Arizona no longer allows corporate taxpayers or pass-through entities to claim the Agricultural Pollution Control Equipment Credit for tax years beginning after December 31, 2021. However, individual taxpayers may still be allowed the credit, equal to 25% of the cost of the property, if properly established under Arizona law before the repeal. Taxpayers with unused credits may continue to claim carryforward amounts for the remainder of the applicable five-year carryforward period.
Key Details
- Credit Availability:
- Not available to corporate taxpayers or as a pass-through to corporate partners for tax years beginning after December 31, 2021.
- Individual taxpayers may still claim the credit equal to 25% of the cost of qualifying agricultural pollution control equipment, if established before the repeal.
- Carryforward: Unused credits properly established before the repeal may be carried forward for the remainder of the applicable five-year carryforward period.
- Form Used: Form 315 (Credit for Agricultural Pollution Control Equipment) was previously used to claim the credit and remains the applicable form for reporting any allowable carryforward.
- Adjustment to Income: If a taxpayer previously claimed this credit, an addition to Arizona income may be required if the federal depreciation or amortization deduction exceeds the depreciation or amortization computed using the Arizona adjusted basis of the property.
Source:
Form 140 (Arizona Individual Income Tax Return)
Arizona Form 315 Instructions (Credit for Agricultural Pollution Control Equipment)
Disclaimer: Always verify with the current year’s Arizona Department of Revenue (AZDOR) forms and instructions, as tax rules may change. For complex situations, consult a CPA or tax professional.