Arizona Laws 43-1132. Taxpayers liable; exceptions to allocation and apportionment; examination of evidence of income and expenses
A. Any taxpayer having income from business activity which is taxable both within and without this state shall allocate and apportion net income as provided in this article, but net income of a foreign corporation which is not itself subject to the tax imposed by this title shall not be allocated or apportioned to this state.
Terms Used In Arizona Laws 43-1132
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: means a corporation, joint stock company, bank, insurance company, business trust or so-called "Massachusetts trust" investment company or building and loan association and any other association whether incorporated or unincorporated. See Arizona Laws 43-104
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Department: means the department of revenue, the director or the director's authorized delegate, as the context requires. See Arizona Laws 43-104
- Net income: means Arizona taxable income. See Arizona Laws 43-1101
- Property: includes both real and personal property. See Arizona Laws 1-215
- State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Arizona Laws 43-1131
- Tax: means the taxes imposed under this title. See Arizona Laws 43-104
- Taxpayer: means any person subject to the tax imposed by this title. See Arizona Laws 43-1131
- United States: when used in a geographical sense, includes the states, the District of Columbia and the possessions of the United States. See Arizona Laws 43-104
B. For the purposes of computing Arizona taxable income under this title, expenses which are attributable to income of a foreign corporation which is not itself subject to the tax imposed by this title shall not be allocated or apportioned to this state.
C. In the case of an audit performed on a taxpayer by the department, the department may examine any books, papers, records or memoranda of the taxpayer relating to income and expenses of the taxpayer both within and without the United States. The information provided by the taxpayer is subject to Title 42, Chapter 2, Article 1.
D. Subsections A and B of this section do not apply to a taxpayer that has elected to file a consolidated return pursuant to section 43-947. An Arizona affiliated group, as defined in section 43-947, that has income from business activity that is taxable both in and outside this state shall allocate and apportion its net income as provided by this article.
E. The net income of a taxpayer that would otherwise meet the requirements of 15 United States Code §§ 381 through 384 but that is subject to the tax imposed by this title solely because of the presence of consignment inventory in this state shall not be allocated or apportioned to this state if all of the following conditions are met:
1. The presence of the consignment inventory is a requirement of the taxpayer’s contract with its customer.
2. The consignment inventory is located on the customer’s property.