Arizona Form 2018 Arizona Corporation Income Tax Return 120 For information or help, call one of the numbers listed: o It is not a member of an affiliated group that elected to Phoenix (602) 255-3381 file an Arizona consolidated return. From area codes 520 and 928, toll-free (800) 352-4090 • A corporation that has income from business activity that Tax forms, instructions, and other tax information is taxable entirely within Arizona is a “wholly Arizona corporation.” If you need tax forms, instructions, and other tax information, go to the department’s website at www.azdor.gov. Entity Classification Under the Federal "Check-the- Income Tax Procedures and Rulings Box Rules" These instructions may refer to the department’s income tax The federal tax classification of an entity under the federal procedures and rulings for more information. To view or print "check-the-box rules" determines the entity's classification for these, go to our website and click on Reports & Legal Research Arizona tax purposes. Refer to the department’s ruling, CTR then click on Legal Research and select a document and a 97-1, Federal “Check-The-Box Rules” on Elective Tax category type from the drop down menus. Classification. Publications Limited Liability Companies To view or print the department’s publications, go to our website and click on Reports & Legal Research. Then click on A limited liability company that makes a valid federal election Publications. to be taxed as a corporation must file an Arizona corporate income tax return. A single member limited liability company that is disregarded as an entity is treated as a branch or division General Instructions of the owner, and is included in the tax return of its owner. Which Corporations Must File a Return? Refer to the department’s ruling, CTR 97-2, Limited Liability Companies, for further information. Every corporation subject to the Arizona Income Tax Act of 1978 must file an Arizona corporate income tax return. Electing Small Business Corporations Disaster Relief for Out-of-State Businesses Corporations taxed as S corporations under Subchapter S of the Internal Revenue Code (IRC) must file Form 120S. If an out-of-state business is a separate company and is in Homeowners Associations Arizona on a temporary basis solely for the purpose of performing disaster recovery from a declared disaster during a Homeowners associations that file federal Form 1120-H or disaster period, it may not be required to file, remit, withhold or federal Form 1120 are not exempt from Arizona income tax. pay state or local (income) tax. (See the department’s These associations must file an Arizona corporate income tax return on Form 120A or Form 120. publication, Pub. 720, Disaster Recovery Tax Relief, to determine if the taxpayer qualifies for disaster relief.) Certain homeowners associations are federally tax exempt as If an out-of-state business is part of a unitary group filing a social welfare organizations, or as clubs organized for pleasure combined return, and is in Arizona on a temporary basis solely or recreation. These homeowners associations are similarly tax for the purpose of performing disaster recovery from a declared exempt for Arizona income tax purposes and are not required disaster during a disaster period, it may be allowed to subtract to file an Arizona information return. its income from such activity from the unitary group’s Arizona Taxable Year Covered by Return income. (See the department’s publication, Pub. 720, Disaster Indicate whether the taxable year is a calendar year or a fiscal Recovery Tax Relief, to determine if the taxpayer qualifies for year. If a fiscal year, indicate the taxable year on the top of disaster relief.) page 1 of the return. Which Form To Use .Records Complete Form 120 if the corporation: Every corporation should maintain books and records • Has income from business activity that is taxable in more substantiating information reported on the return and keep than one state (a “multistate corporation”); these documents for inspection. See the department’s ruling, • Is a partner in: GTR 96-1, Electronic Data Processing, for more information o A multistate partnership: and/or about record retention requirements. A partnership that conducts no business in Arizona; o IRC § 7519 Required Payments • Is a member of a unitary group of corporations that files an Arizona return on a combined basis; or Taxpayers cannot deduct the federal required payments on their • Is a member of an affiliated group of corporations that Arizona tax returns as an ordinary and necessary business expense or otherwise. elects to file an Arizona consolidated return. The only type of corporation that may use Arizona Form 120A Treatment of Installment Obligations When is one that files its return on a separate company (separate Corporate Activities Cease entity) basis and is a “wholly Arizona corporation.” A corporation may elect to report income from the sale or other • A corporation files on a separate company (separate entity) disposition of property on the installment method. If the basis if: corporation fails to report the entire amount from the sale o It is not part of a group of corporations comprising a before it ceases to be subject to Arizona corporate income tax, unitary business; and Arizona Form 120 it must report the remaining income in the last year in which it o You must pay 90% of your tax liability (including the is subject to Arizona corporate income tax. $50 minimum tax) by the original due date of your This provision does not apply if a reorganization transfers the return. installment obligation to another taxpayer subject to Arizona o The department imposes the extension underpayment tax. The transferee may not use its capital losses to offset penalty on any late or underpaid extension requests. income from the installment obligation transferred to it. • See the department’s ruling, CTR 01-3, Extensions, for Rounding Dollar Amounts additional information • Mail the extension request to the address shown on the Taxpayers must round amounts to the nearest whole dollar. If form. 50 cents or more, round up to the next dollar. If less than 50 cents, round down. Timely Filing of Returns: • The department determines the timeliness of a tax return Extension of Time to File a Return: by the postmark or other official mark of the United States • A request for an extension of time to file an Arizona Mail stamped on the envelope in which the return is corporate income tax return must be submitted by the mailed. See the department’s ruling, GTR 16-1, Timely original due date of the return. Filing of Income or Withholding Tax Returns Through the • The department may grant an extension request for a United States Mail. maximum of six months. • The department will accept proof of mailing from a private • The extension request can be made by filing an Arizona delivery service included in the Internal Revenue Service extension request, Form 120EXT. (IRS) list of designated private delivery services. Contact • The department will also accept a valid federal extension the private delivery service for information regarding how for the same period of time covered by the federal to obtain written proof of mailing. extension. The length of time for an automatic federal • If the due date for the return falls on a Saturday, Sunday, extension for a C corporation is: or a legal holiday, the return is considered timely filed if it o Seven months for taxable (fiscal) year end dates of is post-marked the next business day. See the June 30. department’s ruling, GTR 16-2, Timely Filing of Income or • June 30 Fiscal Year Filer – Federal Extension Withholding Tax Return – Holidays and Weekends. Company Y, a June 30 fiscal year end taxpayer, Filing Original Returns: requested a federal extension for its taxable year th ending 06/30/2019. The federal extension will extend • Returns are due by the 15 day of the fourth month its Arizona due date of October 15, 2019, to May 15, following the close of the taxable year. 2020. (A period of 7 months.) • If the taxpayer has a valid federal or Arizona filing • June 30 Fiscal Year Filer – Arizona Extension extension, the return is due by the extended due date. See The same taxpayer, Company Y, requested an Arizona the examples in “Extension of Time to File a Return” to extension for its taxable year ending 06/30/2019. The determine the extended due date of a return filed using a Arizona extension will extend its Arizona due date of federal extension or an Arizona extension. October 15, 2019, to April 15, 2020. (A period of 6 • If the return is filed under FEDERAL extension, check months.) box 82F on page 1 of the return. • If the return is filed under an ARIZONA extension, do o Six months for all other taxable (calendar or fiscal) NOT check box 82F on page 1 of the return. year end dates. The extended due date will be the • If the due date for the return falls on a Saturday, Sunday, same for the federal extension and the Arizona or a legal holiday, the return is considered timely filed if it extension. is post-marked the next business day. See the • If the original return is filed under extension, do not department’s ruling, GTR 16-2, Timely Filing of Income or include a copy of the extension with your return. Withholding Tax Return – Holidays and Weekends. o If the return is filed under FEDERAL extension, • Please do not submit a copy of your federal return with check box 82F on page 1 of the return your original Arizona income tax return.