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Arizona Form 99T

Penalties and Interest

Organizations required to make Arizona corporate estimated

tax payments should use the 2015 Arizona Form 120W,

A. Late Filing Penalty. A return filed after the original due

Estimated Tax Worksheet for Corporations, to compute the

date is subject to the late filing penalty unless the

required installments. R

2015 A

EFER TO THE

RIZONA

ORM

organization has a valid federal or Arizona extension. A

120W

2015

AND ITS INSTRUCTIONS BEFORE COMPLETING THE

return filed after its extended due date is also subject to the

120ES.

RIZONA

ORM

late filing penalty. The late filing penalty is 4.5% (.045) of

the amount of tax required to be shown on the return.

STIMATED

AYMENTS BY

LECTRONIC

UNDS

“Amount of tax required to be shown on the return” is the

Organizations whose Arizona corporate income

RANSFER

amount of tax imposed less the amount of any part of the tax

tax liability for the preceding taxable year was $20,000 or

paid on or before the beginning of the month and the amount

more must make Arizona corporate estimated tax payments

of any credit against the tax which may be claimed on the

via electronic funds transfer. If the organization is making its

return. The penalty period is for each month or fraction of a

estimated tax payments by electronic funds transfer (EFT),

month between the due date of the return and the date the

the organization should not submit Arizona Form 120ES to

organization filed the return. The maximum penalty is 25% of

the department.

the tax found to be remaining due.

Organizations required to make estimated tax payments via

B. Extension Underpayment Penalty. The organization

electronic funds transfer must complete the department's

must pay 90% of the tax liability (less any tax credits)

electronic funds transfer authorization agreement at least 30

disclosed by the organization's return on or before the

days prior to initiation of the first applicable transaction.

original due date of the return. The department imposes the

Organizations whose Arizona corporate income tax liability

extension underpayment penalty on any late or underpaid

for the preceding taxable year was less than $20,000 may

extension payments. The extension underpayment penalty is

elect voluntary participation in the electronic funds transfer

0.5% (.005) of the tax not paid. The penalty period is for each

program. Voluntary participants in the program must

30 day period or fraction thereof between the original due

complete

the

department's

electronic

funds

transfer

date of the return and the date the organization paid the tax.

authorization agreement at least 30 days prior to the first

The maximum penalty is 25% of the unpaid tax.

applicable transaction.

Organizations subject to the extension underpayment penalty

are not subject to the late payment penalty prescribed under

Refer to A.R.S. § 42-1129 and the related Arizona

A.R.S. § 42-1125(D).

Administrative Code rules (A.A.C. R15-10-301 through

R15-10-307) for detailed information regarding electronic

C. Late Payment Penalty. The department imposes the late

funds transfer.

payment penalty on any amount shown as tax on a return that

is not paid by the date prescribed for its payment. “Amount of

NOTE: Organizations required to make estimated payments

tax shown on the return” is the amount of tax imposed shown

via EFT that fail to do so will be subject to a penalty of 5% of

on the return less the amount of any part of the tax paid on or

the amount of the payment not made by EFT. See A.R.S.

before the beginning of the month and the amount of any

§ 42-1125(O).

credit against the tax that may be claimed on the return. The

Extension of Time to File a Return

late payment penalty is 0.5% (.005) of the unpaid tax for each

month or fraction of a month that the tax remains unpaid, not

The organization can apply for an Arizona extension by filing

to exceed 10% of the unpaid tax.

a completed Arizona Form 120EXT by the original due date

of the return. The organization can also use a valid federal

NOTE: If more than one of the penalties described in A, B,

extension, rather than applying for an Arizona extension. The

or C apply, the maximum combined penalty is 25%.

organization must use Arizona Form 120EXT to transmit

Refer to Arizona Corporate Income Tax Ruling CTR 09-1

extension payments via check or money order, whether the

regarding the application of penalties to returns filed under

organization uses a valid federal extension or requests an

extension.

Arizona extension. If the organization uses an extension, the

organization must check the extension box (82F) on page 1 of

D. Interest. The department assesses interest on any portion of

the return.

the tax, whether determined by the department or the

organization, not paid by the date prescribed for its payment.

The department grants an Arizona extension for a period of

The department applies interest, compounded annually, in the

six months. Arizona will accept the federal extension for the

same manner and at the same time as prescribed by IRC § 6621

same period of time as covered by the federal extension.

with the following exception. Exception: The Arizona rate of

Either the Arizona or federal extension provide an extension

interest for both underpayments and overpayments for all

of time to file, but do not provide an extension of time to pay.

taxpayers is the federal underpayment rate under IRC

The organization must pay 90% of the tax liability (less any

§ 6621(a)(2) [the federal short-term rate, determined pursuant

tax credits) by the original due date of the return. The

to IRC § 6621(b), plus three percentage points].

organization's tax liability may be the $50 minimum tax. The

On January 1 of each year, the department adds any interest

department imposes the extension underpayment penalty on

outstanding as of that date to the principal amount of the tax.

any late or underpaid extension payments.

Instructions For Form 99t - Arizona Exempt Organization Business Income Tax Return - 2014 Page 2

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