Ariz. Admin. Code § 15-5-2215

Current through Register Vol. 30, No. 44, November 1, 2024

Section R15-5-2215 - Return and Payment of Estimated Tax

A. For purposes of this rule, the following definitions apply:

1. "Annual estimated tax payment" means 1/2 of the total tax liability for the entire month of May or the total tax liability for the first 15 days of the month of June.

2. "Annual tax liability" means a total tax liability of in the preceding calendar or a reasonable anticipation of a total tax liability in the current year as follows:

$1,000,000 in 2019

$1,600,000 in 2020

$2,300,000 in 2021

$3,100,000 in 2022

$4,100,000 in 2023 and thereafter.

3. "Taxpayer" has the meaning set forth in A.R.S. § 42-5014(S). The following are considered a single taxpayer:

a. Members of an Arizona-affiliated group filing a consolidated corporate income tax return under A.R.S. § 43-947;

b. Corporations in a unitary business filing a combined corporate income tax return under R15-2D-401;

c. Married taxpayers operating separate sole proprietorships and filing a joint income tax return; or

d. Partnerships, Limited Liability Companies, S Corporations, trusts, or estates conducting multiple businesses, filing a single income tax return.

4. "Total tax liability" means the combined total of the transaction privilege tax, telecommunications services excise tax, and county excise tax liabilities.

B. The requirement to make an annual estimated tax payment is based on the annual tax liability. Use tax and severance tax are not subject to the estimated tax provisions.

1. A taxpayer shall make an annual estimated tax payment if during the current calendar year the taxpayer, through use of ordinary business care and prudence, can anticipate incurring the annual tax liability. For example:

ABC Company has been selling home electronics for several years. Its tax liability for previous calendar years has averaged between $600,000 and $700,000. In February of the current year, ABC Company begins selling computers and accessories as well. Early sales reports show an increase in total sales of approximately 50%. Based on these facts, ABC Company can reasonably anticipate incurring the annual tax liability.

2. Taxpayers with multiple locations shall make the annual estimated tax payment based on the combined actual or anticipated annual tax liability from all locations. Taxpayers with multiple locations, shall make a single estimated payment each June.

C. A taxpayer shall not amend an annual estimated tax payment except to increase the amount of the payment.

D. The annual estimated tax payment shall not be applied, credited, or refunded until a Transaction Privilege, Use, and Severance Tax Return for the month of June is filed.

E. Late payment, underpayment, or non-payment of the annual estimated tax payment shall result in the following:

1. Application of the penalty provisions under A.R.S. § 42-1125;

2. Accrual of interest beginning from the due date of the annual estimated tax payment as prescribed in A.R.S. § 42-5014(D); and

3. Loss of the accounting credit, as defined in A.R.S. § 42-5017 for the June reporting period.

F. Taxpayers who are not required to make the annual estimated tax payment but make a voluntary annual estimated payment are not subject to subsection (E).

Ariz. Admin. Code § R15-5-2215

Former Section R15-5-2215 renumbered to R15-5-2004, new Section R15-5-2215 renumbered from R15-5-212effective October 14, 1993 (Supp. 93-4). Amended effective April 8, 1997 (Supp. 97-2). Amended by exempt rulemaking at 25 A.A.R. 3010, effective 10/1/2019.