Title 43 — Taxation of Income

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 qualify…

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 pursuan…

(Rpld. 1/1/27) A. For taxable years beginning from and after December 31, 2007 through December 31, 2026, a credit is allowed against the taxes imposed by this title for cash contributions made by a taxpayer during the taxable year to the pre-9/11 veterans subaccount or post-9/11…

A. Except as provided in subsections B and C of this section, a credit is allowed against the taxes imposed by this title for voluntary cash contributions by the taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G during the taxable year to a qualifying …

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 G during the taxable year to a school tuition organization that is certified pursuant t…

A. A credit is allowed against the taxes imposed by this title for the amount of any fees paid or cash contributions made by a taxpayer or on the taxpayer's behalf pursuant to section 43-401, subsection G during the taxable year to a public school located in this state for the fo…

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 …

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 t…

A. A credit is allowed against the taxes imposed by this title for the pro rata amount of contributions made by an S corporation pursuant to section 43-1183, subsection F or section 43-1184, subsection F, or both. To qualify for the credit: 1. The aggregate contribution in the ta…

A. In the case of nonresidents, Arizona gross income includes only that portion of federal adjusted gross income which represents income from sources within this state. B. Income of a nonresident from the wages or salary received by the nonresident employee who is in this state o…

A. Except as provided in subsection B of this section, income of nonresidents from stocks, bonds, notes or other intangible personal property is not income from sources within this state unless the property has acquired a business situs within this state, except that if a nonresi…

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

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. Subject to the following conditions, nonresidents shall be allowed a credit against taxes imposed by this title for net income taxes imposed by and paid to the state or country of residence on income taxable under this title: 1. The credit shall be allowed only if the state or…

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 in…

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…

This article applies only to residents of states which do not have a current reciprocal income tax exemption agreement with this state pursuant to section 42-1005, subsection B.

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…

There shall be levied, collected and paid for each taxable year upon the entire Arizona taxable income of every corporation, unless exempt under section 43-1126 or 43-1201 or as otherwise provided in this title or by law, taxes in an amount of the greater of fifty dollars or: 1. …

In computing Arizona taxable income for a corporation, the following amounts shall be added to Arizona gross income: 1. The amount of interest income received on obligations of any state, territory or possession of the United States, or any political subdivision thereof, located …

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 inc…

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 sp…

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…

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

The amount of exploration expenses added to Arizona gross income pursuant to section 43-1121, paragraph 10 may be subtracted on a ratable basis as the units of produced ores or minerals discovered or explored by reason of such expenditures are sold. An election made for any taxab…

A. Any taxpayer may elect to amortize the adjusted basis of any device, machinery or equipment for the collection and control at the source of atmospheric and water pollutants and contaminants based upon a period of sixty months. In computing Arizona taxable income, such amortiza…

A. At the election of any corporate taxpayer operating a child care facility for the purpose of making profit, any expenditure made to purchase, construct, renovate or remodel child care facilities or equipment shall be allowable as a subtraction ratably over a period of sixty mo…

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 tax…

As used in this article, unless the context otherwise requires: 1. "Business income" means income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, managem…

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…

For purposes of allocation and apportionment of income under this article, a taxpayer is taxable in another state if either of the following applies: 1. In that state he is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of d…

Rents and royalties from real or tangible personal property, capital gains, interest, dividends or patent or copyright royalties, to the extent that they constitute nonbusiness income, shall be allocated as provided in sections 43-1135 through 43-1138.

A. Net rents and royalties from real property located in this state are allocable to this state. B. Net rents and royalties from tangible personal property are allocable to this state either: 1. If and to the extent that the property is utilized in this state. 2. In their entiret…

A. Capital gains and losses from sales of real property located in this state are allocable to this state. B. Capital gains and losses from the sales of tangible personal property are allocable to this state if either: 1. The property had a situs in this state at the time of the …

Interest and dividends are allocable to this state if the taxpayer's commercial domicile is in this state unless the interest or dividend constitutes business income.

A. Patent and copyright royalties are allocable to this state either: 1. If and to the extent that the patent or copyright is utilized by the payer in this state. 2. If and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not…

A. Except as provided in subsection B of this section, the taxpayer shall elect to apportion all business income to this state for taxable years beginning from and after: 1. December 31, 2006 through December 31, 2007 by either: (a) Multiplying the income by a fraction, the numer…

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

Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subr…

The average value of property shall be determined by averaging the values at the beginning and ending of the tax period, but the department may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpay…

The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period other than compensation paid by eit…

Compensation is paid in this state if any of the following apply: 1. The individual's service is performed entirely within this state. 2. The individual's service is performed both within and without the state, but the service performed without the state is incidental to the indi…

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 whi…

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. 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 a…

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

This article shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.

This article may be cited as the uniform division of income for tax purposes act.