an agricultural water conservation system in this state. The amount of the credit is equal to seventy-five percent of the qualifying expenses.

B. To qualify for the credit under this section:

1. The agricultural water conservation system must be primarily designed to substantially conserve water on land that is used by the taxpayer or the taxpayer's tenant to:

(a) Produce crops, fruits or other agricultural products.

(b) Raise, harvest or grow trees.

(c) Sustain livestock.

2. The expense must be consistent with a conservation plan that the taxpayer has filed with the United States department of agriculture, natural resources conservation service, or a natural resource conservation district in this state established pursuant to title 41, chapter 58.

C. Co-owners of the land on which the water conservation system is installed, 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 may not exceed the amount that would have been allowed a sole owner.

D. 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.

E. The credit allowed by this section is in lieu of any deduction for such expenses allowed by the internal revenue code and included under section 43-1042 in computing taxable income.
A.R.S. § 43-241 — Arizona Code / Title 43 / Chapter 2 / Article 3 / Section 241
43-241 Time for performance of acts; definition
Status: in_force

43-241. Time for performance of acts; definition

A. Notwithstanding any other provision of this title or title 1, if the last day for performing any act under this title falls on a Saturday, Sunday or legal holiday, the act is considered timely if it is performed on the next day that is not a Saturday, Sunday or legal holiday.

B. For the purposes of this section "legal holiday" shall include holidays specified in section 1-301 and holidays determined by the United States secretary of the treasury for the purposes of section 7503 of the internal revenue code.
A.R.S. § 43-381 — Arizona Code / Title 43 / Chapter 3 / Article 5 / Section 381
43-381 Confidentiality of information if returns prepared by person other than taxpayer; violation; classification
Status: in_force

43-381. Confidentiality of information if returns prepared by person other than taxpayer; violation; classification

A. Except as otherwise provided in section 42-2003 and excluding authorized agents of the department and of the United States internal revenue service, a person who prepares at the request of a taxpayer any report or return required under this title or who receives information from such taxpayer in order to prepare any such report or return shall not disclose to any other person in any manner except by the express permission of the taxpayer any of the information received from such taxpayer.

B. Any disclosure or use of such information other than in preparing such report or return in violation of this section is a class 1 misdemeanor.
A.R.S. § 43-505 — Arizona Code / Title 43 / Chapter 5 / Article 1 / Section 505
43-505 Tax payments made to department; order of crediting
Status: in_force

43-505. Tax payments made to department; order of crediting

A. The tax and any interest and penalties shall be paid to the department. Remittances may be in the form of a check payable to the department during such time and under such regulations as the director may prescribe. If a check is not paid by the bank on which it is drawn, the taxpayer tendering the check shall remain liable for the payment of the tax and all interest and penalties as if he had not tendered the check.

B. The department shall credit payments against a taxpayer's unpaid tax liability before crediting payments against any interest or penalties.
A.R.S. § 43-1202 — Arizona Code / Title 43 / Chapter 12 / Article 1 / Section 1202
43-1202 Feeder organizations not exempt from tax; definition
Status: in_force

43-1202. Feeder organizations not exempt from tax; definition

A. An organization that is operated for the primary purpose of carrying on a trade or business for profit is not exempt under any provision of this chapter on the ground that all of its profits are payable to one or more organizations exempt under this section from taxation.

B. For the purposes of this section, "trade or business" has the same meaning prescribed in section 502 of the internal revenue code and regulations adopted pursuant to that section.
A.R.S. § 43-1028 — Arizona Code / Title 43 / Chapter 10 / Article 3 / Section 1028
43-1028 Sale of virtual currency or non-fungible tokens; calculation of gain or loss; gas fees; subtraction; definitions
Status: in_force

43-1028. Sale of virtual currency or non-fungible tokens; calculation of gain or loss; gas fees; subtraction; definitions

A. If a taxpayer has included in Arizona gross income a gain or loss on the sale of virtual currency or a non-fungible token and in calculating the gain or loss the taxpayer did not include in the basis of the virtual currency or non-fungible token any gas fees paid on the purchase of the virtual currency or non-fungible token or did not otherwise deduct these gas fees in determining Arizona gross income, the taxpayer may subtract the amount of the gas fees from Arizona gross income.

B. For the purposes of this section:

1. "Foreign currency" means the coin and paper money of a country other than the United States that is designated as legal tender, circulates and is customarily used and accepted as a medium of exchange in the country of issuance.

2. "Gas fee" means a fee paid to the operator of a virtual network for the use of the network to facilitate the purchase, sale or exchange of virtual currency or a non-fungible token.

3. "Non-fungible token" means a non-fungible cryptographic asset on a blockchain that possesses unique identifiers or other metadata that distinguishes the asset from another token or asset in a manner that makes the asset irreplaceable and nonexchangeable for a similar token or asset.

4. "Virtual currency" means a digital representation of value that functions as a medium of exchange, a unit of account and a store of value other than a representation of the United States dollar or a foreign currency.
A.R.S. § 43-1604 — Arizona Code / Title 43 / Chapter 16 / Article 1 / Section 1604
43-1604 Annual report; posting
Status: in_force

43-1604. 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 43-1089 and 43-1089.03:

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) Money being held for identified students' scholarships and tuition grants in future years.

6. The cost of audits pursuant to section 43-1605 paid during the fiscal year.

7. The 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. § 43-1073.01 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1073.01
43-1073.01 Dependent tax credit
Status: in_force

43-1073.01. Dependent tax credit

A. A credit is allowed against the taxes imposed by this title for a taxable year for each dependent of a taxpayer as provided by this section.

B. For taxpayers whose federal adjusted gross income is less than $200,000 for a taxpayer who is a single person, a married person filing separately or a head of household or is less than $400,000 for a married couple filing a joint return, the amount of the credit is:

1. $100 for each dependent who is under seventeen years of age at the end of the taxable year.

2. $25 for each dependent who is at least seventeen years of age at the end of the taxable year.

C. For taxpayers whose federal adjusted gross income is $200,000 or more for a taxpayer who is a single person, a married person filing separately or a head of household or is $400,000 or more for a married couple filing a joint return, the amount of the credit is:

1. $100 minus five percent for each $1,000, or fraction thereof, by which the taxpayer's federal adjusted gross income exceeds the applicable threshold provided in this subsection for each dependent who is under seventeen years of age at the end of the taxable year.

2. $25 minus five percent for each $1,000, or fraction thereof, by which the taxpayer's federal adjusted gross income exceeds the applicable threshold provided in this subsection for each dependent who is at least seventeen years of age at the end of the taxable year.

D. In the case of a nonresident or part-year resident taxpayer, the credit allowed under this section is allowed in the percentage that the taxpayer's Arizona gross income is of the federal adjusted gross income.
A.R.S. § 43-1079.01 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1079.01
43-1079.01 Credit for employing national guard members
Status: in_force

43-1079.01. 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 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 may not exceed the amount that would have been allowed a sole owner.
A.R.S. § 43-1161 — Arizona Code / Title 43 / Chapter 11 / Article 6 / Section 1161
43-1161 Credit for new employment
Status: in_force

43-1161. 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 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 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. § 43-1601 — Arizona Code / Title 43 / Chapter 16 / Article 1 / Section 1601
43-1601 Definitions
Status: in_force

43-1601. 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. "Fiscal year" means the fiscal year of the state as prescribed in section 35-102.

3. "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.

4. "Students with disabilities" means students who have any of the following conditions:

(a) Hearing impairment.

(b) Visual impairment.

(c) Developmental delay.

(d) Preschool severe delay.

(e) Speech/language impairment.
A.R.S. § 43-206 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 206
43-206 Urban revenue sharing fund; allocation; distribution; withholding
Status: in_force

43-206. Urban revenue sharing fund; allocation; distribution; withholding

A. The urban revenue sharing fund is established.  Through fiscal year 2022-2023, the fund consists of an amount equal to fifteen percent of the net proceeds of the state income taxes for the fiscal year two years preceding the current fiscal year.  Beginning in fiscal year 2023-2024, the fund consists of an amount equal to eighteen percent of the net proceeds of the state income taxes for the fiscal year two years preceding the current fiscal year.  The fund shall be distributed to incorporated cities and towns as provided in this section, except that a city or town shall receive at least an amount equal to what a city or town with a population of fifteen hundred or more persons would receive. The transfer of net proceeds prescribed by section 49-282, subsection B does not affect the calculation of net proceeds prescribed by this subsection.

B. Each city or town shall share in the urban revenue sharing fund in the proportion that the population of each bears to the population of all. Except as provided by sections 42-5033 and 42-5033.01, the population of a city or town as determined by the most recent United States decennial census plus any revisions to the decennial census certified by the United States bureau of the census shall be used as the basis for apportioning monies pursuant to this subsection.

C. The treasurer, on instruction from the department, shall transmit, not later than the tenth day of each month, to each city or town an amount equal to one-twelfth of that city's or town's total entitlement for the current fiscal year from the urban revenue sharing fund as determined by the department.

D. A newly incorporated city or town shall share in the urban revenue sharing fund beginning the first month of the first full fiscal year following incorporation.

E. On receipt of a certificate of default from the greater Arizona development authority pursuant to section 41-2257 or 41-2258, the state treasurer, to the extent not otherwise expressly prohibited by law, shall withhold from the next succeeding distribution of monies pursuant to this section due to the city or town the amount specified in the certificate of default and immediately deposit the amount withheld in the greater Arizona development authority revolving fund.  The state treasurer shall continue to withhold and deposit the monies until the authority certifies to the state treasurer that the default has been cured. The state treasurer may not withhold any amount that is necessary, as certified by the defaulting political subdivision to the state treasurer and the authority, to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued before the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to this section.

F. Except as otherwise provided by this subsection, on notice from the attorney general pursuant to section 41-194.01, subsection B, paragraph 1 that an ordinance, regulation, order or other official action adopted or taken by the governing body of a city or town violates state law or the Constitution of Arizona, the state treasurer shall withhold the distribution of monies pursuant to this section to the affected city or town and shall continue to withhold monies pursuant to this subsection until the attorney general certifies to the state treasurer that the violation has been resolved. The state treasurer shall redistribute the monies withheld pursuant to this subsection among all other cities and towns in proportion to their population as provided by subsection B of this section. The state treasurer shall not withhold any amount that the city or town certifies to the attorney general and the state treasurer as being necessary to make any required deposits or payments for debt service on bonds or other long-term obligations of the city or town that were issued or incurred before committing the violation.
A.R.S. § 43-722 — Arizona Code / Title 43 / Chapter 7 / Article 2 / Section 722
43-722 Notice of bankruptcy or receivership to department
Status: in_force

43-722. Notice of bankruptcy or receivership to department

The trustee in bankruptcy or receiver shall give notice in writing to the department of the adjudication of bankruptcy or the appointment of the receiver. The running of the statute of limitations on the making of assessments shall be suspended for the period from the date of adjudication in bankruptcy or the appointment of the receiver to a date thirty days after the date upon which the notice from the trustee or receiver is received by the department but in no case shall the suspension be for a period in excess of two years.
A.R.S. § 43-1001 — Arizona Code / Title 43 / Chapter 10 / Article 1 / Section 1001
43-1001 Definitions
Status: in_force

43-1001. Definitions

In this chapter, unless the context otherwise requires:

1. "Arizona adjusted gross income" of a resident individual means the individual's Arizona gross income subject to modifications specified in sections 43-1021 and 43-1022.

2. "Arizona gross income" of a resident individual means the individual's federal adjusted gross income for the taxable year, computed pursuant to the internal revenue code.

3. "Dependent" has the same meaning prescribed by section 152 of the internal revenue code.

4. "Federal adjusted gross income" of a resident individual means the individual's adjusted gross income computed pursuant to the internal revenue code.

5. "Head of household" has the same meaning prescribed by sections 2(b) and 2(c) of the internal revenue code. Head of household includes an individual who meets the qualifications of a surviving spouse under section 2(a) of the internal revenue code.

6. "Married person" means a married person on the last day of the taxable year subject to the rules in section 43-1002.

7. "Net income" means taxable income.

8. "Person" means an individual.

9. "Single person" means any person who is not married or who was legally separated on the last day of the person's taxable year.

10. "Spouse" means the wife or husband of the taxpayer.

11. "Taxable income" of a resident individual means Arizona adjusted gross income less the deductions allowed in article 4 of this chapter.

12. "Taxpayer" means any person who is subject to a tax imposed by this chapter.
A.R.S. § 43-242 — Arizona Code / Title 43 / Chapter 2 / Article 3 / Section 242
43-242 Change of taxpayer organization; nontaxable event
Status: in_force

43-242. Change of taxpayer organization; nontaxable event

Notwithstanding any provision of the internal revenue code or any federal rule or regulation adopted pursuant to the internal revenue code, a change in the organizational structure of a corporation, including an S corporation, or a limited liability company, a partnership or any other entity, however organized, into another organizational structure is not a taxable event for the purposes of this title if there is no change among the owners, their ownership interests or the assets of the organization.
A.R.S. § 43-208 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 208
43-208 Administration and enforcement
Status: in_force

43-208. Administration and enforcement

The department shall administer and enforce this title. In addition to the administrative provisions of this title, title 42, chapter 1, article 3, including the civil and criminal penalties prescribed by sections 42-1125 and 42-1127, applies to this title.
A.R.S. § 43-1153 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1153
43-1153 Certificate of suspension of a corporation
Status: in_force

43-1153. Certificate of suspension of a corporation

The department shall transmit the name of any corporation delinquent pursuant to section 43-1152 to the corporation commission, and the prescribed suspension or forfeiture shall become effective immediately and the certificate of the corporation commission shall be prima facie evidence of such suspension or forfeiture.
A.R.S. § 43-1078 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1078
43-1078 Credit for Arizona small business excess credit amount
Status: in_force

43-1078. Credit for Arizona small business excess credit amount

A. A credit is allowed against the taxes imposed by this chapter in an amount that is equal to the excess amount determined pursuant to section 43-1742.

B. If any portion of the allowable credit exceeds the taxes due under this chapter or if there are no taxes due under this chapter, the amount of the credit not used to offset the taxes under this chapter may be carried forward as a credit under section 43-1742 to the following taxable year as a credit that is first available to offset the tax due under chapter 17 of this title.
A.R.S. § 43-1146 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1146
43-1146 Situs of sales of tangible personal property
Status: in_force

43-1146. Situs of sales of tangible personal property

Sales of tangible personal property are considered to be in this state if the property is delivered or shipped to a purchaser, other than the United States government, within this state regardless of the F.O.B. point or other conditions of the sale.
A.R.S. § 43-1366 — Arizona Code / Title 43 / Chapter 13 / Article 5 / Section 1366
43-1366 Notice of fiduciary relationship
Status: in_force

43-1366. Notice of fiduciary relationship

On giving notice to the department, any person acting in a fiduciary capacity shall assume the duties, rights and privileges of a taxpayer with respect to any tax imposed by this title.  A person assumes these fiduciary duties until the person gives notice to the department that the fiduciary capacity is terminated.
A.R.S. § 43-1382 — Arizona Code / Title 43 / Chapter 13 / Article 6 / Section 1382
43-1382 Credit for entity-level income tax
Status: in_force

43-1382. 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. The estate or trust and its noncorporate beneficiaries shall apportion the credit under this section in the same proportion as their respective shares of the federal distributable net income of the estate or trust from the partnership or S corporation. The noncorporate beneficiaries shall treat their share of the credit under this section as a credit under section 43-1077.

D. If the allowable credit exceeds the taxes due under this title on the claimant's income, or if there are not taxes due under this title, the amount of the claim not used to offset taxes due 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. § 43-221 — Arizona Code / Title 43 / Chapter 2 / Article 2 / Section 221
43-221 Joint legislative income tax credit review committee; report
Status: repealed

43-221. Joint legislative income tax credit review committee; report

A. The joint legislative income tax credit review committee is established consisting of the following members:

1. Five members of the house of representatives ways and means committee appointed by the speaker of the house of representatives.  Not more than three appointees shall be of the same political party.

2. Five members of the senate finance committee appointed by the president of the senate.  Not more than three appointees shall be of the same political party.

B. The committee shall determine the original purpose of existing tax credits and establish a standard for evaluating and measuring the success or failure of the tax credits. The standard for evaluating tax credits may include:

1. The history, rationale and estimated revenue impact of the credit.

2. Whether the credit has provided a benefit to this state including, for corporate tax credits, measurable economic development, new investments, creation of new jobs or retention of existing jobs in this state.

3. Whether the credit is unnecessarily complex in the application, administration and approval process.

C. The committee shall review the individual and corporate income tax credits pursuant to the schedule prescribed in section 43-222. The committee shall use the joint legislative budget committee staff and may use the staff of the department of revenue and legislative council for assistance.

D. After completing the review process, the committee shall determine whether the credit should be amended, repealed or retained.  If the credit is recommended to be retained or amended, the committee shall recommend that the credit be returned to the income tax credit review schedule prescribed in section 43-222.  The next review year shall be the fifth full calendar year following the date the credit was reviewed. The committee shall report its findings and recommendations to the president of the senate, the speaker of the house of representatives and the governor by December 15 of the year that the committee reviews the credit.  The committee shall provide a copy of the report to the secretary of state.
A.R.S. § 43-1505 — Arizona Code / Title 43 / Chapter 15 / Article 1 / Section 1505
43-1505 Special provisions; corporate donations for displaced students and students with disabilities; definition
Status: in_force

43-1505. Special provisions; corporate donations for displaced students and students with disabilities; definition

A. A school tuition organization that receives contributions for the purposes of section 20-224.07 or 43-1184 must use at least ninety per cent of those contributions to provide educational scholarships or tuition grants to qualified students.

B. The amount of an educational scholarship or a tuition grant that is issued by a school tuition organization under this section shall not exceed the cost of tuition for the student to attend the qualified school or ninety per cent of the amount of state aid that otherwise would be computed for the student as provided in title 15, chapter 9, article 5, whichever is less.  On request from a school tuition organization, the department of education shall provide to the school tuition organization in a timely manner the amount computed for the student under this subsection that represents the ninety per cent limitation prescribed in this subsection.

C. 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.

D. Qualified students who receive an educational scholarship or tuition grant under this section shall be allowed to attend any qualified school of their custodians' choice.

E. For the purposes of this section, "qualified student" means a student, including a student who previously qualified for an educational scholarship or tuition grant under this section and continues to attend a qualified school, who has been either:

1. 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.

2. Identified as having a disability under section 504 of the rehabilitation act (29 United States Code section 794) or identified at any time by a school district as a child with a disability as defined in section 15-761 or a child with a disability who is eligible to receive services from a school district under section 15-763.
A.R.S. § 43-432 — Arizona Code / Title 43 / Chapter 4 / Article 3 / Section 432
43-432 Refund for excess withholding
Status: in_force

43-432. Refund for excess withholding

A. When the total amount withheld under section 43-401 exceeds the amount of the tax on the employee's entire taxable income as computed under this title, the department shall, after auditing the annual return filed by the employee in accordance with chapter 3 of this title, and without requiring a filing of a refund claim as provided in section 42-1106, subsection A, refund the amount of the excess withheld, subject to setoff for debts pursuant to section 42-1122. Failure of the department to make such refund shall not limit the right of the taxpayer to file a claim for a refund as provided in chapter 6, article 1 of this title. If the excess tax withheld is less than one dollar, no refund shall be made unless specifically requested by the taxpayer at the time such return is filed. In no event shall any excess be allowed as a credit against any tax accruing on a return filed for a year subsequent to the year during which such excess was withheld, the provisions of chapter 6 of this title notwithstanding.

B. The department may make separate refunds of withheld taxes upon request by a husband or wife who has filed a joint return, the refund payable to each spouse being proportioned to the gross earnings of each shown by the information returns filed by the employer or otherwise shown to the satisfaction of the department. If a taxpayer entitled to a refund under this subsection dies, the department may certify to the department of administration that the refund be made to the taxpayer's duly appointed executor, administrator or personal representative.
A.R.S. § 43-302 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 302
43-302 Arizona small business income tax return; election; revocation
Status: in_force

43-302. Arizona small business income tax return; election; revocation

A. For taxable years beginning from and after December 31, 2020, a small business taxpayer may elect to file a return for the taxable year with the department to report that small business taxpayer's share of Arizona small business gross income. The election shall be made separately for each taxable year and is effective by reporting Arizona small business adjusted gross income on a timely filed Arizona small business income tax return.

B. The election under subsection A of this section may be revoked on a timely filed amended Arizona small business income tax return and a corresponding Arizona individual income tax return.
A.R.S. § 43-943 — Arizona Code / Title 43 / Chapter 9 / Article 4 / Section 943
43-943 Allocation in the case of husband and wife
Status: in_force

43-943. Allocation in the case of husband and wife

If husband and wife file separate returns, the department may distribute, apportion or allocate gross income between the spouses, if it is determined that such distribution, apportionment or allocation is necessary in order to reflect the proper income of the spouses.
A.R.S. § 43-945 — Arizona Code / Title 43 / Chapter 9 / Article 4 / Section 945
43-945 Allocation of exemptions for blind persons and persons over sixty-five years of age
Status: in_force

43-945. Allocation of exemptions for blind persons and persons over sixty-five years of age

In the case of a return made for a fractional part of the year, the exemptions allowed under section 43-1023 shall be reduced respectively to an amount that bears the same ratio to the full exemptions provided as the number of months in the period for which the return is made bears to twelve months.
A.R.S. § 43-1151 — Arizona Code / Title 43 / Chapter 11 / Article 5 / Section 1151
43-1151 Tax clearance upon cessation of corporate activities
Status: in_force

43-1151. Tax clearance upon cessation of corporate activities

A. No decree of involuntary dissolution shall be made, entered or filed by any court or court clerk nor shall the corporation commission file any such decree or any document by which the term of existence of any corporation shall be voluntarily reduced or terminated or any certificate of the surrender by a foreign corporation as defined in section 10-140 of its right to do business in this state unless the taxpayer obtains from the department and files with the court, clerk or corporation commission a certificate to the effect that the department is satisfied from the available evidence that all taxes imposed by this title have been paid or are secured by bond, deposit or otherwise.

B. Within thirty days after receiving a request for a certificate, the department shall either issue the certificate or notify the person requesting the certificate of the amount of tax that must be paid or the amount of bond, deposit or other security that must be furnished as a condition of issuing the certificate.

C. The issuance of the certificate shall not relieve the corporation or any individual from liability for any taxes, penalties or interest imposed by this title.
A.R.S. § 43-416 — Arizona Code / Title 43 / Chapter 4 / Article 2 / Section 416
43-416 Failure to remit withholding; classification
Status: in_force

43-416. Failure to remit withholding; classification

Any employer entrusted with or having in his control any tax required to be collected or withheld and constituting a "special fund in trust for this state" pursuant to section 43-415, who fraudulently appropriates, or secretes with a fraudulent intent to appropriate, to any use or purpose not in the due and lawful execution of the trust, pursuant to this article or any portion is guilty of a class 4 felony.
A.R.S. § 43-1149 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1149
43-1149 Interpretation
Status: in_force

43-1149. Interpretation

This article shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.
A.R.S. § 43-1125 — Arizona Code / Title 43 / Chapter 11 / Article 3 / Section 1125
43-1125 Domestic international sales corporation
Status: in_force

43-1125. Domestic international sales corporation

A domestic international sales corporation, commonly referred to as "disc", as defined in section 992 of the internal revenue code shall be taxed pursuant to the provisions of this chapter without regard to the provisions of sections 991 through 996 of the internal revenue code.
A.R.S. § 43-1315 — Arizona Code / Title 43 / Chapter 13 / Article 2 / Section 1315
43-1315 Liability of beneficiaries for trust taxes
Status: in_force

43-1315. Liability of beneficiaries for trust taxes

If for any reason the taxes imposed on income of a trust are not paid when due and remain unpaid when such income is distributable to the beneficiaries, or if the income is distributable to the beneficiaries before the taxes are due and the taxes are not paid when due, such income shall be taxable to the beneficiaries when distributable to them, except that in the case of nonresident beneficiaries such income shall be taxable only to the extent it is derived from sources within this state.
A.R.S. § 43-501 — Arizona Code / Title 43 / Chapter 5 / Article 1 / Section 501
43-501 When taxes are payable
Status: in_force

43-501. When taxes are payable

The tax imposed under this title shall be paid on the fifteenth day of April following the close of the calendar year or, if the return is made on the basis of a fiscal year, on the fifteenth day of the fourth month following the close of the fiscal year, except that:

1. For an S corporation the tax imposed shall be paid on the fifteenth day of the third month following the close of the taxable year.

2. For unrelated business taxable income of a tax exempt organization the tax imposed shall be paid on the fifteenth day of the fifth month following the close of the taxable year.
A.R.S. § 43-108 — Arizona Code / Title 43 / Chapter 1 / Article 1 / Section 108
43-108 Subtraction from gross income; ordinary and necessary expenses; marijuana establishments and marijuana testing facilities; definitions
Status: in_force

43-108. Subtraction from gross income; ordinary and necessary expenses; marijuana establishments and marijuana testing facilities; definitions

(Caution:  1998 Prop. 105 applies)

A. Notwithstanding any other law, in computing Arizona adjusted gross income or Arizona taxable income for a taxpayer, all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business as a marijuana establishment, marijuana testing facility, or dual licensee that elects to operate on a for-profit basis pursuant to title 36, chapter 28.2 shall be subtracted from Arizona gross income to the extent not already excluded from Arizona gross income.

B. For the purposes of this section, "dual licensee," "marijuana establishment," and "marijuana testing facility" have the same meanings prescribed in section 36-2850.
A.R.S. § 43-1363 — Arizona Code / Title 43 / Chapter 13 / Article 5 / Section 1363
43-1363 Effect of certificate
Status: in_force

43-1363. Effect of certificate

The certificate of the department shall not relieve the estate for which the fiduciary acts of liability for any taxes which may become due from the decedent or estate under this title after the issuance of the certificate. It also shall not relieve the fiduciary of the liability imposed by section 43-1364.
A.R.S. § 43-408 — Arizona Code / Title 43 / Chapter 4 / Article 1 / Section 408
43-408 Voluntary withholding on out-of-state wages
Status: in_force

43-408. Voluntary withholding on out-of-state wages

A. If a resident of this state is employed outside the state, the person may request the employer to withhold taxes pursuant to this article on wages earned for the services performed outside the state.

B. If the employee and employer agree to the voluntary withholding of tax, in a manner prescribed by the department, the employee and employer are subject to this chapter as if the employer were required to withhold taxes.
A.R.S. § 43-223 — Arizona Code / Title 43 / Chapter 2 / Article 2 / Section 223
43-223 Requirements for new income tax credits established by the legislature
Status: in_force

43-223. Requirements for new income tax credits established by the legislature

Any new individual or corporate income tax credit that is enacted by the legislature shall include in its enabling legislation:

1. A specific review year for the joint legislative income tax credit review committee to review the credit.  The specific review year shall be the fifth full calendar year following the date the credit is enacted.

2. A purpose clause that explains the rationale and objective of the tax credit.
A.R.S. § 43-1731 — Arizona Code / Title 43 / Chapter 17 / Article 4 / Section 1731
43-1731 Deductions
Status: in_force

43-1731. Deductions

Deductions other than those deductions already reflected in the net amounts reported on the federal schedules prescribed in section 43-1701 may not be taken against Arizona small business adjusted gross income in computing Arizona small business taxable income.
A.R.S. § 43-413 — Arizona Code / Title 43 / Chapter 4 / Article 2 / Section 413
43-413 Statement of withholding to employees
Status: in_force

43-413. Statement of withholding to employees

The employer, within thirty-one days after the end of each calendar year, shall furnish each employee with either a statement of the amount withheld during the previous tax year, showing the gross earnings and the amount of tax withheld or, if the termination of employment is before the end of the year, within fifteen days after the termination of employment, a summary statement showing the total earnings for the tax year and the amount of taxes withheld from compensation.
A.R.S. § 43-952 — Arizona Code / Title 43 / Chapter 9 / Article 5 / Section 952
43-952 Liability of transferee of assets
Status: in_force

43-952. Liability of transferee of assets

A. The amounts of the following liabilities, except as hereinafter provided in this section and section 43-953, shall be assessed, collected and paid in the same manner and subject to the same provisions and limitations as in the case of a deficiency in a tax imposed by this title, including the provisions in the case of a delinquency in payment after notice and demand, the provisions authorizing proceeding in court for collection and the provisions prohibiting claims and suits for refunds:

1. The liability, at law or in equity, of a transferee of property of a taxpayer, in respect of the tax, including interest, additional amounts and additions to the tax provided by law, imposed upon the taxpayer by this title.

2. The liability of a fiduciary under this title, in respect of the payment of any such tax from the estate of the taxpayer.

B. Any such liability may be either as to the amount of tax shown on the return or as to any deficiency in tax.
A.R.S. § 43-1145 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1145
43-1145 Sales factor
Status: in_force

43-1145. Sales factor

The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period other than sales of 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. § 43-1083 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1083
43-1083 Credit for solar energy devices
Status: in_force

43-1083. Credit for solar energy devices

A. A credit is allowed against the taxes imposed by this title for each resident who is not a dependent of another taxpayer for installing a solar energy device, as defined in section 42-5001, during the taxable year in the taxpayer's residence located in this state. The credit is equal to twenty-five percent of the cost of the device.

B. The maximum credit in a taxable year may not exceed one thousand dollars. The person who provides the solar energy device shall furnish the taxpayer with an accounting of the cost to the taxpayer. A taxpayer may claim the credit under this section only once in a tax year and may not cumulate over different tax years tax credits under this section exceeding, in the aggregate, one thousand dollars for the same residence.

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 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. 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. The credit allowed under this section is in lieu of any allowance for state tax purposes for exhaustion, wear and tear of the solar energy device under section 167 of the internal revenue code.

F. To qualify for the credit under this section the solar energy device and its installation shall meet the requirements of title 44, chapter 11, article 11.

G. A solar hot water heater plumbing stub out that was installed by the builder of a house or dwelling unit before title was conveyed to the taxpayer does not qualify for a credit under this section.
A.R.S. § 43-244 — Arizona Code / Title 43 / Chapter 2 / Article 3 / Section 244
43-244 State general fund revenue notification; tax rate adjustment
Status: in_force

43-244. 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 43-1311, subsection B, paragraph 3 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 43-1311, subsection B, paragraph 3 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 43-1311, subsection B, paragraph 4 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. § 43-1085 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1085
43-1085 Credit for solar energy devices; commercial and industrial applications
Status: in_force

43-1085. 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 who 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 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 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. § 43-201 — Arizona Code / Title 43 / Chapter 2 / Article 1 / Section 201
43-201 Preemption by state of income taxation
Status: in_force

43-201. Preemption by state of income taxation

The area of income taxation is preempted by the state, and a county, city, town or other political subdivision of this state shall not levy an income tax, so long as the urban revenue sharing fund is maintained as provided in section 43-206.
A.R.S. § 43-961 — Arizona Code / Title 43 / Chapter 9 / Article 6 / Section 961
43-961 Items not deductible in computation of taxable income
Status: in_force

43-961. Items not deductible in computation of taxable income

In computing taxable income no deduction shall in any case be allowed in respect of:

1. Personal, living or family expenses, except medical expenses allowed pursuant to section 43-1042.

2. With respect to financial institutions, as defined in section 6-101, that portion of any amount otherwise allowable as an interest expense deduction pursuant to the internal revenue code and determined by dividing the total of the amount of interest income received on obligations of the United States, this state or any political subdivision of this state by the sum of tax exempt interest as defined in section 103 of the internal revenue code plus gross income determined pursuant to the internal revenue code, and by multiplying the result thus obtained by any interest deduction allowed pursuant to section 163 or 591 of the internal revenue code without regard to the application of section 265 of the internal revenue code, and by adding to such result an amount equal to ten per cent of the total of the amount of interest income received on obligations of the United States, this state or any political subdivision of this state. The total amount disallowed by operation of this paragraph shall be reduced to the extent such disallowance would cause the tax payable by the financial institution under this title to exceed the total of gross income determined pursuant to the internal revenue code, plus 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, less the amount of interest income received on obligations of the United States.

3. Any amount paid or accrued on indebtedness incurred or continued to purchase a single premium life insurance or endowment contract. For the purposes of this paragraph, if substantially all the premiums of a life insurance or endowment contract are paid within a period of four years from the date on which such contract is purchased, such contract shall be considered a single premium life insurance or endowment contract.

4. Expenses attributable to Arizona gross income derived from illegal activities nor shall any deductions be allowed to any taxpayer on any of his Arizona gross income derived from any other activities which tend to promote or to further, or are connected or associated with, such illegal activities.

5. Any amount, not otherwise provided for by this section, that would otherwise be allowable as a deduction or an adjustment, which is allocable to one or more classes of income, whether or not any amount of income of that class or classes is received or accrued, and that is not required to be included in a person's Arizona adjusted gross income or Arizona taxable income.
A.R.S. § 43-1098 — Arizona Code / Title 43 / Chapter 10 / Article 6 / Section 1098
43-1098 Apportionment of exemptions
Status: in_force

43-1098. Apportionment of exemptions

A. Any resident taxpayer, other than an active member of the armed forces of the United States or any other auxiliary branch, who commences or terminates residency in this state during any one taxable year shall prorate the exemptions provided in section 43-1023 for blind persons and for persons sixty-five years of age or older on the basis of the proportion that the taxpayer's total Arizona gross income bears to federal adjusted gross income.

B. The percentage of the exemption allowed is computed by dividing the taxpayer's Arizona gross income by the federal adjusted gross income.
A.R.S. § 43-1212 — Arizona Code / Title 43 / Chapter 12 / Article 2 / Section 1212
43-1212 Denial of exempt status due to prohibited transactions; restoration of exempt status
Status: in_force

43-1212. Denial of exempt status due to prohibited transactions; restoration of exempt status

A. An organization that is denied exemption from federal income tax for engaging in prohibited transactions as provided by section 503 of the internal revenue code is also denied exemption under section 43-1201. The denial applies to taxable years after the taxable year during which the organization is notified by the department or by the United States internal revenue service that it has engaged in a prohibited transaction, unless the organization entered into the prohibited transaction with the purpose of diverting corpus or income of the organization from its exempt purposes and the transaction involved a substantial part of the corpus or income of the organization.

B. An organization that is denied an exemption pursuant to subsection A of this section with respect to any taxable year following the taxable year in which the notice was received may have its exempt status under section 43-1201 restored at the same time the organization's exempt status is restored for federal income tax purposes under section 503 of the internal revenue code.
A.R.S. § 43-103 — Arizona Code / Title 43 / Chapter 1 / Article 1 / Section 103
43-103 Effective date
Status: in_force

43-103. Effective date

The provisions of this act shall apply only to taxable years beginning after December 31, 1978.
A.R.S. § 43-1081.01 — Arizona Code / Title 43 / Chapter 10 / Article 5 / Section 1081.01
43-1081.01 Credit for agricultural pollution control equipment
Status: in_force

43-1081.01. Credit for agricultural pollution control equipment

A. A credit is allowed against the taxes imposed by this title for expenses that a taxpayer, involved in the commercial production of livestock, livestock products or agricultural, horticultural, viticultural or floricultural crops or products, incurred during the taxable year to purchase tangible personal property that is primarily used in the taxpayer's trade or business in this state to control or prevent pollution. The amount of the credit is equal to twenty-five percent of the cost of the real or personal property. The maximum credit that a taxpayer may claim under this section is $25,000 in a taxable year.

B. Property that qualifies for the credit under this section includes the 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 to prevent, monitor, control or reduce air, water or land pollution.

C. 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.

D. Co-owners of a business, including individual 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.

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 amount of the claim not used to offset the taxes under this title may be carried forward to the next five consecutive taxable years as a credit against subsequent years' income tax liability.
A.R.S. § 43-305 — Arizona Code / Title 43 / Chapter 3 / Article 1 / Section 305
43-305 Fiduciary returns; two or more fiduciaries
Status: in_force

43-305. Fiduciary returns; two or more fiduciaries

Under such rules and regulations as the department may prescribe, a return filed by one of two or more joint fiduciaries is sufficient. The fiduciary filing the return shall state:

1. That he has sufficient knowledge of the affairs of the taxpayer for whom the return is made to enable him to make the return.

2. That the return is, to the best of his knowledge and belief, true and correct.
A.R.S. § 43-1132 — Arizona Code / Title 43 / Chapter 11 / Article 4 / Section 1132
43-1132 Taxpayers liable; exceptions to allocation and apportionment; examination of evidence of income and expenses
Status: in_force

43-1132. Taxpayers liable; exceptions to allocation and apportionment; examination of evidence of income and expenses

A. Any taxpayer having income from business activity which is taxable both within and without this state shall allocate and apportion net income as provided in this article, but net income of a foreign corporation which is not itself subject to the tax imposed by this title shall not be allocated or apportioned to this state.

B. For the purposes of computing Arizona taxable income under this title, expenses which are attributable to income of a foreign corporation which is not itself subject to the tax imposed by this title shall not be allocated or apportioned to this state.

C. In the case of an audit performed on a taxpayer by the department, the department may examine any books, papers, records or memoranda of the taxpayer relating to income and expenses of the taxpayer both within and without the United States.  The information provided by the taxpayer is subject to title 42, chapter 2, article 1.

D. Subsections A and B of this section do not apply to a taxpayer that has elected to file a consolidated return pursuant to section 43-947.  An Arizona affiliated group, as defined in section 43-947, that has income from business activity that is taxable both in and outside this state shall allocate and apportion its net income as provided by this article.

E. The net income of a taxpayer that would otherwise meet the requirements of 15 United States Code sections 381 through 384 but that is subject to the tax imposed by this title solely because of the presence of consignment inventory in this state shall not be allocated or apportioned to this state if all of the following conditions are met:

1. The presence of the consignment inventory is a requirement of the taxpayer's contract with its customer.

2. The consignment inventory is located on the customer's property.