Corporate Income Tax Highlights

2019 HIGHLIGHTS

 

Tax Rate Changes

The corporate income tax rate remains:

  • 4.9% for taxable years beginning from and after December 31, 2016

 
Apportionment Changes

  • All non-air carrier taxpayers may select an apportionment ratio where the sales factor is weighted at 100% and the property and payroll factors are not included in the calculation.
  • A multistate service provider may make a binding election to determine Arizona sales of services for purposes of the sales factor using a calculation based on 100% of the market sales. See Schedule MSP and the related instructions for more information including a definition of “multistate service provider”.

 
Inclusion of federal return with Arizona return

The department no longer requests that you include a copy of your federal return with your Arizona return.​

 

Electronic Filing of Corporate Income Tax Returns
Corporate income tax returns shall be filed electronically for taxable years beginning from and after December 31, 2019, or when the department establishes an electronic filing program. 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.

Electronic filing of Arizona corporate income tax returns is available for the 2019 taxable year. Corporate taxpayers may elect to file their Arizona corporate income tax return electronically. Please see the department’s website at www.azdor.gov for a list of approved software vendors.

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:

  • $10,000 or more for any taxable year beginning from and after December 31, 2018 through December 31, 2019,
  • $5,000 or more for any taxable year beginning from and after December 31, 2019 through December 31, 2020,
  • $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.