Title 43 — Taxation of Income

This title shall be known and may be cited as the Arizona income tax act of 1978.

A. It is the intent of the legislature by the adoption of this title to accomplish the following objectives: 1. To adopt the provisions of the federal internal revenue code relating to the measurement of adjusted gross income for individuals, to the end that adjusted gross income…

The provisions of this act shall apply only to taxable years beginning after December 31, 1978.

In this title, unless the context otherwise requires: 1. "Assessment" includes a proposed additional assessment. 2. "Board" means the state board of tax appeals or, if applicable, a division of the state board. 3. "Corporation" means a corporation, joint stock company, bank, insu…

A. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2024, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2025, including those provisions th…

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 instru…

(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 …

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.

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, togethe…

If any provision of this title be held invalid, such invalidity shall not affect other provisions which can be given effect without the invalid provision and to this end the provisions of this title are declared to be severable.

The "income tax act of 1933", being sections 73-1501 to 73-1551, inclusive, as amended, Arizona code of 1939, is repealed. The "income tax act of 1954", as amended, Arizona Revised Statutes of 1956, is also repealed. Such repeals shall not affect any act done or any right accruin…

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 2023-20…

A. Whenever state or local law enforcement agency personnel in the course of an investigation obtain knowledge or a good faith belief that a person has received illegal income with an estimated value in excess of one thousand dollars, the person in charge of the investigation sha…

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. The department shall adopt and enforce rules for the collection of tax under this title on the income earned for services rendered in this state by professional athletes and employees of professional sport franchise organizations. B. On or before December 31 of each year each …

A. The department shall issue a certificate of eligibility to a person who files an application with the department in the form and manner prescribed by the department on a first come, first served basis, subject to subsection E. An application submitted to the department under t…

A. The I didn't pay enough fund is established consisting of monies received pursuant to section 43-621. B. The director of the department of revenue shall administer the fund. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided…

B. The individual income tax model shall: 1. At a minimum, allow for the adjustment of individual income tax law parameters against an anonymized representative sample of individual income tax returns. 2. Include procedures to protect taxpayer confidentiality under applicable sta…

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 …

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, 43-1…

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…

A. On or before September 30 of each year, the department shall report to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting on the amount of individual income tax credits and corporate income tax credits that wer…

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.

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 …

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 a…

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 a…

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 …

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.

If the taxpayer is unable to make his own return, the return shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of the taxpayer.

A. Every fiduciary, except a receiver appointed by authority of law in possession of part only of the property of an individual, shall make a return for any of the following taxpayers for whom the fiduciary acts: 1. Every individual who is required to file an individual income ta…

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 e…

A. Except as provided in subsections B and C of this section, every partnership shall make a return for each taxable year, stating the taxable income computed in accordance with subtitle A, chapter 1, subchapter K of the internal revenue code and any adjustments required pursuant…

A. Every corporation subject to the tax imposed by this title shall make a return to the department. Every corporation return required by this title to be filed with the department shall be signed by one or more of the following officers: 1. The president. 2. The treasurer. 3. An…

For purposes of this article, the term "gross income" shall be gross income as defined in the internal revenue code.

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 o…

A. If a husband and wife have filed a joint return for a taxable year for which separate returns could have been made by them under section 43-309, and the time prescribed by this title for filing the return for such taxable year has expired, the spouses may nevertheless make sep…

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 m…

A. A person licensed under section 6-813 to conduct escrow business for the purchase and sale of real property located in this state shall file an information return of sales of real property located in this state that are reported pursuant to federal reporting requirements under…

Each return required to be filed under this title shall contain the following: 1. It shall contain or be verified by a declaration that it is made under penalties of perjury. The declaration shall be written or in a form prescribed by the department pursuant to section 42-1105, 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 f…

A. All returns required by this title shall be in such a form as the department may from time to time prescribe and shall be filed with the department. B. The department shall prescribe a short form return for individual taxpayers who: 1. Are eligible and elect to pay tax based o…

The department may round fractional dollars to the nearest whole dollar and may require the taxpayer to do so in preparing any return under this title.

Unless otherwise indicated: 1. Returns made on the basis of the calendar year shall be filed on or before the fifteenth day of April following the close of the calendar year. 2. Returns made on the basis of a fiscal year shall be filed on or before the fifteenth day of the fourth…

A. If the amount of taxable income for any year of any taxpayer as reported to the United States treasury department is changed or corrected by the commissioner of internal revenue or other officer of the United States or other competent authority, or if a renegotiation of a cont…

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…

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 fr…

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 re…

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 amoun…

For the purposes of this article, "employer" means the person for whom an individual performs or performed any service of whatever nature, as the employee of such person including any officer or department of the state, any political subdivision or agency of the state, any city o…

A. No amount shall be deducted or retained from: 1. Wages or salary paid to an employee of a common carrier when such employee is a nonresident of this state as defined in section 43-104 and regularly performs services both within and without this state. 2. Wages paid for domesti…