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Arizona Free Printable Arizona Booklet:  Individual Income Tax Credits for 2024 Arizona Small Business Income Tax Booklet

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Small Business Income Tax Booklet
Arizona Booklet: Individual Income Tax Credits

2 23 Arizona Booklet Small Business Income Tax This booklet contains: Form 140-SBI Form 204-SBI - Form 140ES-SBI - Form 301-SBI - Form 309-SBI - Small Business Income Tax Return Extension Payment For Tax Year 2021 Small Business Income Tax Returns Only Individual Estimated Income Tax Payment Small Business Income Tax Return Nonrefundable Individual Tax Credits and Recapture for Forms 140-SBI, 140PY-SBI, 140NR-SBI or 140X-SBI Credit for Taxes Paid to Another State or Country For Forms 140-SBI, 140NR-SBI and 140PY-SBI  REPLACE WITH CONFORMITY NOTICE PAGE Individual Income Tax - Highlights Due Date for Calendar Year Filer Your 2023 individual income tax return is due by midnight on April 15, 2024. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2024. 2023 Arizona Standard Deduction Amounts Adjusted The 2023 Arizona standard deduction amounts are:    $ 13,850 for a single taxpayer or a married taxpayer filing a separate return; $ 27,700 for a married couple filing a joint return; and $ 20,800 for individuals filing a head of household return. Change to Standard Deduction Increase for Charitable Contributions For taxpayers who do not itemized deductions on their 2023 Arizona income tax return and elect to take the standard deduction, the allowable Standard Deduction Increase was modified. For tax year 2023, the allowable portion of your charitable contributions used to compute your Standard Deduction Increased was increased from 27% to 31% of the qualified charitable contributions made during the tax year. Taxpayers must complete page 3 of their personal income tax form to claim the Standard Deduction Increase. (Arizona Form 140, Form 140PY or Form 140NR). 2023 New Tax Rate of 2.5% for All Income Levels and Filing Status The Optional Tax Table and the X and Y Tax Table are now obsolete. 2023 Credit for Contributions to Private School Tuition Organizations (Form 323) The allowable current year credit for contributions to private school tuition organizations was adjusted for inflation purposes. For 2022, the maximum current year credit is: • • $655 for single and head of household taxpayers. $1,308 for married taxpayers filing a joint return. Credit for Contributions Made to Certified School Tuition Organizations (Form 348) The allowable current year credit for contributions to a certified school tuition organization was adjusted for inflation purposes. For 2022, the maximum current year credit is: • • $652 for single and head of household taxpayers. $1,301 for married taxpayers filing a joint return. New Individual and Corporate Nonrefundable Tax Credits Credit for Motion Picture Production Costs (Form 334) For taxable years beginning from and after December 31, 2022, a tax credit is allowed against production costs paid by a motion picture production company in this state that are subject to taxation by this state and that are directly attributable to a motion picture production. The tax credit may be claimed on either the individual’s personal income tax return (Form 140, 140NR, or 140PY) or the Small Business Income tax return, if filing. (Form 140-SBI, 140NR-SBI, or 140PY-SBI) For more information, see Credit Form 334 and instructions. THIS PAGE INTENTIONALLY LEFT BLANK Small Business Income Tax - Highlights 2023 Due date for Calendar Year Filers New Individual Tax Credits Your 2023 Small Business Income tax return is due by midnight on April 15, 2024. If you file under a valid extension, your extended due date to file your income tax return is October 15, 2024. Credit for Motion Picture Production Costs (Form 334) For taxable years beginning from and after December 31, 2022, a tax credit is allowed against production costs paid by a motion picture production company in this state that are subject to taxation by this state and that are directly attributable to a motion picture production. The tax credit may be claimed on either the individual’s personal income tax return (Form 140, 140NR, or 140PY) or the Small Business Income tax return, if filing. (Form 140-SBI, 140NR-SBI, or 140PY-SBI) 2023 Arizona Small Business Income (SBI) Tax The tax rate applicable to small business taxable income reported on Forms 140-SBI, 140PY-SBI or Form 140NR-SBI was reduced from 3.0% in 2022 to 2.5% for 2023. For more information, see Credit Form 334 and instructions. 1 THIS PAGE INTENTIONALLY LEFT BLANK 2023 Small Business Income Tax Return (Residents) For information or help, call one of the numbers listed: Phoenix (602) 255-3381 From area codes 520 and 928, toll-free (800) 352-4090 Tax forms, instructions, and other tax information If you need tax forms, instructions, and other tax information, go to the department’s website at www.azdor.gov. Income Tax Procedures and Rulings These instructions may refer to the department’s income tax procedures and rulings for more information. To view or print these, go to our website select the About tab on the home page and select Legal Research from the drop-down menu and then click on Procedures or Rulings from the drop-down menu. Using the Category box, select the tax type and then scroll down to find the Document ID or use the Search Keyword function to locate the document. Publications To view or print the department’s publications, go to our website select the About tab on the home page and select Legal Research from the drop-down menu and then click on Publications from the drop-down menu. Leave the Paper Behind - e-file! • • • • Quicker Refunds Accurate Proof of Acceptance Free ** No more paper, math errors, or mailing delays when you e-file! Get your refund quicker with direct deposit. E-file today and pay by April 15, 2024 to avoid penalties and interest. E-file through an authorized IRS/DOR e-file provider or by using your personal computer and the Internet. Visit our website at www.azdor.gov for a listing of approved e-file providers and on-line filing sources. ** For free e-file requirements, check out our website at www.azdor.gov. AVOID PROCESSING DELAYS: Are you mailing your Arizona Small Business income tax return? If you are mailing your return to the department, you must include Form 140-SBI with your Form 140, when filed. See the mailing instructions for Form 140 for assembly order (form sequence) information. NOTE: If you made any 2023 estimated tax payments for the 140-SBI tax return and are not electing to report small business income on the 140-SBI return for tax year 2023, you must file a zero “0” 2023 140-SBI return to claim any overpayment from the 2023 estimated taxes. The overpayment shown on Form 140-SBI tax return will be applied against any tax liability (TAX DUE) shown on the personal income tax return (Form 140). After netting the two returns, the department will either issue a refund or bill the taxpayer for any remaining tax due, if applicable. Arizona Form 140-SBI If you do not file a zero 140-SBI return to claim only the overpayment from estimated taxes, the processing of the SBI overpayment may be delayed along with any application to your personal income tax liability shown on the return. How do I file a zero “0” 140-SBI tax return? 1. Complete all information on lines 1, 2 and 3. 2. Select your filing status in box 95. 3. On the following lines, enter “0”. • Line 10, Total Small Business Income • Line 28, Subtotal • Line 53, Arizona Small Business Taxable Income • Line 54, Small Business Income Tax • Line 56, Subtotal of Tax • Line 58, Balance of Tax 4. Amounts must be entered on the following lines: • Line 59c – Estimated Tax Payments Enter the total amount of estimated tax payments made on Form 140ES-SBI or through AZTaxes.gov during 2023 tax year on line 59c (box 59a). • Line 64 - Overpayment • Line 66 - Balance of Overpayment • Line 69, Refund 5. Sign and date the return. If you paid someone to prepare your tax return, that person must also sign and date the return. 6. Include Form 140-SBI return with your timely filed personal income tax return. If form is not complete or calculation lines are left blank. processing your return may be delayed. Who Can Use Form 140-SBI? Beginning with tax year 2021, full-year resident individuals may elect to report their small business income on Arizona Form 140-SBI, Small Business Income, for the small business income amount included in their federal adjusted gross income. An individual’s small business income is reported on federal Schedules B, C, D, E, F and Form 4797 (for amounts not included on Schedule D). Additional information and guidance can be found in the department’s Publication 712, Summary of Arizona Small Business Income and Taxation. How do I elect to report Small Business Income on Arizona Form 140-SBI? Taxpayers make the election by simply completing Form 140-SBI reporting their small business income and including the completed form with their Arizona Form 140, Resident Personal Income Tax Return, when filed. If you do not timely file Form 140-SBI with your Form 140, your election will be denied and the subtraction on your Form 140 will be disallowed. Arizona Form 140-SBI What if You Cannot File on Time? If you are electing to report your small business income on Form 140-SBI, be sure to check the box on line 13 (13S) on Form 140. If you are not making the election, do not check box 13S or enter an amount on line 13 on Form 140. You may request an automatic 6-month extension if you know you will not be able to file on time. If you request an extension to file your 2023 calendar year tax return, your due date is October 15, 2024 to timely file your 2023 tax return. NOTE: You must include Form 140-SBI with your Form 140, when filed. If you do not include Form 140-SBI with your Form 140, processing of you return may be delayed or your subtraction on line Form 140, line 13, may be denied. See the Mailing instruction (Form 140) for the correct address when mailing both Form 140 and Form 140-SBI If you file Form 204 requesting an extension for your Form 140, it will also apply to Form 140-SBI. Do not file a separate extension request for Form 140-SBI. Only use Form 204-SBI to make an extension payment for Form 140-SBI. What if a Taxpayer Died? NOTE: An extension does not extend the time to pay your income tax. See the instructions for Arizona Form 204. If a taxpayer died before filing a return for 2023, the taxpayer's spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator, or anyone who is in charge of the deceased taxpayer’s property. To get a filing extension, you can either • The person who files the return should use the form the taxpayer would have used. The person who files the return should print the word "deceased" after the decedent's name and enter the date of death after the decedent's name. Claiming a Refund for a Deceased Taxpayer If you are claiming a refund on Form 140-SBI for a deceased taxpayer, you must complete Arizona Form 131-SBI, Claim for Refund on Behalf of Deceased Taxpayer. • If you are claiming a refund on Form 140 for a deceased taxpayer, you must also complete Arizona Form 131, Claim for Refund on Behalf of Deceased Taxpayer. Place Form 131-SBI behind the last page of Form 140-SBI. Place Form 131 behind the last page of Form 140. See the form sequence at the end of the instructions for completing Form 140. Apply for a state extension (Arizona Form 204). To apply for a state extension, file Form 204 by April 15, 2024. See Form 204 for details. You do not have to include a copy of the extension with your return when you file, but make sure that you check box 82F (above your name) on page 1 of the return. If you must make an extension payment for your small business income tax return, use Arizona Form 204-SBI, or visit www.AZTaxes.gov to make an electronic payment. Use your federal extension (federal Form 4868). File your Arizona return by the same due date. You do not have to include a copy of your federal extension with your return, but make sure that you check box 82F (above your name) on page 1 of the return. When Should You File if You Are a Nonresident Alien? As a Nonresident Alien, do not file Form 140 or Form 140-SBI. Use Form 140NR, Nonresident Personal Income Tax Return, to report your Arizona sourced income and Form 140NR-SBI if you elect to report your Arizona sourced small business income on the Small Business Income Tax Return. See the instructions for Form 140NR for your filing due dates. What are the Filing Dates and Penalties? NOTE: If the due date for an income tax or related payment falls on a weekend and/or legal holiday, the filing or payment is considered timely if filed or paid on the next business day and that business day is a day other than Saturday, Sunday or a legal holiday. What if You File or Pay Late? Late Payment Penalty If you pay your small business income tax liability late, we will charge you interest and penalties on the amount you owe. If the U.S. Post Office postmarks your 2023 calendar year return by April 15, 2024, your return will not be late. You may also use certain private delivery services designated by the Internal Revenue Service (IRS) to meet the “timely mailing as timely filed” rule. For more information, see “Mailing Your Return” at the end of these instructions. When Should You File? NOTE: Your small business income tax return (Form 140-SBI) must be timely filed (including extension). If you do not file Form 140-SBI timely, your election will be denied and the subtraction on your Form 140 will be disallowed. Your small business tax return’s due date is the same as the due date for your Form 140. Your 2023 calendar year small business tax return is due no later than midnight, April 15, 2024. File your return as soon as you can after January 1, 2024, but no later than April 15, 2024 to timely file your 2023 tax return. Late Filing Penalty You must file Form 140-SBI timely along with your Form 140 by the original due date (including valid extensions). If you file Form 140-SBI late, your small business election will be denied and the return rejected. In addition, the subtraction on Form 140 return will be disallowed. In this case, no late filing penalty will be assessed on your small business income tax return. However, the late filing penalty may still be assessed on your Form 140 return if it was filed late. If you are a fiscal year filer, your return is due on the 15th day of the fourth month following the close of your fiscal tax year. 2 Arizona Form 140-SBI If you amend your federal return changing amounts originally reported on federal Schedules B, C, D, E, F and Form 4797 for any year, you must also file an Arizona Form 140X-SBI and 140X for that year. If you file your Form 140 late, we will charge you a late filing penalty on your Form 140. This penalty is 4½% (.045) of the tax required to be shown on the return for each month or fraction of a month the return is late. This penalty cannot exceed 25% (.25) of the tax found to be remaining due. If the IRS makes a change to your federal taxable income for any year, you must report that change to Arizona. You must file Form 140X-SBI and 140X within 90 days of the final determination of the IRS. You may use one of the following two options to report this change. Late Payment Penalty If you pay your tax late, we will charge you a late payment penalty. This penalty is ½ of 1% (.005) of the amount shown as tax for each month or fraction of a month for which the failure continues. We charge this penalty from the original due date of the return until the date you pay the tax. This penalty cannot exceed a total of 10% (.10) of the unpaid tax. Option 1 You may file Forms 140X-SBI and 140X for that year. If you choose this option, you must amend and mail your Arizona returns within 90 days of the final determination of the IRS. Include a complete copy of the federal notice with your Forms 140X-SBI and 140X. Underpayment of Estimated Tax Penalty If an individual who fails to make the required small business income estimated tax payments is subject to penalty on any estimated tax payment that is late or underpaid. See Form 221-SBI for more information. Option 2 You may file a copy of the final federal notice with the department within 90 days of the final determination of the IRS. Extension Underpayment Penalty If you choose this option, you must include a statement in which you must: 1. Request that the department recompute your tax on Forms 140-SBI and 140; and 2. Indicate if you agree or disagree with the federal notice. If you file your return under an extension, you must pay 90% (.90) of the tax shown on your return by the return's original due date. If you do not pay this amount, we will charge you a penalty. This penalty is ½ of 1% (.005) of the tax not paid for each 30-day period or a fraction of a 30-day period. We charge this penalty from the original due date of the return until the date you pay the tax. This penalty cannot exceed 25% (.25) of the unpaid tax. If we charge you the extension underpayment penalty, we will not charge you the late payment penalty under Arizona Revised Statutes (A.R.S.) § 42-1125(D). If you do not agree with the federal notice, you must also include any documents that show why you do not agree. If you choose Option 2, mail the federal notice and any other documents to: Individual Income Audit Arizona Department of Revenue PO Box 29084 Phoenix, AZ 85038-9084 NOTE: If you are subject to two or more of the above penalties, the total cannot exceed 25%. Interest Do You Need to Make Arizona Estimated Payments For the Small Business Tax Return in 2024? We charge interest on any tax not paid by the due date. We will charge you interest even if you have an extension. If you have an extension, we will charge you interest from the original due date until the date you pay the tax. The Arizona interest rate is the same as the federal rate. NOTE: If you will be filing a zero “0” tax return for tax year 2024 only reporting an overpayment of any 2024 estimated/extension payments made you are not required to make estimated small business tax payments for tax year 2024. When Should You Amend a Return? If you need to make changes to your small business tax return after you have filed, do not file a new return using Form 140-SBI. You must file Arizona Form 140X-SBI, Small Business Amended Income Tax Return. File your amended return after your original return has processed. Generally, you have four years to amend a return to claim a refund. Taxpayers are required to make small business income estimated tax payments if the small business income liability will exceed $1,000 (small business income tax less allowable tax credits). Taxpayers must pay 90% of current or 100% of last year’s tax liability. The 100% of last year exception only applies if a taxpayer filed a small business income tax return in the prior year. If either of the following applies, file Form 140X-SBI. • • You are changing any amount originally reported on Form 140-SBI or latest amended return. You are rescinding your election to report small business on Form 140-SBI. See Form 140ES-SBI, page 2 to determine if you are required to make estimated tax payments in 2024. Use the worksheet for Arizona Form 140ES-SBI to figure how much your payments should be. For more information about making estimated payments, see the department’s publication, Pub. 012, Arizona Individual Estimated Income Tax Payments. If you amend your small business income tax return, you are required to amend your Form 140, using Form 140X. For more information, see the instructions for Form 140X. 3 Arizona Form 140-SBI What if You Make Your Estimated Payments Late? Identification Numbers for Paid Preparers We will charge you a penalty if you are late or if you fail to make any required payments. See Arizona Form 221-SBI. If you pay someone else to prepare your return, that person must also include an identification number where requested. A paid preparer may use any of the following: • his or her PTIN; • his or her SSN; or • the EIN for the business. Can You Make Estimated Payments Even if You Do Not Have To? If you do not have to make Arizona estimated income tax payments, you may still choose to make them. For details, see Arizona Form 140ES-SBI. A paid preparer who fails to include the proper identification number may also be subject to a penalty. Line-by-Line Instructions Box 3a - Injured Spouse Protection of Joint Overpayment Tips for Preparing Your Return • You must complete your federal return before you can start your Arizona small business income tax return. • Make sure that you enter your Social Security Number (SSN) on your return that you entered on your Form 140. Complete your return using black ink. If you are married filing a joint return, make sure that you enter your spouse’s SSN entered on Form 140. You must round dollar amounts to the nearest whole dollar. If 50 cents or more, round up to the next dollar. If less than 50 cents, round down. Do not enter cents. If you are mailing your return, see mailing instructions for Form 140 for the assembly order. Make sure you include your daytime telephone number. If filing a fiscal year return, fill in the period covered. • • • • • Check box 3a only if you and your spouse are filing a joint return and you or your spouse qualify as an injured spouse and are requesting protection from application of any joint overpayment against the other spouse’s delinquencies or debts for back child support, court fees, and fees to counties, cities or educational institutions. The taxpayer (spouse) requesting injured spouse protection must have made estimated payments on Form 140-SBI. NOTE: You cannot use Form 203 to request protection from offset for past-due federal taxes. You must contact the IRS. You must complete Arizona Form 203, Request for Injured Spouse Protection from Application of Joint Overpayment Against Spouse’s Delinquencies and Debts, and include that form with your tax return when filed. For more information, see the instructions for Form 203. Entering Your Name, Address, and SSN Determining Your Filing Status – Line 95 (Boxes 95a through 95d) Lines 1, 2, and 3 NOTE: Make sure you enter your SSN on the appropriate line and your SSN is correct. If you are filing a joint return, also make sure you enter your SSNs in the same order every year. The filing status that you use on your Arizona small business income tax return (Form 140-SBI) must be the same filing status used on your Form 140. For information on determining your filing status, see the instructions for Forms 140. • Check box 95a if you are married and filing a joint return. • Check box 95b if you are married and filing a separate return. • Check box 95c if you are filing as Head of Household. • Check box 95d if you are filing as single. Enter your name, address, and SSN in the space provided as reported on Form 140. If you are filing a joint return, enter your SSNs in the same order as your first names. If your name appears first on the return, make sure your SSN is the first number listed. If you are married filing separately, enter your name and SSN on the first line 1. Enter your spouse’s name and SSN on the second line 1. For more information on filing a joint tax return with your partyear resident or nonresident spouse, see the department’s ruling, ITR 14-1, Filing a Joint Tax Return When a Resident Spouse is Married to a Part-Year Resident or Nonresident. Make sure that you enter your SSN on your return. Make sure that all SSNs are clear and correct. You may be subject to a penalty if you fail to include your SSN. It will take longer to process your return if SSNs are missing, incorrect, incomplete or unclear. Totaling Your Income Lines 4 through 9 You must complete your federal return (Schedules B, C, D, E, F and Form 4797) before you enter an amount on lines 4 through 9. You must complete a 2023 federal return to determine your federal adjusted gross income, even if you are not filing a federal return. Arizona uses federal Schedules B, C, D, E, F and Form 4797 as a starting point to determine your Arizona small business taxable income and the adjustment taken on Form 140, line 13. Use your current home address or PO Box. The department will mail your refund to or correspond with you at that address. For a deceased taxpayer, see page 2 of these instructions. Foreign Addresses If you have a foreign address, enter the information in the following order: city, province or state, and country. Follow the country’s practice for entering the postal code. Do not abbreviate the country name. 4 Arizona Form 140-SBI Line 8 – Federal Schedule F NOTE: You must complete lines 4 through 10 on Form 140-SBI to determine the amount to enter on line 13 (Form 140). Enter the amount of profit or loss from farming that is reported on federal Schedule F and included in federal adjusted gross income. Line 4 – Federal Schedule B Enter the amount of your interest and ordinary dividends income reported on your federal Schedule B and included in federal adjusted gross income. Line 9 – Federal Form 4797 Enter the amounts reported on federal Form 4797 that are not reported on federal Schedule D. These amounts are reported on federal Schedule 1. Enter only those amounts reported on federal Schedule 1 and included in federal adjusted gross income. Line 5a – Federal Schedule C Enter the amount of your profit or loss from business reported on your federal Schedule C and included in federal adjusted gross income. Line 10 - Total Small Business Income Line 5b Add lines 4, 5a, 6, 7a, 8 and 9. Enter the total. Enter your NAICS code shown on your Federal Schedule C. If you have more than one Schedule C, enter the NAICS code from Schedule C with highest gross receipts. Total amount entered on line 10 is also reported on Form 140, line 13. Additions to Income Line 6 – Federal Schedule D Line 11 - Fiduciary Adjustment Enter the portion of net capital gains or losses that are included in federal schedule D and federal adjusted gross income (FAGI) that are from the sale of an ownership interest in a non-publicly traded entity or the disposition of capital assets used in connection with a trade or business activity (including goodwill and going concern value). All other capital gains or losses that were included in FAGI should be reported on Form 140. A fiduciary uses Arizona Form 141AZ Schedule K-1 to report to you your share of the fiduciary adjustment from the trust or estate. Line 7a – Federal Schedule E Line 3 of Form 141AZ Schedule K-1 shows your share of the fiduciary adjustment from the estate or trust. If the amount reported on line 3 of your Form 141AZ Schedule K-1 is a positive number, enter that amount on line 11. Enter the amount of supplemental income and loss reported on your federal Schedule E and included in federal adjusted gross income. NOTE: If the amount reported on line 3 of your Form 141AZ Schedule K-1 is a negative number, enter that amount on line 34. NOTE: The amount entered on line 7a should equal the sum of lines 7b through 7f. Line 12 - Non-Arizona Municipal Interest Enter the amount of interest income from non-Arizona municipal bonds that you did not include as small business income on your federal Schedule B. Line 7b – Rental Real Estate, Royalties Enter the total amount of income or loss from rental real estate and royalties reported on your federal Schedule E, Part I and included in federal adjusted gross income. You may exclude any expenses incurred to purchase or carry the obligation. Reduce the interest income by the amount of those expenses that you could not deduct on your federal return. Line 7c – Income or Loss from Partnerships and S Corporations If you received tax exempt interest from municipal bonds, keep a schedule listing the payors and the amount received from each payor for your records. You should also keep supporting documents for amounts received from Arizona municipal bonds that are exempt from Arizona income tax. These may be items such as bank statements, brokerage statements, etc. Enter the total amount of partnership and S Corporations income or loss reported on your federal Schedule E, Part II and included in federal adjusted gross income. Line 7d – Income or Loss from Estates and Trusts Enter the total amount of estate and trusts income or loss reported on your federal Schedule E, Part III and included in federal adjusted gross income. Line 13 - Partnership Income Adjustment Complete line 13 if you received an Arizona Form 165 Schedule K-1 and line 3 shows a difference between federal and state distributable income. Line 7e – Income or Loss from Real Estate Mortgage Investment Conduits (REMICs) If the difference reported on line 3 of your Form 165 Schedule K-1 is a positive number, enter that difference as an addition on line 13. Enter the total amount of REMIC income or loss reported on your federal Schedule E, Part IV and included in federal adjusted gross income. NOTE: If the difference reported on line 3 of your Form 165 Schedule K-1 is a negative number, enter the difference on 37. Line 7f – Income or Loss from Farm Rental Enter the total amount of farm rental income or loss from federal form 4835 that is reported on your federal Schedule E, Part V and included in federal adjusted gross income. 5 Arizona Form 140-SBI Line 14 - Total Federal Depreciation • Enter the total amount of depreciation deducted on your federal return. If you make an entry here, you should also take a subtraction on line 37. To figure how much you should subtract, see the instructions for line 37. • Line 15 - Net Capital (Loss) from Exchange of One Kind of Legal Tender for Another Kind of Legal Tender • • NOTE: Only claim the addition on this return if the net capital loss to which the addition relates to the Arizona Small Business Income Tax Return. You computed your tax for that prior year under Arizona's claim of right provisions. A net operating loss or capital loss was established due to the repayment made in the prior year. You are entitled to take that net operating loss or capital loss carryover into account when computing your 2023 Arizona taxable income. The amount of the loss carryover included in your federal income is more than the amount allowed to be taken into account for Arizona purposes. Include the amount by which the loss carryover included in your federal adjusted gross income is more than the amount allowed for the taxable year under Arizona law. To determine if you are required to make this addition to income, you must net all gains and (losses) from all exchanges of one kind of legal tender for another kind of legal tender, including amounts shown on Form 165 Schedule K-1, Form 120S Schedule K-1, and Form 141AZ Schedule K-1. Line 18 – Agricultural Water Conservation Expenses Related to the Tax Credit claimed on Arizona Form 312 If you claiming a credit on Arizona Form 312 on Form 301-SBI, enter the amount expenses related to the tax credit claimed. See Credit Form 312 for more information. Enter the amount of any net capital (loss) included in line 6 for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. Line 19 – Addition to S Corporation Income Due to Claiming Pass-Through Credit on Form 312 NOTE: If the amount from all sources results in a net capital gain from the exchange of one kind of tender for another kind of tender, enter that amount on line 36. Shareholders of an S Corporation who claim a credit passed through from an S corporation on Form 301-SBI must make an addition to income for the amount of expenses disallowed by reason of claiming the credit. An S Corporation that passes the credit through to its shareholders must notify each shareholder of their pro rata share of the adjustment. You must include an amount on this line when claiming the Agricultural Water Conservation System Credit (Form 312). See Credit Form 312 for more information. For the purposes of this paragraph: "Legal tender" means a medium of exchange, including specie that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues. "Specie" means coins having precious metal content. Line 16 – Claim of Right Adjustment for Small Business Amounts Repaid in 2023 Line 20 - Depreciation or Amortization Related to the Tax Credits Claimed on Arizona Forms 315 and 325 NOTE: For lines 16, 17 and 23; if the income required to be paid back under the claim of right is the type of income that would be included in lines 4 through 9 if the income was reported in 2023, make this adjustment here. All other claim of right adjustments should be made on 140 return, page 5. If you claimed these tax credits, you must adjust your depreciation or amortization computed under the internal revenue code with respect to property for which a credit was taken under either section 43-1081.01 (Form 325) or for pollution control equipment for which a credit was taken on before taxable year 2022 (Form 315) that exceeds the amount of depreciation or amortization computed pursuant to the internal revenue code on the Arizona adjusted basis of the property. You must make an entry here if all of the following apply: • During 2023, you were required to repay amounts held under a claim of right. • The amount required to be repaid during 2023 was more than $3,000. • You took a deduction for the amount repaid on your 2023 federal income tax return. Line 21 - Basis Adjustment for Property Claimed as a Credit on Form 338 that is Sold or Disposed of During the Tax Year If you claim this credit for an investment in a qualified small business, you must adjust your basis in the investment by the amount of the credit claimed. You must report this difference in basis on the Arizona return that you file for the taxable year in which you sell or otherwise dispose of the investment. If you sold or otherwise disposed of the investment during the taxable year, include the amount by which the adjusted basis computed under the IRC with respect to that property exceeds the adjusted basis of the property computed under A.R.S. § 43-1074.02. If the above apply, include the amount deducted on your federal income tax return. For more information on the Arizona claim of right provisions, see the department’s procedure, ITP 16-1, Procedure for Individuals Who Restore Substantial Amounts Held under a Claim of Right. Line 17 – Claim of Right Adjustment for Small Business Amounts Repaid in Prior Years You must make an entry here if all of the following apply: • During a year prior to 2023, you were required to repay small business income amounts held under a claim of right. 6 Arizona Form 140-SBI Line 27 – Credit for Motion Picture Production Costs (Form 334) If you are claiming a credit on Form 334, Credit for Motion Picture Production Costs, you must make an adjustment (addition) to your Arizona gross income for the amount of any motion picture production costs that was deducted pursuant to the Internal Revenue Code (IRC) for which a tax credit is claimed on Form 334. Line 22 - Basis Adjustment for Property Claimed as a Credit on Forms 315 and 325 that is Sold or Disposed of During the Tax Year You must make an adjustment for the amount by which the adjusted basis computed under the internal revenue code with respect to property for which a credit was claimed under section 43-1081 (Form 315) or 43-1081.01 (Form 325) for which a credit was taken before taxable year 2022 and that is sold or otherwise disposed of during the taxable year exceeds the adjusted basis of the property computed under section 43-1081 (Credit 315) or 43-1081.01 (Credit 325). If you received a pass-through credit from a partnership, LLC or S Corporation, you must also add-back your pro-rated expenses shown on your Form 334-P, Line 4b and/or Form 334-S, line 4b, provided by the pass-through entity. Line 23 - Adjustment for Net Operating Loss due to Claim of Right Line 28 - Subtotal Add lines 10 through 27. Enter the total You must add-back the adjustment for any net operating loss previously claimed that is related to the amount of your claim of right reported. Subtractions from Income Lines 29 through 32 Line 24 – Americans with Disabilities Act – Access Expenditures NOTE: For lines 29-32; only include capital gains or (losses) on these lines if the capital gain or (loss) was included in line 6. If a subtraction is taken on line 50, for the full amount of eligible business access expenditures paid or incurred during the taxable year to comply with the Americans with Disabilities Act of 1990 or A.R.S Title 41, chapter 9, article 8; you must make an addition to Arizona gross income for any amount that is included in the computation of federal adjusted gross income for the current year, plus any federally amortized amounts. NOTE: If you enter an amount on line 29, you must complete lines 30 and 31. If you are taking a subtraction on line 33 for any net long-term capital gain from assets acquired after December 31, 2011, you must also complete line 32. If you do not complete lines 29 through 32, you cannot take the subtraction on line 33. Line 25 - Entity-Level Income Tax Payment You may subtract 25% (.25) of any net long-term capital gain included in your federal Schedule D from small business income and included in line 6 that is derived from an investment in an asset acquired after December 31, 2011. If you are claiming the income tax credit on Form 355, Credit for Entity-Level Income Tax Paid on Your Behalf from a Partnership and/or an S Corporation, you must add the amount deducted by the partnership and/or S Corporation for the amount of Arizona income tax paid on your behalf in 2023. Complete the Worksheet for Net Long-Term Capital Gain Subtraction for Assets Acquired after December 31, 2011, at the end of these instructions to determine the allowable subtraction. Keep the worksheet for your records. Enter the total amount of tax paid shown on: • • Arizona Form 165, Schedule K-1, Part 5, lines 10 and 11. Arizona Form 120S, Schedule K-1, Part 5, lines 9 and 10. NOTE: If you do not have any net capital gain or (loss) to report, enter zero, “0” on lines 29-32. NOTE: Enter the tax amount actually paid by the Partnership or S Corporation in 2023. Tax amounts paid in 2024 for tax year 2023 will be added-back on your 2024 tax return. These payments include any 4th QTR estimated taxes paid in January 2024 and any 2024 tax payments made with the Entity’s tax return on your behalf. Line 29 - Total Net Capital Gain or (Loss) Enter the amount included in line 6. Line 30 - Total Net Short-Term Capital Gain or (Loss) Enter the total amount of net short-term capital gain or (loss) included in line 6 Line 26 - Sole Proprietorship loss of an AZ Nonprofit Medical Marijuana Dispensary included in Schedule C. NOTE: If you are not required to report dividend distributions and/or short-term capital gains from mutual funds on federal Form Schedule D, do not include the short-term capital gain distributed by the mutual fund on line 30. If you are registered as an Arizona sole proprietorship with the Arizona Department of Health Services to operate in this state as a nonprofit medical marijuana dispensary, you are required to add the amount of the loss from the dispensary that is included in the computation of your federal adjusted gross income. Include the amount of the loss. Line 31 - Total Net Long-Term Capital Gain or (Loss) Enter the total amount of net long-term capital gain or (loss) reported included in line 6. If your net long-term capital gain (loss) is limited to an amount reported on Form 1099-DIV and you were not required to complete federal Schedule D, enter the amount shown on Form 1099-DIV on line 31. NOTE: If the Arizona nonprofit medical marijuana dispensary is registered with the Arizona Department of Health Services as anything other than a sole proprietorship, this addition does not apply. 7 Arizona Form 140-SBI Line 32 - Net Long-Term Capital Gain from Assets Acquired After December 31, 2011 NOTE: If the amount reported on line 3 of your Arizona Form 141AZ Schedule K-1 is a positive number, enter that amount on line 11. NOTE: Only include net long-term capital gains on this line if it can be verified that the small business income asset was acquired after December 31, 2011. If the date of acquisition cannot be determined, the asset is considered to have been acquired before January 1, 2012. For purposes of this line, an asset acquired by gift or inheritance is considered acquired on the date it was acquired by the gift-giver or the deceased individual. Line 35 - Net Capital Gain from Investment in an Arizona Qualified Small Business To take the subtraction for a net capital gain from investment in an Arizona qualified small business, you must net all gains and (losses) from investments in Arizona qualified small businesses including amounts shown on Forms 165 Schedule K-1 120S Schedule K-1, and/or 141AZ, Schedule K-1. If you completed the worksheet at the end of these instructions, enter the amount from line 5 of the worksheet. You may subtract the amount of any net capital gain included in federal adjusted gross income (Schedule D) for the taxable year derived from investment in a qualified small business as determined by the Arizona Commerce Authority (ACA) pursuant to A.R.S. § 41-1518. If you did not complete the worksheet and you have no net longterm capital gain from assets acquired after December 31, 2011, enter zero, “0”. Line 33 - Net Long-Term Capital Gain Subtraction From Income for Assets Acquired After December 31, 2011. To qualify for this subtraction, your investment in the qualified small business must have been made after the ACA certified the company as a qualified small business and before the company’s certification expiration date. An investment made prior to certification or after the expiration of certification does not qualify for this subtraction. See the ACA’s website, Small Business Incentives: Angel Investment, for a list of certified businesses and their certification dates. Multiply the amount on line 32 by 25% and enter the result. CAUTION: If you take a subtraction for the net capital gain derived from investment in a qualified business (line 35) or the net capital gain from the exchange of one kind of legal tender for another kind of legal tender (line 36 ), that includes any long-term capital gain from an investment made after December 31, 2011, you cannot include that portion in your computation of the allowable subtraction on line 33 for any net long-term capital gain from assets acquired after December 31, 2011, and included in line 6. For more information, see the worksheet at the end of these instructions. On line 35, enter the amount of the allowable subtraction. Line 36 - Net Capital Gain from the Exchange of One Kind of Legal Tender for Another Kind of Legal Tender To take this subtraction you must net all gains and (losses) from all exchanges of kind of legal tender for another kind of legal tender including amounts shown on Forms 165 Schedule K-1, 120S Schedule K-1, and/or 141AZ, Schedule K-1. NOTE: 1099-DIV: If Form 1099-DIV did not include the acquisition date of each asset sold within the fund, you cannot verify that the long-term capital gain was from an asset acquired by the Fund was after December 31, 2011, for the purpose of the allowable subtraction on line 33. In this case, you may want to contact the Fund Administrator and request to obtain the acquisition date of each asset sold within the fund. If the Administrator does not provide you with the specific date(s), then those assets cannot be included on line 32. Enter the amount of any net capital gain included in line 6 for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. NOTE: If the amount from all sources results in a net capital (loss) from the exchange of one kind of tender for another kind of tender, enter that amount on line 15. 1099-B: Form 1099-B generally includes your purchase date of the fund including acquisition dates of assets included in your portion of the fund when reporting short-term or long-term capital gains or (losses). In this case, you would know the specific date the asset was acquired and those assets may be included on line 32. For the purposes of this subtraction: Line 34 – Fiduciary Adjustment (Negative) from Arizona Form 141AZ K-1 Line 37 - Recalculated Arizona Depreciation "Legal tender" means a medium of exchange, including specie that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues. "Specie" means coins having precious metal content. NOTE: For more information and examples of how to calculate Arizona bonus depreciation, see the department’s procedure, ITP 16-2, Procedure for Individuals who Claim Federal and/or Arizona Bonus Depreciation. A fiduciary uses Form 141AZ Schedule K-1 to report to you your share of the fiduciary adjustment from the trust or estate. Line 3 of Form 141AZ Schedule K-1 shows your share of the fiduciary adjustment from the estate or trust. If the amount reported on line 3 of your Arizona Form 141AZ Schedule K-1 is a negative number, enter the amount on line 34. For assets placed in service in taxable years beginning before December 31, 2012, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable 8 Arizona Form 140-SBI year, calculated as if you had elected not to claim bonus depreciation for eligible properties for federal purposes. any amount received from an IRA that invests in U.S. Government obligations. These amounts are not interest income. For details, see the department’s rulings, ITR 96-2, Pension Plan Distributions Derived from Investment in U.S. Government Obligations; and ITR 96-3, Distributions Comprised of Income Earned by the IRA. For assets placed in service during taxable years beginning from and after December 31, 2012 through December 31, 2013, the amount of the subtraction for these assets depends on the method used to compute the depreciation for these assets. Line 40 - Net Operating Loss Adjustment For Losses incurred in 2008 or 2009 For assets placed in service in taxable years beginning from and after December 31, 2013 through December 31, 2015, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable year, calculated as if the bonus depreciation is 10% (.10) of the amount of federal bonus depreciation pursuant to IRC § 168(k). Arizona did not adopt the special federal net operating loss rules for losses incurred during 2008 or 2009. For Arizona purposes, you must deduct a net operating loss as if the loss was computed under IRC §172 in effect prior to the enactment of those special rules. If you made an election to deduct your 2008 or 2009 federal net operating loss under IRC § 172(b)(1)(H), you may have to enter an amount here. Figure how much of the net operating loss carry forward would have been allowed as a deduction on your 2023 federal income tax return, if the election described in IRC § 172(b)(1)(H) had not been made in the year of the loss. Enter the amount that exceeds the actual net operating loss carry forward that was deducted in arriving at federal adjusted gross income. For assets placed in service in taxable years beginning from and after December 31, 2015 through December 31, 2016, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable year, calculated as if the bonus depreciation is 55% (.55) of the amount of federal bonus depreciation pursuant to IRC § 168(k). For assets placed in service in taxable years beginning from and after December 31, 2016, enter the total amount of depreciation allowable pursuant to IRC § 167(a) for the taxable year, calculated as if the bonus depreciation had been the full amount (100%) of federal bonus depreciation pursuant to IRC § 168(k). NOTE: This subtraction applies to only those individuals who made an election under the special federal net operating loss rules for 2008 and 2009. Under the special rules for 2008 and 2009, you could have elected to carry the net operating loss back for 3, 4 or 5 years, instead of the normal 2 years. This election would have been allowed under IRC § 172(b)(1)(H) as amended by the American Recovery and Reinvestment Act of 2009 or the Worker, Homeownership, and Business Assistance Act of 2009. Add all of the amounts together and enter the total on line 37. Line 38 – Partnership Income Adjustment) Use this adjustment if you received an Arizona Form 165 Schedule K-1, line 3 that shows a difference between federal and state distributable income. Line 41 - Agricultural Crops Given to Arizona Charitable Organizations If the difference reported on line 3 of your Arizona Form 165 Schedule K-1 is a negative number, enter that difference on line 38. Do not include a minus sign or use parentheses. Arizona law allows a subtraction for qualified crop gifts made during 2023 to one or more charitable organizations. To take this subtraction, all of the following must apply: • You must be engaged in the business of farming or processing agricultural crops. • The crop must be grown in Arizona. • You made your gift to a charitable organization located in Arizona that is exempt from Arizona income tax. NOTE: If the difference reported on line 3, of your Arizona Form 165 Schedule K-1, is a positive number, enter that amount on line 13. Line 39 - Interest on U.S. Obligations Enter the amount of interest income from U.S. Government obligations included as income on your federal return. U.S. Government obligations include obligations such as savings bonds and treasury bills. You cannot deduct any interest or other related expenses incurred to purchase or carry the obligations. If such expenses are included in your Arizona gross income, you must reduce the subtraction by such expenses. The subtraction is the larger of the wholesale market price or the most recent sale price for the contributed crop. The amount of the subtraction cannot include any amount deducted pursuant to IRC § 170 with respect to crop contribution that exceeds the cost of producing the contributed crop. To determine if your crop gift qualifies for this subtraction, see the department’s procedure, ITP 12-1, Establishing an Income Tax Subtraction for Agricultural Crops Contributed to Charitable Organizations. Line 42 – Installment Sale Income from Another State Taxed by the Other State in a Prior Year You may subtract income from an installment sale if both of the following apply: If you are itemizing deductions on your Arizona return, you must exclude such expenses from the amount deducted. NOTE: Do not subtract interest earned on Fannie Mae (FNMA) or Ginnie Mae (GNMA) bonds since this interest is taxable by Arizona. For details, see the department's ruling, ITR 06-1, Obligations of the United States Government, Federal Agencies, and United States Territories. Do not subtract any amount received from a qualified pension plan that invests in U.S. Government obligations. Do not subtract • 9 The income from the sale is included in Arizona Small Business Gross Income (line 10) in 2023. Arizona Form 140-SBI • total amount of ordinary and necessary expenses reported on Arizona Schedule DFE, Disallowed Federal Expense Schedule for Marijuana Establishments, line 16. Include this schedule with your tax return, when filed. Do not include Cost of Goods Sold or any other expenses already allowed to be deducted on your federal return in the total amount of expenses reported on this line. You paid income tax to another state on that income in a prior tax year. Include the amount of such income that you included in your Arizona Small Business gross income for 2023. Do not include any amount that is subject to tax by both Arizona and another state in 2023. In this case, you may be eligible for a tax credit. See Arizona Form 309-SBI for details. Line 43 – Basis Adjustment for Property Sold or Otherwise Disposed on During the Tax Year For small business property that is sold or otherwise disposed of during the taxable year by a taxpayer who has complied with the requirement to add back all depreciation for that property on tax returns for all taxable years beginning from and after December 31, 1999, include the amount of depreciation that has been allowed pursuant to IRC § 167(a) to the extent that the amount has not already reduced Arizona taxable income in the current or prior years. (Note: The practical effect of this is to allow a subtraction for the difference in basis for any asset for which bonus depreciation has been claimed on the federal return.) Line 44 – Claim of Right Adjustment for Amounts Repaid in Prior Years You may subtract the income required to be paid back under the claim of right that is included in lines 4 through 9 if the income were reported in 2023. Line 45 - Sole Proprietorship Income of an Arizona Nonprofit Medical Marijuana Dispensary Included in Federal Adjusted Gross Income • NOTE: If the Arizona nonprofit medical marijuana dispensary is registered with the Arizona Department of Health Services as anything other than a sole proprietorship, this subtraction does not apply. If you received any of the above federal tax credits for 2023, include the portion of wages or salaries you paid or incurred during the taxable year equal to the amount of those federal tax credits you received. If you are registered as an Arizona sole proprietorship with the Arizona Department of Health Services to operate in this state as a nonprofit medical marijuana dispensary, you may subtract the amount of the income from the dispensary that is included in the computation of your federal adjusted gross income. Line 49 - Exploration Expenses Deferred before January 1, 1990 NOTE: Sole Proprietors and disregarded LLCs must contact the Arizona Department of Health Services (ADHS) to make the election to operate on a for-profit basis. Line 47 - S Corporation Shareholders – Marijuana Establishment, Testing Facilities and Dual Licensees that Elected to Operate on a For-profit Basis Enter the amount of your pro-rata share of ordinary and necessary expenses related to the sales of recreational use products as shown on your Form 120S Schedule K-1, line 7. Line 48 – Amount of Wages or Salaries Paid or Incurred During the Tax Year and Used to Claim Certain Federal Tax Credits You may subtract some expenses that you cannot deduct on your federal return when you claim certain federal tax credits. These federal tax credits include the following: • • • the Federal Work Opportunity Credit; the Empowerment Zone Employment Credit; the credit for employer-paid social security taxes on employee cash tips; and the Indian Employment Credit. Call one of the numbers on page 1 of these instructions if you deferred exploration expenses determined under IRC § 617 in a taxable year ending before January 1, 1990, and you have not previously taken a subtraction for those expenses. Line 50 – Americans with Disabilities Act – Access Expenditures A subtraction is allowed for eligible business access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with Disabilities Act of 1990 or A.R.S. Title 41, chapter 9, article 8 by retrofitting developed real property that was originally placed in service at least ten years before the current taxable year. (A.R.S. §§ 43-1022 and 43-1024) In addition, a sole proprietorship of an Arizona dual licensee that has not elected to operate on a for-profit basis may subtract the portion of income included in federal adjusted gross income that is from the medical marijuana portion of the business. NOTE: A dual licensee that elects to operate on a for-profit basis does not qualify for a subtraction for the medical marijuana portion of their business. Line 46 - Sole Proprietorship – Marijuana Establishment, Testing Facilities and Dual Licensees that Elected to Operate on a for-profit Basis A sole proprietorship that takes the allowable subtraction for the income of an Arizona Nonprofit Medical Marijuana Dispensary (NMMD) under item “L”, cannot take this allowable subtraction. A Sole Proprietorship or disregarded LLC that operates a marijuana establishment, marijuana testing facility, or dual licensee that elects to operate on a for-profit basis, enter the “Eligible business access expenditures” include reasonable and necessary amounts paid or incurred to do any of the following: • Remove any barriers that prevent a business from being accessible to or usable by individuals with disabilities. • Provide qualified interpreters or other methods of making audio materials available to hearing-impaired individuals. 10 Arizona Form 140-SBI • • • Line 54 - Small Business Income Tax Multiply line 53 by 2.5% (.025) and enter the result. Line 55 - Tax From Recapture of Credits From Arizona Form 301-SBI Enter the amount of tax due from recapture of the credits from Arizona Form 301-SBI, Part 2, line 24. Provide qualified readers, taped texts, and other effective methods of making visually delivered materials available to individuals with visual impairments. Acquire or modify equipment or devices for individuals with disabilities. Provide other similar services, modifications, materials, or equipment. Line 56 – Subtotal of Tax NOTE: A taxpayer who has been cited for noncompliance with the Americans with Disabilities Act of 1990 or A.R.S. Title 41, chapter 9, article 8 by either federal or state enforcement officials is ineligible for a subtraction under this section for any expenditure required to cure the cited violation. Add lines 54 and 55. Enter the total. Line 57 - Nonrefundable Credits from Arizona Form 301-SBI Complete line 57 if you claim any of the following credits. Also make sure that you complete and include Form 301-SBI and the appropriate credit form or forms with your return. Line 51 – Virtual Currency and Non-Fungible Tokens To the extent not already excluded from Arizona gross income under the internal revenue code, the value of virtual currency and non-fungible tokens the taxpayer received pursuant to an airdrop at the time of the airdrop. This paragraph may not be interpreted as providing a subtraction for any appreciation in value that occurs from holding the virtual currency after the initial receipt of the airdrop. Credit for Increased Research Activities - Individuals You may qualify for this credit if you incurred qualified research expenses for research conducted in Arizona. Use Form 308-I to figure this credit. Be sure to include only the nonrefundable portion on Form 140-SBI, line 57. Credit for Taxes Paid to Another State or Country You may qualify for this credit if you paid tax to Arizona and another state or country on the same income. Use Form 309-SBI to figure your credit. For the purpose of this subtraction, A.R.S. § 43-1028 defines the following: • • • • Airdrop as the receipt of virtual currency through a means of distribution of virtual currency to the distributed ledger addresses of multiple taxpayers. Non-fungible tokens (NFT) as a non-fungible cryptographic asset on a blockchain that possesses unique identifiers or other metadata that distinguishes the asset from another token or asset in a manner that makes the asset irreplaceable and non-exchangeable for a similar token or asset. Agricultural Water Conservation System Credit You may qualify for this credit if you incurred expenses to purchase and install an agricultural water conservation system in Arizona. Use Form 312 to figure this credit. Pollution Control Credit This credit was repealed for individual taxpayers for tax years beginning from and after December 31, 2021. All credits that were properly established can be carried forward for the respective five year carry forward period. Use Form 315 to figure this credit. Virtual currency as a digital representation of value that functions as a medium of exchange, a unit of account and a store of value other than a representation of the U.S. dollar or a foreign currency. Agricultural Pollution Control Equipment Credit You may qualify for this credit if you are involved in commercial agriculture and incurred expenses to purchase tangible personal property that is primarily used in your trade or business to control or prevent pollution. Use Form 325 to figure this credit. Credit for Donation of School Site You may qualify for this credit if you donated real property and improvements to a school district or a charter school for use as a school or as a site for the construction of a school. Use Form 331 to figure this credit. Credit for Employing National Guard Members You may qualify for this credit if you are an employer who has an employee that is a member of the Arizona National Guard if the employee is placed on active duty. Use Form 333 to figure this credit. Foreign currency as the coin and paper money of a country other than the United States that is designated as legal tender, circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Line 52 - Gas Fees or Non-Fungible Token Basis The amount allowed as a subtraction by section 43-1028 for gas fees not already included in the taxpayer's virtual currency or non-fungible token basis. For the purpose of this subtraction, A.R.S. § 43-1028 defines the following: Gas Fees as a fee paid to the operator of a virtual network for the use of the network to facilitate the purchase, sale or exchange of virtual currency or an NFT. Line 53 - Arizona Small Business Taxable Income Subtract lines 33 through 52 from line 28. If less than zero, enter “0”. • Credit for Business Contributions by an S Corporation to School Tuition Organizations Individual S corporations that make qualifying contributions of $5,000 or more may pass-through the credit to its individual shareholders on a pro rata basis. See Form 335-I for more information. 11 Arizona Form 140-SBI Line 58 - Balance of Tax Subtract line 57 from line 56. If line 57 is greater than line 56, enter "0". Line 59 – (Boxes 59a and 59b and Line 59c) 2023 Estimated Tax Payments and Claim of Right Box 59a: Enter the amount of 2023 small business income estimated tax payments made for tax year 2023. Box 59b: If you completed an Arizona Claim of RightIndividual tax form, enter the amount from line 8. If you completed more than one claim of right form for the current taxable year, add all amounts on line 8 and enter the total in box 59b. Credit for Solar Energy Devices - Commercial and Industrial Applications The credit for installed solar energy devices for commercial, industrial, or other nonresidential applications located in Arizona has expired. All credits that were properly established can be carried forward for the respective five year carry forward period. Use Form 336 to figure this credit. Credit for Investment in Qualified Small Businesses You may qualify for this credit if you made an investment in a qualified small business. Use Form 338 to figure this credit. Credit for Business Contributions by an S Corporation to School Tuition Organizations for Displaced Students or Students with Disabilities – Individual S corporations that make qualifying contributions of $5,000 or more may pass-through the credit to its individual shareholders on a pro rata basis. See Form 341-I for more information. NOTE: For more information on Arizona's claim of right provisions, see the department’s procedure, ITP 16-1, Procedure for Individuals Who Restore Substantial Amounts Held Under a Claim of Right. Renewable Energy Production Tax Credit You may qualify for this credit if you produced electricity using a qualified energy resource. Use Form 343 to figure this credit. Credit for New Employment You may qualify for this credit if your business had a net increase in qualified employment positions. Use Form 345 to figure this credit. Additional Credit for Increased Research Activities for Basic Research Payments You may qualify for this credit for qualified basic research payments for research conducted in Arizona. Approval by the Department of Revenue is required prior to claiming this credit. Use Form 346 to figure this credit. Healthy Forest Production Tax Credit You may qualify for this tax credit if you meet all of the qualifications or receive a pass-through credit from a partnership or S Corporation. All credits that were properly established can be carried forward for the respective five year carry forward period. Use Form 353 to
Extracted from PDF file 2023-arizona-form-sbi-booklet.pdf, last modified August 2023

More about the Arizona Form SBI Booklet Corporate Income Tax TY 2023

We last updated the Small Business Income Tax Booklet in February 2024, so this is the latest version of Form SBI Booklet, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form SBI Booklet directly from TaxFormFinder. You can print other Arizona tax forms here.


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Other Arizona Corporate Income Tax Forms:

TaxFormFinder has an additional 95 Arizona income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Schedule ACA Schedule ACA - Air Carrier Apportionment
Form 120S Arizona S Corporation Income Tax Return
Form 141AZ Arizona Fiduciary Income Tax Return
Form 343 Renewable Energy Production Tax Credit
Form 165 Arizona Partnership Income Tax Return

Download all AZ tax forms View all 96 Arizona Income Tax Forms


Form Sources:

Arizona usually releases forms for the current tax year between January and April. We last updated Arizona Form SBI Booklet from the Department of Revenue in February 2024.

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About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Arizona Form SBI Booklet

We have a total of three past-year versions of Form SBI Booklet in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2023 Form SBI Booklet

Arizona Booklet: Individual Income Tax Credits

2022 Form SBI Booklet

Arizona Booklet: Individual Income Tax Credits

2021 Form SBI Booklet

Arizona Booklet: Individual Income Tax Credits


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