AZ SB1350

Amends Arizona Revised Statutes section 42-1107 to allow automatic extensions of time for filing income tax returns if at least 90 percent of the tax liability is paid and the extension request is received by the filing deadline.

Imposes a penalty of one-half of one percent of unpaid tax for each 30-day period (or fraction thereof) between the original due date and payment date if less than 90 percent of tax liability is paid, with a maximum combined penalty cap of 25 percent.

Allows taxpayers granted federal income tax filing extensions to automatically receive the same extension for Arizona income tax returns if they pay at least 90 percent of their tax liability.

Extends the filing deadline for corporate and exempt organization returns that receive extensions to seven months after the initial due date, excluding small business corporation returns.

Applies retroactively to taxable years beginning after December 31, 2020.