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Arizona Form
2021 Agricultural Pollution Control Equipment Credit 325

For information or help, call one of the numbers listed: addition to, or reconstruction, replacement, or
Phoenix (602) 255-3381 improvement of that property.
From area codes 520 and 928, toll-free (800) 352-4090 Amounts that qualify for the credit must be includible in
Tax forms, instructions, and other tax information the individual taxpayer's adjusted basis for the property. The
If you need tax forms, instructions, and other tax information, adjusted basis of any property for which the taxpayer has
go to the department’s website atwww.azdor.gov. claimed a credit must be reduced by the amount of credit
Income Tax Procedures and Rulings claimed for that property.
These instructions may refer to the department’s income tax If the allowable tax credit exceeds the taxes otherwise due or,
procedures and rulings for more information. To view or if there are no taxes due, the amount of the credit not used to
print these, go to our website and select Reports & Legal offset taxes may be carried forward for not more than five
Research from the main menu, then click on Legal Research taxable years as a credit against subsequent years' income tax
and select a Document Type and a Category from the drop liabilities.
down menus. NOTE – To claim this credit:
Publications • Individual taxpayers that did not make the Small
To view or print the department’s publications, go to our Business Income election: Complete this credit form and
website, select Reports & Legal Research from the main Arizona Form 301, Nonrefundable Individual Tax
menu, and click on Publications in the left hand column. Credits and Recapture. Include both completed forms
with your Individual Income Tax Return, (Form 140,
General Instructions 140PY, 140NR, or 140X).
Arizona Revised Statutes § 43-1081.01 provide • Individual taxpayers that made the Small Business
nonrefundable individual income tax credits for expenses that Income election: Complete this credit form and Arizona
a taxpayer incurred during the taxable year to purchase Form 301SBI, Nonrefundable Individual Tax Credits and
Recapture for Form 140-SBI, 140PY-SBI, 140NR-SBI,
agricultural pollution control equipment. and 140X-SBI. Include both completed forms with your
NOTE: Taxable year 2019 was the last year a corporate SBI Tax Return (Form 140-SBI, 140PY-SBI, 140NR-SBI,
taxpayer could claim this credit. S Corporations may not or 140X-SBI).
claim this credit at the corporate level or pass it through to • A partnership may pass this credit through to its
its shareholders. A partnership may not pass this credit individual partners: Complete this credit form and Form
through to its corporate partners; it may, however, pass this 325-P for each individual partner of the partnership.
credit through to its individual partners. Provide each individual partner a copy of his or her
\
The amount of the credit is equal to 25% of the cost of the completed Form 325-P. Include Form 325 and one copy
property. The maximum credit that a taxpayer may claim in a of each completed Form 325-P with your tax return.

taxable year is $25,000.
The Agricultural Pollution Control Equipment Credit claimed Specific Instructions

on Form 325 is in lieu of the Pollution Control Credit claimed Complete the name and taxpayer identification number (TIN)
on Form 315 with respect to the same equipment or expense. section at the top of the form. Indicate the period covered by
Individual partners in a partnership may each claim only the the taxable year. Include the completed form with the tax
pro rata share of the credit allowed based on their ownership return.
interest. The total of the credits allowed all such owners may All returns, statements, and other documents filed with the
not exceed the amount that would have been allowed for a department require a TIN. The TIN for a partnership is its
sole owner of the business. employer identification number (EIN). The TIN for an
To Qualify for the Credit: individual is the taxpayer's Social Security Number (SSN) or
• The individual taxpayer must be involved in the an Internal Revenue Service individual taxpayer
commercial production of livestock, livestock products identification number. Taxpayers that fail to include their
or agricultural, horticultural, viticultural or floricultural TIN may be subject to a penalty.
crops or products; AND Part 1 - Schedule of Equipment and Current
• The individual taxpayer must purchase tangible personal
Taxable Year's Credit Calculation
property that is primarily used in the taxpayer’s trade or
business in Arizona to control or prevent pollution. Lines 1 through 10
o Property eligible for the tax credit includes only that Column (a): Enter the date the qualifying agricultural
portion of the property directly used, constructed, or property was placed in service or the date it is expected to be
installed in Arizona to prevent, monitor, or reduce placed in service in Arizona.
air, water, or land pollution. Column (b): Enter a brief description of the Arizona
o Qualifying property includes a portion of a structure, property used in the taxpayer's business to control or prevent
building, installation, excavation, machine, pollution.
equipment, or device, and any attachment to, or

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Arizona Form 325

Column (c): Enter the total cost incurred during the taxable NOTE: Trusts and estates which are partners in a
year for qualifying agricultural property used to reduce partnership are not eligible to claim this credit. However,
pollution. For additional information, see the section “To the share of a partnership owned by a grantor trust that is
Qualify for the Credit” in column 1 of this page. disregarded for federal income tax purposes is treated as
If there are more than 10 items of qualifying property, owned by the grantor. The grantor may claim his or her
complete additional schedules. Include the completed share of the credit.
schedules with Form 325.
Part 5 - Available Credit Carryover
Line 11
Complete Part 5 only if you claimed this credit for prior
Add lines 1 through 10 in column (c) and enter the total. taxable years and the credit exceeded your Arizona income
Line 12 tax liability for those taxable years.
Enter the total cost of equipment from additional schedules. Lines 19 through 23
Line 13 Enter the taxable years from which the credit is carried over
Add lines 11 and 12 and enter the total. This is the total cost in column (a) on lines 19 through 23. In column (b), enter the
of agricultural pollution control equipment incurred during credit originally computed for that taxable year. In column
this taxable year. (c), enter the amount of the credit from that taxable year
Line 14 which was previously used or expired. Subtract the amount in
column (c) from the amount in column (b) and enter the
Multiply line 13 by 25%. Enter the result.
difference in column (d).
Part 2 – Credit Passed Through From
Line 24
Partnerships Add the amounts entered on lines 19 through 23 in column
NOTE: If you received a pass through of this credit from (d). Enter the total on line 24, column (d).
more than one partnership, total the amounts received from
all Forms 325-P and enter the total. Include a copy of each Part 6 - Total Available Credit
Form 325-P you received with your return. Line 25
Individuals: Enter the current year's credit from Part 3,
Line 15 line 18.
Enter the total amount of the credit passed through from
Partnerships : Enter “0”.
partnerships on Form(s) 325-P, line 4.
Individuals that did not make the Small Business Income
Part 3 - Total Current Year Credit election: Enter this amount on Form 301, Part 1, line 11,
Line 16 column (a).
Add lines 14 and 15. Enter the total. Individuals that made the Small Business Income election :
Line 17 - Maximum Credit Allowed Also enter this amount on Form 301-SBI, Part 1, line 7,
column (a).
The maximum credit amount allowed for this credit is
$25,000. Line 26
Line 18 Individuals: Enter the amount from Part 5, line 24, column
(d). This is the total available credit carryover.
Enter the lesser of line 16 or line 17. This is your maximum
current year credit for agricultural pollution control Individuals that did not make the Small Business Income
equipment. election: Enter this amount on Form 301, Part 1, line 11,
column (b).
Partnerships -continue to Part 4. Individuals that made the Small Business Income election :
Individuals -skip to Part 5. Enter this amount on Form 301-SBI, Part 1, line 7,
Part 4 - Partnerships Passing Through the column (b).
Credit Line 27
Partnerships claiming this credit must pass it through to its Individuals: Add line 25 and line 26. Enter the total. This is
partners. Proceed to the instructions on page 4 for the total available agricultural pollution control equipment
completing Form 325-P. credit that may be applied to the current taxable year's tax
liability.
Each partner is entitled to only a pro rata share of the credit
based on the partner’s ownership interest in the partnership. Individuals that did not make the Small Business Income
The total of the credit allowed to all partners may not exceed election: Enter this amount on Form 301, Part 1, line 11,
the amount that would have been allowed for a sole owner. column (c).
Individuals that made the Small Business Income election:
Enter this amount on Form 301-SBI, Part 1, line 7,
column (c).

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Arizona Form 325

Form 325-P, Part 2 – Distribution of the Credit
Distribution to Individual Partners of a Line 3
Enter the total amount of the partnership’s credit for
Partnership Agricultural Pollution Control Equipment from Form 325,
Enter the taxable year from which this credit is being passed Part 3, line 18.
through to your individual partners. Line 4
Complete Form 325-P for each individual partner of the Multiply the amount on line 3 by the individual partner’s
partnership except for trust or estate partners. However, a ownership percentage shown on line 2(c). Enter the result.
partnership ownership share that is owned by a grantor trust This is the partner’s portion of this credit.
that is disregarded for federal income tax purposes is treated
as owned by the grantor. The grantor may claim his or her Each individual partner will use this form to complete their
share of the credit. Form 325.
The partnership must furnish each individual partner with
their completed copy of Form 325-P, including additional
schedules as needed.
Part 1 – Partnership and Individual Partner
Information
Line 1
Enter the partnership name and EIN in the spaces provided.
Line 2
Enter the individual partner’s name, SSN, and ownership
percentage in the spaces provided.

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