Corporate Income Tax Highlights

2020 HIGHLIGHTS

 

Electronic Filing of Corporate Income Tax Returns


Electronic filing of Arizona corporate income tax returns is required for the 2020 taxable year. Please see the department’s website at https://azdor.gov for a list of approved software vendors.

Any corporate taxpayer that is required to file its income tax return electronically may apply to the director for an annual waiver from the electronic filing requirement. The waiver may be granted if any of the following apply:

  • The taxpayer has no computer.
  • The taxpayer has no internet access.
  • Any other circumstance considered to be worthy by the director.

 

Waivers are granted on an annual basis and expire at the end of the requested tax year. Waivers must be renewed each calendar year. If a waiver is not renewed, you will be subject to statutory electronic filing and payment requirements at the expiration of your waiver.

To request a waiver, submit Form 292, Electronic Filing and Payment Waiver Application, to the department. Form 292 is available at: https://azdor.gov/forms/other-forms/electronic-filing-and-payment-waiver-application.

A waiver is not required if the corporate income tax return cannot be electronically filed for reasons beyond the taxpayer’s control, including situations in which the taxpayer was instructed by either the Internal Revenue Service or the Arizona Department of Revenue to file by paper.

Please contact the department at [email protected] if you need assistance in electronically submitting your Arizona corporate income tax return.

 

Electronic Funds Transfer

Corporations are required to pay their tax liability by electronic funds transfer (EFT) if the corporation owes:

  • $5,000 or more for any taxable year beginning from and after December 31, 2019 through December 31, 2020 or,
  • $500 or more for any taxable year beginning from and after December 31, 2020.

 

A corporation may apply to the director for an annual waiver from the electronic payment requirement. The application must be received by December 31 of each year. The director may grant the waiver if any of the following applies:

  • The corporation has no computer.
  • The corporation has no internet access.
  • Any other circumstance considered to be worthy by the director exists, including:
    • The corporation has a sustained record of timely payments, and
    • The corporation has delinquent tax accounts with the department.

 

To request a waiver, submit Form 292, Electronic Filing and Payment Waiver Application, to the department. Form 292 is available at: https://azdor.gov/forms/other-forms/electronic-filing-and-payment-waiver-application.

NOTE: A corporation who is required to pay by EFT but who fails to do so is subject to a penalty of 5% of the amount of the payment not made by EFT. See A.R.S. § 42-1125(O).
For additional information on electronic funds transfer, refer to A.R.S. § 42-1129 and the related Arizona Administrative Code rules (A.A.C. R15-10-301 through R15-10-307) for detailed information.

 

Inclusion of Federal Return with Arizona return

The department requests that taxpayers include a copy of their “as-filed” federal return (i.e. federal Form(s) 1120, 1120-S, 1120-F, 1120-RIC, etc.) and all its schedules and attachments with their Arizona return.

 

Change to MSP Election

Effective for taxable years beginning from and after December 31, 2019, the Multistate Service Provider election includes sales from services or sales from intangibles in its calculation. This includes sales derived from credit and charge card receivables, including fees, merchant discounts, interchanges, interest, and related revenue. Refer to the instructions for the MSP for additional information.

 

Credits No Longer Available to Corporate Taxpayers

For taxable years beginning after December 31, 2019, the following credits may no longer be claimed by corporate taxpayers:

  • The Agricultural Pollution Control Credit, claimed onArizona Form 325;
  • The Credit for Donation of School Site, claimed onArizona Form 331; and
  • The Training Credit for Healthy Forest Enterprises andthe Employment Credit for Healthy Forest Enterprises,claimed on Arizona Form 332, Credit for Employment bya Healthy Forest Enterprise.

Corporate taxpayers, including S corporations, may no longer claim these credits for taxable years beginning from and after December 31, 2019.