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AZ.gov Arizona's Official Web Site
State of Arizona
Department of Revenue

Nexus Unit

If you have any specific questions about business activity or nexus, please contact

  Nexus hotline (602) 716-7083  
or you may send correspondence to :
  Arizona Department of Revenue
Transaction Privilege and
Use Tax
Nexus Section 5th Floor
1600 W. Monroe
Phoenix AZ 85007
Arizona Department of Revenue
Income Tax
Nexus Section 5th Floor
1600 W. Monroe
Phoenix AZ 85007
Definitions :
"Nexus" is the connection required to exist between a state and a potential taxpayer such that the state has the constitutional right to impose a tax. The United States Constitution limits the states’ right to tax through the Due Process Clause and the Commerce Clause
Due Process Clause:
The Due Process Clause of the Fourteenth Amendment requires some definite link, some minimum connection between a state and the person, property, or transaction it seeks to tax. The most minimal connections will satisfy this requirement. The connection need not include physical presence in the state. Due Process also requires that the income attributed to the State for tax purposes must be rationally related to values connected with taxing state. This last requirement is rarely a bar to enforcement of tax
Commerce Clause:
The Commerce Clause of the Constitution (Article 1, Section 8, C13) gives to congress the power to regulate commerce among the states. Therefore, a state may not impermissibly affect interstate commerce without congressional authorization. The U.S. Supreme Court held in Complete Auto Transit (430 US 274 (1976)) that a state does not impermissibly affect interstate commerce if it meets each of four tests:
  1. The taxed activity has a substantial nexus to the taxing state.  
  2. The tax is fairly apportioned among states  
  3. The tax does not discriminate against interstate commerce  
  4. The tax is fairly related to services provided by the taxing state.
The area of greatest confusion in this four-part test is what constitutes "substantial nexus" for purpose of the Complete Auto test. The issue of nexus most commonly arises with regard to either the transaction privilege and use tax or the income tax

Arizona Nexus Brochure & Questionnaire

The purpose of this brochure is to provide general guidance. The brochure is intended to help define the meaning of "nexus" and to provide a general guideline for determining whether nexus exists within the state of Arizona. The law of nexus as explained in this brochure may change due to actions by the United States or Arizona courts, the U.S. Congress or the Arizona legislature.

Publication 623

Questionnaire Regarding Activities in Arizona

Voluntary Disclosure Program

The voluntary disclosure program is available to all businesses that want to come into compliance with Arizona filing requirements. In most instances, this process is initiated by a company’s representative and submitted on an anonymous basis. Terms and conditions are negotiated on an individual, factual basis. For more information - see Voluntary Disclosure.