reglab/statecodes huggingface dataset:
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 5 - BUSINESS AND NONBUSINESS INCOME › Section R15-2D-505 - Dividends

Current through Register Vol. 30, No. 28, July 12, 2024
Dividends are business income if the stock with respect to
					 which the taxpayer receives dividends arises out of or was acquired in the
					 regular course of the taxpayer's trade or business operations or if the purpose
					 for acquiring and holding the stock is related to or incidental to the trade or
					 business operations.
Example 1: The taxpayer operates a multistate chain of
					 stock brokerage houses. During the year, the taxpayer receives dividends on
					 stock that it owns. The dividends are business income.
Example 2: The taxpayer is engaged in a multistate
					 manufacturing and wholesaling business. In connection with that business, the
					 taxpayer maintains special accounts to cover items such as worker's
					 compensation claims, rain and storm damage, and machinery replacement. A
					 portion of the moneys in those accounts is invested in interest-bearing bonds.
					 The remainder is invested in various common stocks listed on national stock
					 exchanges. Both the interest income and any dividends are business
					 income.
Example 3: The taxpayer and several unrelated corporations
					 own all of the stock of a corporation whose business operations consist solely
					 of acquiring and processing materials for delivery to the corporate owners. The
					 taxpayer acquired the stock to obtain a source of supply of materials used in
					 its manufacturing business. The dividends are business income.
Example 4: The taxpayer is engaged in a multistate heavy
					 construction business. Much of its construction work is performed for agencies
					 of the federal government and various state governments. Under state and
					 federal laws applicable to contracts for these agencies, a contractor must have
					 adequate bonding capacity, as measured by the ratio of its current assets (cash
					 and marketable securities) to current liabilities. To maintain an adequate
					 bonding capacity, the taxpayer holds various stocks and interest-bearing
					 securities. Both the interest income and any dividends received are business
					 income.
Example 5: The taxpayer receives dividends from the stock
					 of its subsidiary or affiliate, which acts as the marketing agency for products
					 manufactured by the taxpayer. The dividends are business income.
Example 6: The taxpayer is engaged in a multistate glass
					 manufacturing business. It also holds a portfolio of stock and interest-bearing
					 securities, the acquisition and holding of which are unrelated to the
					 manufacturing business. The dividends and interest income received are
					 nonbusiness income.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 5 - BUSINESS AND NONBUSINESS INCOME › Section R15-2D-506 - Royalties

Current through Register Vol. 30, No. 28, July 12, 2024
Patent and copyright royalties are business income if the
					 patent or copyright with respect to which the taxpayer receives royalties
					 arises out of or is created in the regular course of the taxpayer's trade or
					 business operations or if the purpose for acquiring and holding the patent or
					 copyright is related to the trade or business operations. Other royalties and
					 licensing fees are business income if the property or licensing agreement that
					 generates the income arises out of or is created in the regular course of the
					 taxpayer's trade or business operations or if the purpose for acquiring and
					 holding the property or license agreement is related to or incidental to the
					 trade or business operations.
Example 1: The taxpayer is engaged in the multistate
					 business of manufacturing and selling industrial chemicals. In connection with
					 that business the taxpayer obtained patents on certain of its products. The
					 taxpayer licensed the production of the chemicals in foreign countries, in
					 return for which the taxpayer receives royalties. The royalties received by the
					 taxpayer are business income.
Example 2: The taxpayer is engaged in the music publishing
					 business and holds copyrights on numerous songs. The taxpayer acquires the
					 assets of a smaller publishing company, including music copyrights. The
					 taxpayer later uses these acquired copyrights in its business. Any royalties
					 received on these copyrights are business income.
Example 3: The same as example two, except that the
					 acquired company also held the patent on a type of phonograph needle. The
					 taxpayer does not manufacture or sell phonographs or phonograph equipment. Any
					 royalties received on the patent are nonbusiness income.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 5 - BUSINESS AND NONBUSINESS INCOME › Section R15-2D-507 - Proration of Deductions

Current through Register Vol. 30, No. 28, July 12, 2024
In most cases an allowable deduction of a taxpayer will be
					 applicable only to the business income arising from a particular trade or
					 business or to a particular item of nonbusiness income. In some cases an
					 allowable deduction may apply to the business incomes of more than one trade or
					 business or to several items of nonbusiness income. In these cases the
					 deduction shall be prorated among the trades or businesses and the items of
					 nonbusiness income in a manner that fairly distributes the deduction among the
					 classes of income to which it applies.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 5 - BUSINESS AND NONBUSINESS INCOME › Section R15-2D-508 - Consistency and Uniformity in Reporting

Current through Register Vol. 30, No. 28, July 12, 2024
A. If a taxpayer departs from or modifies the
				  manner in which income has been classified as business income or nonbusiness
				  income, or the manner of prorating any related deduction, in Arizona returns
				  for prior years, the taxpayer shall disclose in the return for the current year
				  the nature and extent of the modification.
B. If the returns or reports filed by a
				  taxpayer for all states to which the taxpayer reports under the Uniform
				  Division of Income for Tax Purposes Act are not uniform in the classification
				  of income as business or nonbusiness income, or the application or proration of
				  any related deduction, the taxpayer shall disclose the nature and extent of the
				  variance upon request by the Department.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 6 - PROPERTY FACTOR › Section R15-2D-601 - General

Current through Register Vol. 30, No. 28, July 12, 2024
A. The property
				  factor, as defined in A.R.S. §
										43-1140, for each
				  trade or business of a taxpayer includes all real and tangible personal
				  property owned or rented by the taxpayer and used during the tax period in the
				  regular course of the trade or business. The term "real and tangible personal
				  property" includes land, buildings, machinery, stocks of goods, equipment, but
				  does not include coin or currency.
B. A taxpayer shall exclude from the property
				  factor property used in connection with the production of nonbusiness
				  income.
C. Property used both in
				  the regular course of a taxpayer's trade or business and in the production of
				  nonbusiness income is included in the property factor only to the extent the
				  property is used in the regular course of the taxpayer's trade or business. The
				  method of determining that portion of the value to be included in the property
				  factor will depend upon the facts of each case.
D. The property factor includes the average
				  value of property includable in the factor.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 6 - PROPERTY FACTOR › Section R15-2D-602 - Property Used for the Production of Business Income

Current through Register Vol. 30, No. 28, July 12, 2024
A. A taxpayer shall include in the property
				  factor property that is used, available for use, or capable of being used
				  during the tax period in the regular course of the taxpayer's trade or
				  business.
B. A taxpayer shall
				  include in the property factor property held as reserves or standby facilities
				  or property held as a reserve source of materials. For example, a plant
				  temporarily idle or raw material reserves not currently being processed are
				  includable in the factor.
C. A
				  taxpayer shall exclude from the property factor property or equipment under
				  construction during the tax period, except inventoriable goods in process,
				  until the property or equipment is used in the regular course of the taxpayer's
				  trade or business. If the property or equipment is partially used in the
				  regular course of the taxpayer's trade or business while under construction,
				  the value of the property to the extent used shall be included in the property
				  factor.
D. Property used in the
				  regular course of the trade or business of the taxpayer remains in the property
				  factor until its permanent withdrawal is established by an identifiable event
				  such as its conversion to the production of nonbusiness income, its sale, or
				  the lapse of an extended period of time (normally, five years) during which the
				  property is held for sale.
Example 1: The taxpayer closes its manufacturing plant in
					 State X and holds the property for sale. The property remains vacant until its
					 sale one year later. The value of the manufacturing plant is included in the
					 property factor until the plant is sold.
Example 2: Same as example one except that the property is
					 rented until the plant is sold. The plant is included in the property factor
					 until the plant is sold.
Example 3: The taxpayer closes its manufacturing plant and
					 leases the building under a five-year lease. The plant is included in the
					 property factor until the lease begins.
Example 4: The taxpayer operates a chain of retail grocery
					 stores. Taxpayer closes Store A, which is then remodeled into three small
					 retail stores such as a dress shop, dry cleaning, and barber shop, which are
					 leased to unrelated parties. The property is removed from the property factor
					 on the date the remodeling of Store A begins.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 6 - PROPERTY FACTOR › Section R15-2D-603 - Property Factor Numerator

Current through Register Vol. 30, No. 28, July 12, 2024
The numerator of the property factor is the average value
					 of the real and tangible personal property owned or rented by a taxpayer and
					 used in this state during the tax period in the regular course of the
					 taxpayer's trade or business.
1.
				  Property in transit between locations of the taxpayer to which it belongs is
				  considered to be at its destination for purposes of the property
				  factor.
2. Property in transit
				  between a buyer and seller that is included by a taxpayer in the denominator of
				  its property factor in accordance with its regular accounting practices is
				  included in the numerator according to the state of destination.
3. The value of mobile or movable property
				  such as construction equipment, trucks, or leased electronic equipment that is
				  located within and without this state during the tax period is determined for
				  purposes of the numerator of the property factor on the basis of total time
				  within the state during the tax period.
4. An automobile assigned to a traveling
				  employee is included in the numerator of the property factor of the state to
				  which the employee's compensation is assigned under the payroll factor or in
				  the numerator of the property factor of the state in which the automobile is
				  licensed.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 6 - PROPERTY FACTOR › Section R15-2D-606 - Averaging of Monthly Property Values

Current through Register Vol. 30, No. 28, July 12, 2024
The Department may require or allow averaging of monthly
					 values if that method is required to properly reflect the average value of a
					 taxpayer's property for the tax period. The Department shall not require the
					 averaging of monthly values if that method has a de minimis effect on a
					 taxpayer's Arizona tax liability for the tax period.
1. Averaging of monthly values will generally
				  be required if substantial fluctuations in the values of the property exist
				  during the tax period or if property is acquired after the beginning of the tax
				  period or disposed of before the end of the tax period.
Example: The monthly value of the taxpayer's property is as
					 follows:
January
$2,000
July
$15,000
February
$2,000
August
$17,000
March
$3,000
September
$23,000
April
$3,500
October
$25,000
May
$4,500
November
$13,000
June
$10,000
December
$2,000
Subtotal
$25,000
Subtotal
$95,000
Total
$120,000
The average monthly value of the taxpayer's property
					 includable in the property factor for the income year is $10,000 (120,000
					 divided by 12).
2. Rented
				  property is averaged by determining the net annual rental rate of the
				  property.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 6 - PROPERTY FACTOR › Section R15-2D-607 - Consistency and Uniformity in Reporting

Current through Register Vol. 30, No. 28, July 12, 2024
A. If a taxpayer departs from or modifies the
				  manner of valuing property, or of excluding or including property in the
				  property factor, used in Arizona returns for prior years, the taxpayer shall
				  disclose in the return for the current year the nature and extent of the
				  modification.
B. If the returns or
				  reports filed by a taxpayer with all states to which the taxpayer reports under
				  the Uniform Division of Income for Tax Purposes Act are not uniform in the
				  valuation of property or in the exclusion or inclusion of property in the
				  property factor, the taxpayer shall disclose the nature and extent of the
				  variance upon request by the Department.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 7 - PAYROLL FACTOR › Section R15-2D-701 - General

Current through Register Vol. 30, No. 28, July 12, 2024
A. The payroll
				  factor, as defined in A.R.S. §
										43-1143, for each
				  trade or business of a taxpayer includes the total amount paid by the taxpayer
				  in the regular course of its trade or business for compensation during the tax
				  period.
1. The total amount "paid" to
				  employees is determined upon the basis of the taxpayer's accounting method.
a. If the taxpayer has adopted the accrual
				  method of accounting, all compensation properly accrued is deemed to have been
				  paid.
b. Notwithstanding the
				  taxpayer's method of accounting, compensation paid to employees may, at the
				  election of the taxpayer, be included in the payroll factor by use of the cash
				  method if the taxpayer is required to report the compensation under that method
				  for unemployment compensation purposes.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 7 - PAYROLL FACTOR › Section R15-2D-702 - Payroll Factor Denominator

Current through Register Vol. 30, No. 28, July 12, 2024
The denominator of the payroll factor is the total
					 compensation paid by the taxpayer everywhere during the tax period. Therefore,
					 compensation paid to employees whose services are performed entirely in a state
					 where the taxpayer is immune from taxation is included in the denominator of
					 the payroll factor.
Example: A taxpayer has employees in its state of legal
					 domicile (State A) and is taxable in State B. In addition, the taxpayer has
					 other employees whose services are performed entirely in State C where the
					 taxpayer is immune from taxation under the provisions of Public Law 86-272. The
					 compensation paid to the employees in State C is assigned to State C where the
					 services are performed (included in the denominator but not the numerator of
					 the payroll factor) even though the taxpayer is not taxable in State
					 C.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 7 - PAYROLL FACTOR › Section R15-2D-703 - Payroll Factor Numerator

Current through Register Vol. 30, No. 28, July 12, 2024
The numerator of the payroll factor is the total
					 compensation paid in this state during the tax period by the taxpayer for
					 compensation. The tests in A.R.S. §
										43-1144
					 for determining whether compensation is paid in this state are derived from the
					 Model Unemployment Compensation Act. Accordingly, if the taxpayer includes
					 compensation paid to employees in the payroll factor by use of the cash method
					 of accounting or if the taxpayer is required to report the compensation under
					 this method for unemployment compensation purposes, the Department shall
					 presume that the total wages reported by the taxpayer to this state for
					 unemployment compensation purposes constitute compensation paid in this state
					 except for compensation excluded under this Article. The presumption may be
					 overcome by evidence satisfactory to the Department that an employee's
					 compensation is not properly reportable to this state for unemployment
					 compensation purposes.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 7 - PAYROLL FACTOR › Section R15-2D-704 - Compensation Paid in This State: Definitions

Current through Register Vol. 30, No. 28, July 12, 2024
For the purpose of determining whether compensation is paid
					 in this state under this Article and A.R.S. §
										43-1144,
					 the following definitions apply:
1.
				  "Incidental" means any service that is temporary or transitory in nature or
				  rendered in connection with an isolated transaction.
2. "Place from which the service is directed
				  or controlled" means the site from which the power to direct or control is
				  exercised by the taxpayer.
3. "Base
				  of operations" means the site of more or less permanent nature from which the
				  employee starts work and to which the employee customarily returns in order to:
a. Receive instructions from the
				  taxpayer,
b. Receive communications
				  from the taxpayer's customers or other persons,
c. Replenish stock or other
				  materials,
d. Repair equipment,
				  or
e. Perform any other functions
				  necessary to the exercise of the trade or profession.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 7 - PAYROLL FACTOR › Section R15-2D-705 - Consistency and Uniformity in Reporting

Current through Register Vol. 30, No. 28, July 12, 2024
A. If the taxpayer departs from or modifies
				  the treatment of compensation paid used in Arizona returns for prior years, the
				  taxpayer shall disclose in the return for the current year the nature and
				  extent of the modification.
B. If
				  the returns or reports filed by a taxpayer with all states to which the
				  taxpayer reports under the Uniform Division of Income for Tax Purposes Act are
				  not uniform in the treatment of compensation paid, the taxpayer shall disclose
				  the nature and extent of the variance upon request by the Department.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-801 - General

Current through Register Vol. 30, No. 28, July 12, 2024
A. The following
				  are provisions for determining "sales" under A.R.S. §
										43-1145:
1. In the case of a taxpayer engaged in
				  manufacturing and selling or purchasing and reselling goods or products,
				  "sales" includes all gross receipts from the sales of the goods or products (or
				  other property of a kind that would properly be included in the inventory of
				  the taxpayer if on hand at the close of the tax period) held by the taxpayer
				  primarily for sale to customers in the ordinary course of its trade or
				  business. For purposes of this subsection, "gross receipts" means gross sales
				  less returns and allowances and includes all interest income, service charges,
				  carrying charges, or time-price differential charges incidental to the sales.
				  Federal and state excise taxes (including sales taxes) are included as part of
				  the receipts if the taxes are passed on to the buyer or included as part of the
				  selling price of the product.
2. In
				  the case of cost-plus-fixed-fee contracts, such as the operation of a
				  government-owned plant for a fee, "sales" includes the entire reimbursed cost
				  plus the fee.
3. In the case of a
				  taxpayer engaged in providing services, such as the operation of an advertising
				  agency or the performance of equipment service contracts or research and
				  development contracts, "sales" includes the gross receipts from the performance
				  of the services including fees, commissions, and similar items.
4. In the case of a taxpayer engaged in
				  renting or licensing the use of real or tangible property, "sales" includes the
				  gross receipts from these activities.
5. In the case of a taxpayer engaged in the
				  sale, assignment, or licensing the use of intangible personal property such as
				  patents and copyrights, "sales" includes the gross receipts from these
				  activities.
6. If a taxpayer
				  derives receipts from the sale of equipment used in its business, those
				  receipts constitute "sales." For example, a truck express company owns a fleet
				  of trucks and sells its trucks under a regular replacement program. The gross
				  receipts from the sales of the trucks are included in the sales
				  factor.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-803 - Sales Factor Numerator

Current through Register Vol. 30, No. 28, July 12, 2024
The numerator of the sales factor is the gross receipts
					 attributable to this state and derived by the taxpayer from transactions and
					 activity in the regular course of its trade or business. All interest income,
					 service charges, carrying charges, or time-price differential charges
					 incidental to the gross receipts are included regardless of the place where the
					 accounting records are maintained or the location of the contract or other
					 evidence of indebtedness.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-804 - Property Delivered or Shipped to a Purchaser within This State

Current through Register Vol. 30, No. 28, July 12, 2024
A. Property is
				  deemed to be delivered or shipped to a purchaser within this state if the
				  recipient is located in this state, even though the property is ordered from
				  outside this state.
Example: The taxpayer, with inventory in State A, sells
					 $100,000 of its products to a purchaser with branch stores in several states,
					 including this state. The order for the purchase is placed by the purchaser's
					 central purchasing department, located in State B. The taxpayer ships $25,000
					 of the purchase order directly to purchaser's branch store in this state. The
					 branch store in this state is the "purchaser within this state" with respect to
					 $25,000 of the taxpayer's sales.
B. Property is delivered or shipped to a
				  purchaser within this state if the shipment terminates in this state, even
				  though the property is subsequently transferred by the purchaser to another
				  state.
Example: The taxpayer makes a sale to a purchaser who
					 maintains a central warehouse in this state at which all merchandise purchases
					 are received. The purchaser reships the goods to its branch stores in other
					 states for sale. All of the taxpayer's products shipped to the purchaser's
					 warehouse in this state constitute property delivered or shipped to a purchaser
					 within this state.
C. The
				  term "purchaser within this state" includes the ultimate recipient of the
				  property if the taxpayer in this state, at the designation of the purchaser,
				  delivers to or has the property shipped to the ultimate recipient within this
				  state.
Example: A taxpayer in this state sells merchandise to a
					 purchaser in State A. The taxpayer directs the manufacturer or supplier of the
					 merchandise in State B to ship the merchandise to the purchaser's customer in
					 this state according to purchaser's instructions. The sale by the taxpayer is
					 "in this state."
D. If
				  property being shipped by a seller from the state of origin to a consignee in
				  another state is diverted while en route to a purchaser in this state, the
				  sales are in this state.
Example: The taxpayer, a produce grower in State A, begins
					 shipment of perishable produce to the purchaser's place of business in State B.
					 While en route, the produce is diverted to the purchaser's place of business in
					 this state in which the taxpayer is subject to tax. The sale by the taxpayer is
					 in this state.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-805 - Sales of Tangible Personal Property to the United States Government

Current through Register Vol. 30, No. 28, July 12, 2024
Sales of tangible personal property to the United States
					 Government are not included in the numerator of the sales factor. For the
					 purposes of this Section, only sales for which the United States Government
					 makes direct payment to the seller under the terms of a contract constitute
					 sales to the United States Government. Thus, as a general rule, sales by a
					 subcontractor to a prime contractor, who has the contract with the United
					 States Government, do not constitute sales to the United States
					 Government.
Example 1: A taxpayer contracts with General Services
					 Administration to deliver X number of trucks that are paid for by the United
					 States Government. The sale is a sale to the United States Government.
Example 2: The taxpayer, as a subcontractor to a prime
					 contractor with the National Aeronautics and Space Administration, contracts to
					 build a component of a rocket for $1,000,000. The sale by the subcontractor to
					 the prime contractor is not a sale to the United States
					 Government.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-806 - Sales Other Than Sales of Tangible Personal Property in This State

Current through Register Vol. 30, No. 28, July 12, 2024
This Section provides for the inclusion in the numerator of
					 the sales factor of gross receipts from transactions other than sales of
					 tangible personal property (including transactions with the United States
					 Government). Under this Section, gross receipts are attributed to this state if
					 the income-producing activity that gives rise to the receipts is performed
					 wholly within this state. Also, gross receipts are attributed to this state if,
					 with respect to a particular item of income, the income-producing activity is
					 performed within and without this state but the greater proportion of the
					 income-producing activity is performed in this state rather than in any other
					 state, based on costs of performance.
1. The term "income-producing activity"
				  applies to each separate item of income and means the transactions and
				  activities directly engaged in by a taxpayer in the regular course of its trade
				  or business for the ultimate purpose of obtaining gains or profit.
				  Income-producing activity does not include transactions and activities
				  performed on behalf of a taxpayer, such as those conducted on its behalf by an
				  independent contractor. Accordingly, "income-producing activity" includes but
				  is not limited to the following:
a. The
				  rendering of personal services by employees or the use of tangible and
				  intangible property by the taxpayer in performing a service;
b. The sale, rental, leasing, licensing, or
				  other use of real property;
c. The
				  rental, leasing, licensing, or other use of tangible personal property;
				  and
d. The sale, licensing, or
				  other use of intangible personal property. The mere holding of intangible
				  personal property is not, of itself, an income-producing activity.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 8 - SALES FACTOR › Section R15-2D-807 - Consistency and Uniformity in Reporting

Current through Register Vol. 30, No. 28, July 12, 2024
A. If the taxpayer departs from or modifies
				  the basis for excluding or including gross receipts in the sales factor used in
				  Arizona returns for prior years, the taxpayer shall disclose in the return for
				  the current year the nature and extent of the modification.
B. If the returns or reports filed by the
				  taxpayer with all states to which the taxpayer reports under the Uniform
				  Division of Income for Tax Purposes Act are not uniform in the inclusion or
				  exclusion of gross receipts, the taxpayer shall disclose the nature and extent
				  of the variance upon request by the Department.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 9 - DEPARTURE FROM STANDARD APPORTIONMENT AND ALLOCATION PROVISIONS › Section R15-2D-901 - General

Current through Register Vol. 30, No. 28, July 12, 2024
A. A.R.S. §
										43-1148
				  permits a departure from the allocation and apportionment provisions only in
				  limited cases. A.R.S. §
										43-1148
				  may be invoked only if unusual fact situations produce incongruous results
				  under the apportionment and allocation provisions contained in A.R.S. Title 43,
				  Chapter 11, Article 4.
B. If a
				  departure from the allocation and apportionment provisions referred to in
				  subsection (A) includes a change in the number of factors, the denominator of
				  the apportionment ratio shall be adjusted to reflect the change.
Example 1: If two equally weighted factors are used, the
					 denominator is two.
Example 2: If two factors are used and one of the factors
					 is double weighted, the denominator is three.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 9 - DEPARTURE FROM STANDARD APPORTIONMENT AND ALLOCATION PROVISIONS › Section R15-2D-902 - Special Provisions for the Property Factor

Current through Register Vol. 30, No. 28, July 12, 2024
The following special provisions apply to the property
					 factor of the apportionment formula:
1. If the subrents taken into account in
				  determining the net annual rental rate under R15-2D-605 produce a negative or
				  inaccurate value for any item of property, the Department shall require and the
				  taxpayer shall use another method that will properly reflect the value of the
				  rented property. In no case, however, shall the value be less than an amount
				  that bears the same ratio to the annual rental rate paid by the taxpayer for
				  the property as the fair market value of that portion of the property used by
				  the taxpayer bears to the total fair market value of the rented property.
Example: The taxpayer rents a 10-story building at an
					 annual rental rate of $1,000,000. Taxpayer occupies two stories and sublets
					 eight stories for $1,000,000 a year. The net annual rental rate of the taxpayer
					 shall not be less than 2/10ths of the taxpayer's annual rental rate for the
					 entire year, or $200,000.
2. If property owned by others is used by the
				  taxpayer at no charge or rented by the taxpayer for a nominal rate, the net
				  annual rental rate for the property shall be determined on the basis of a
				  reasonable market rental rate for the property.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 9 - DEPARTURE FROM STANDARD APPORTIONMENT AND ALLOCATION PROVISIONS › Section R15-2D-903 - Special Provisions for the Sales Factor

Current through Register Vol. 30, No. 28, July 12, 2024
The following special provisions apply to the sales factor
					 of the apportionment formula:
1. If
				  substantial amounts of gross receipts arise from an incidental or occasional
				  sale of a fixed asset used in the regular course of the taxpayer's trade or
				  business, those gross receipts are excluded from the sales factor. For example,
				  gross receipts from the sale of a factory or plant are excluded.
2. Insubstantial amounts of gross receipts,
				  arising from incidental or occasional transactions or activities, may be
				  excluded from the sales factor, unless their exclusion would materially affect
				  the amount of income apportioned to this state. For example, the taxpayer
				  ordinarily may include or exclude from the sales factor gross receipts from
				  transactions such as the sale of office furniture, business automobiles, or
				  other similar items.
3. If the
				  income-producing activity with respect to business income from intangible
				  personal property can be readily identified, the income is included in the
				  denominator of the sales factor and, if the income-producing activity occurs in
				  this state, in the numerator of the sales factor as well. For example, usually
				  the income-producing activity can be readily identified with respect to
				  interest income received on deferred payments on sales of tangible property and
				  income from the sale, licensing, or other use of intangible personal property.
				  If business income from intangible property cannot readily be attributed to any
				  particular income-producing activity of the taxpayer, the income is not
				  assigned to the numerator of the sales factor for any state and is excluded
				  from the denominator of the sales factor. For example, if business income in
				  the form of dividends received on stock, royalties received on patents or
				  copyrights, or interest received on bonds, debentures, or government securities
				  results from the mere holding of the intangible personal property by the
				  taxpayer, the dividends and interest shall be excluded from the denominator of
				  the sales factor.
4. Items of
				  income that are not subject to taxation under A.R.S. Title 43 or judicial
				  decision is excluded from the sales factor. Examples of these items include
				  controlled corporation dividends, gross-up dividends, Subpart F dividends, and
				  interest from federal obligations.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 10 - CREDITS › Section R15-2D-1001 - Environmental Technology Facility Tax Credit

Current through Register Vol. 30, No. 28, July 12, 2024
A. A taxpayer claiming a tax credit for a
				  qualified environmental technology facility under A.R.S. §
										43-1169
				  shall retain records as required by A.R.S. §
										42-1105.
				  In addition, a taxpayer shall retain the following records to substantiate the
				  tax credit:
1. A copy of the completed
				  application packet submitted to the Arizona Department of Commerce.
2. The certificate of qualification issued by
				  the Arizona Department of Commerce.
3. A copy of the memorandum of understanding
				  entered into with the Arizona Department of Commerce.
4. A copy of each of the environmental
				  technology annual qualification reports filed with the Arizona Department of
				  Commerce.
5. A schedule showing the
				  amount of credit claimed for each taxable year and the amount used for each
				  taxable year.
6. The source
				  documents that support the amount and date of capital expenditures made in
				  constructing a qualified environmental technology facility.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter D - CORPORATIONS › Article 10 - CREDITS › Section R15-2D-1002 - Renewable Energy Production Tax Credit

Current through Register Vol. 30, No. 28, July 12, 2024
A. For each year for which an owner of a
				  qualified energy generator plans to claim a renewable energy production tax
				  credit, the owner shall file one of the following applications:
1. An initial application in accordance with
				  subsection (B) for:
a. Energy produced in
				  2011 for which an owner of a qualified energy generator plans to claim a credit
				  on the 2011 tax return filed in 2012, and
b. Energy produced after 2011 for which an
				  owner of a qualified energy generator did not have a place on the prior year's
				  Credit Authorization List for the renewable energy production tax credit under
				  A.R.S. §
												43-1164.03(G).
Arizona Administrative Code › Title 15 - REVENUE › Chapter 2 - DEPARTMENT OF REVENUE - INCOME AND WITHHOLDING TAX SECTION › Subchapter G - PARTNERSHIPS › Article 1 - TAXATION OF PARTNERSHIPS › Section R15-2G-101 - Partnerships

Current through Register Vol. 30, No. 28, July 12, 2024
A. For purposes of
				  this Section:
1. "Distributive share of the
				  partnership" means a partner's share, as determined under the partnership
				  agreement, of the items enumerated in A.R.S. §
											43-1412.
2. "Arizona distributive share of the
				  partnership" means the amount computed in subsection (A)(1), subject to the
				  allocation and apportionment provisions of A.R.S. §§
											43-1131
				  through
				  43-1148.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 3 - Department of Revenue - Luxury Tax Section › Article 2 - GENERAL › Section R15-3-201 - Definitions

Current through Register Vol. 30, No. 28, July 12, 2024
In this Chapter, unless otherwise specified:
1. "Acquire" or any variation thereof means
				to receive, to come to own or have, or to come into possession or control of
				tobacco products, regardless of the means or manner and whether the tobacco
				products are later transferred, sold, distributed or otherwise given to another
				person.
2. "Alcoholic beverage" means cider, malt liquor,
				spirituous liquor, and vinous liquor, as these terms are defined in A.R.S.
				§
									42-3001.
3.
				"Applicant" means a person applying for a distributor's license under A.R.S.
				§
									42-3401.
4. "Business location" means either of the
				following:
a. Pursuant to A.R.S. §
										42-3151(A),
				any place where books, papers, invoices, or records of a wholesaler,
				distributor, or retailer are open for inspection by the Department;
				or
b. Pursuant to A.R.S. §
										42-3151(B),
				any place where luxuries are placed, produced, stored, or sold.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 3 - Department of Revenue - Luxury Tax Section › Article 3 - TAXES ON TOBACCO PRODUCTS › Section R15-3-301 - Licensing

Current through Register Vol. 30, No. 28, July 12, 2024
A. A person shall
				obtain a distributor's license before engaging in business as a distributor.
				The Department shall issue a distributor's license to the person named in the
				license application for a business making the initial sale or distribution of
				tobacco products in this state, pursuant to the requirements of A.R.S. §
									42-3401
				and any applicable bonding requirements under A.R.S. §
									42-1102(B).
B. The person shall disclose all places of
				business and business locations in its distributor's license application.
C. The Department shall
				issue a distributor's license only if the distributor maintains any books,
				papers, invoices, records, and tobacco products subject to the Department's
				inspection under A.R.S. §§
									42-3151,
				42-3401(D),
				and
				42-3405
				in a place and manner at the business location that is accessible to the
				Department during normal business hours without a judicial warrant or prior
				written consent. For example, if a licensee or its agent uses the same property
				for residential purposes and as a business location, as that term is defined in
				A.A.C.
				R15-3-201,
				the books, papers, invoices, records, and tobacco products located on that
				property shall be maintained in a place and manner that is completely separate
				from the residential portion of the property so that the Department will not
				need a judicial warrant or written consent to inspect the business location of
				that property during normal business hours.
D. If an
				applicant remits payment of the licensee fee by cashier's check or money order,
				the payment shall bear
the applicant's name
				  as the purchaser or remitter; or, if the payment is made by company check, the
				  check shall bear
the applicant's name
				  as the drawer or maker.
E. Pursuant to
				A.R.S. §§
									42-3004(1)
				 and
				42-3401(C),
				the Department may request an applicant to submit additional supporting
				documentation for the purpose of enforcing this section.
F. For purposes of licensing, "person" means
				any firm partnership, limited liability company, limited liability partnership
				or association, or corporation, and the person's members, officers, or owners
				who directly or indirectly own an aggregate amount of ten percent or more of
				ownership interest.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 3 - Department of Revenue - Luxury Tax Section › Article 3 - TAXES ON TOBACCO PRODUCTS › Section R15-3-304 - Change of Licensee's Business Name

Current through Register Vol. 30, No. 28, July 12, 2024
A licensee that changes the name under which its business
				  operates shall notify the Department in writing within 30 days of the name
				  change and request a reissuance of its distributor's license.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 3 - Department of Revenue - Luxury Tax Section › Article 3 - TAXES ON TOBACCO PRODUCTS › Section R15-3-305 - Change of Licensee's Place of Business, Business Location or Mailing Address

Current through Register Vol. 30, No. 28, July 12, 2024
A. Except
				as provided in subsection (C), a licensee shall notify the Department in
				writing within 30 days of a change in a place of business or business location
				and request a reissuance of its distributor's license that contains the
				licensee's change in information.
B. Except as provided in subsection (C), a
				licensee shall notify the Department in writing within 30 days of a change in
				the licensee's mailing address (where all correspondence is mailed). The
				licensee shall specify whether the change is for the mailing address
				only.
C. A licensee that has
				received a service of documents from the Department pursuant to A.R.S. §
									41-1092.04
				shall notify the Department of any change in the licensee's place of business,
				business location or mailing address that would affect the subsequent service
				of documents within five days of the change.
Arizona Administrative Code › Title 15 - REVENUE › Chapter 3 - Department of Revenue - Luxury Tax Section › Article 3 - TAXES ON TOBACCO PRODUCTS › Section R15-3-306 - Recordkeeping, Invoicing and Filing-related Requirements

Current through Register Vol. 30, No. 28, July 12, 2024
A. A licensee shall maintain books and
				records subject to inspection under A.R.S. §§
									42-3151
				and
				42-3405,
				including invoices required under A.R.S. §
									42-3462(A)(13)
				 for transactions with nonparticipating
				manufacturers, in a manner that allows the Department to segregate transactions
				by the distributor's business location, regardless of how the distributor lists
				transactions on a monthly return for tobacco products.
B. A licensee shall submit electronic copies
				of invoices or equivalent documentation for any nonparticipating manufacturer's
				cigarettes or roll-your-own tobacco purchased, acquired, or exported by or to
				the licensee. Pursuant to A.R.S. §§
									42-3462(A)(13),
				copies of those invoices shall be submitted with the licensee's monthly returns
				required under A.R.S. §
									42-3462.
1. This subsection applies to any
				nonparticipating manufacturer's cigarettes or roll-your-own tobacco entering or
				leaving the inventory of a business location or place of business in the state,
				and to any transaction in which a nonparticipating manufacturer's cigarettes or
				roll-your-tobacco leave an out-of-state business location for any location
				within the state.
2. "Equivalent
				documentation" means letters, memoranda, receipts, billing records or other
				written documentation that records or documents transactions for the purchase,
				acquisition or export of a nonparticipating manufacturer's cigarettes or
				roll-your-own tobacco in a manner that allows the Department to match those
				transactions with transactions recorded in a distributor's invoices, books and
				records. Equivalent documentation shall contain for each transaction:
a. the purchase, acquisition or export
				date;
b. the corresponding invoice
				number;
c. the brand names and
				quantities of each brand of cigarettes or roll-your-own tobacco purchased,
				acquired or exported;
d. the
				identification of any cigarette tax stamps affixed to each brand of cigarettes,
				if applicable; and
e. the
				recipient's name and delivery address.