Corporate Income Tax
Arizona’s Corporate Income Tax for a taxable year is 6.968% of taxable income or $50, whichever is greater.
- Estimated tax payments are required if the taxpayer’s Arizona income tax liability for the taxable year is $1,000 or more.
- Electronic Funds Transfer (EFT) is the required method of payment for corporate estimated tax payments if the taxpayer’s Arizona income tax liability for the preceding taxable year was $20,000 or more.
- Tax return due date. A corporate income tax return must be filed with the Department of Revenue. The return is due by the 15th day of the fourth month following the close of the taxable year for regular ("C") corporations. For "S" corporations, taxes imposed are due on the 15th day of the third month following the close of the taxable year.
Source: http://www.azdor.gov/Portals/0/Brochure/622.pdf
Taxable Income
Corporations have the option to use either the Double Weighted or 80% Sales Factor apportionment to calculate taxable income for Arizona.
80% Sales Factor
The 80% Sales Factor calculation assigns different weights to each factor below, putting an emphasis on sales made in Arizona. The weight on sales increases over the three-year phase in period. The calculation for 2009 and subsequent years is as follows:
- Payroll paid in Arizona divided by global payroll.
- Value (original cost) of property situated in Arizona divided by the global value (original cost) of property.
- Sales in Arizona multiplied by eight and divided by global sales.
The three percentages are added together and divided by 10 to produce a ratio to apportion total taxable income to Arizona.
Source: www.gpec.org, 2010
Double Weighted Sales Factor
This sales factor places a greater emphasis on the sales factor than the other two. The calculation is as follows:
- Payroll paid in Arizona divided by global payroll
- Value (original cost) of real and tangible property in Arizona divided by the global value (original cost) of real and tangible property.
- Sales (defined as manufacturing and selling or purchasing and reselling) in Arizona multiplied by two and divided by global sales.
The three percentages are added together and divided by four to produce a ratio to apportion total taxable income to Arizona.
Source: www.uic.edu/classes/actg/actg446/state%20apportionment.ppt, www.gpec.org, 2010
Contact Information
Economic Development Office:
Lori M. Gary, CEcD
Economic Development Administrator
16705 E. Avenue of the Fountains
Fountain Hills, AZ 85268
Tel: (480) 816-5109
Fax: (480) 837-3145
Email: lgary@fh.az.gov