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2020 Credit for Renewable Energy Investment and 
Production for Self-Consumption by                                                                    Arizona Form  
International           Operations Centers                                                                         351 
For information or help, call one of the numbers listed:               •    The energy produced must be used for self-
Phoenix                                        (602) 255-3381               consumption 
                                                                       •
From area codes 520 and 928, toll-free         (800) 352-4090               By the fifth year the facility is in operation, at least 51 
                                                                            percent of the energy produced must be used for self-
Tax forms, instructions, and other tax information 
                                                                            consumption in Arizona. 
If you need tax forms, instructions, and other tax information, go  
to the department’s website atwww.azdor.gov.                       NOTE:  A taxpayer that is initially authorized as an 
Income Tax Procedures and Rulings                                  International Operations Center after December 31, 2018 may 
These instructions may refer to the department’s income tax        not claim this tax credit.   
procedures and rulings for more information.  To view or print     This credit is available to corporate taxpayers, exempt 
these, go to our website and click on Reports & Legal Research     organizations subject to unrelated business taxable income 
then click on Legal Research and select a Document Type and        (UBTI), and corporate partners in a partnership.  The total of the 
Category  from the drop down menus.                                credits may not exceed the amount that would have been 
Publications                                                        allowed for a sole owner of the business.   
To view or print the department’s publications, go to our website  If the current taxable year's credit exceeds the taxpayer’s tax 
and click on Reports  &  Legal Research.  Then click on            liability for the taxable year, the taxpayer may carry forward the 
Publications.                                                      unused credit to the next five consecutive taxable years. No 
 
                                                                   credit, other than carryovers generated properly, may be claimed 
                                                                   for any taxable year beginning after December 31, 2025. 
                   General Information                              

This credit provides nonrefundable corporate income tax credits                       Credit Recapture 
for investment in new renewable energy facilities that produce 
energy for self-consumption using renewable energy resources if    If an IOC taxpayer fails to make the $1.25 billion investment in 
the power will be used primarily for an International Operations   the center within the 10 years after certification, this credit is 
Centers. The credit authorized is $5 million per year for five     recaptured in inverse proportion to the total capital investment 
years.  The initial credit is claimed in the year the facility     made in the IOC by the $1.25 billion.  The recapture must be 
becomes   operational.                                             made on the taxpayer's income tax return for the taxable year in 
                                                                   which it is first known that the required investment would not be 
NOTE:     For taxable years beginning from and after December      made within the required time or the taxable year in which the 
31, 2018, this credit is no longer available to individual         certification was revoked. 
                                                                    
taxpayers.   It is available only to corporate taxpayers. 
                                                                   Example: 
                                                                    
                   Claiming this Credit                            Ten years after its certification, an IOC taxpayer invested $900 
To claim this credit, a taxpayer must apply to the Arizona         million in its center and claimed $25 million for this credit 
Department of Revenue  (Department)  for certification. The        ($5,000,000 per year for 5 years.) The IOC taxpayer will 
department reviews and pre-approves the taxpayer for the credit    determine its credit recapture by subtracting its total investment 
on a first-come, first-served basis. The maximum amount of this    ($900 million) from the required investment ($1.25 billion) and 
credit a taxpayer can receive is $5,000,000 per tax year.  The     dividing that amount by the required investment. 
department  may not authorize tax credits under A.R.S. §           IOC taxpayer invests $900 million in 10 years.  
43-1164.05 that exceed, in the aggregate, a total of $10 million    
for any calendar year.                                             Required investment amount is $1.25 billion.  
                                                                    
The taxpayer must submit a request for final certification to the  Required Investment               $1,250,000,000 
department within 30 days after the renewable energy facility for  Total Investment                  $   900,000,000 
which authorization was given becomes operational. See the         Amount  not invested              $   350,000,000 
program guidelines at www.azdor.gov under the “Tax Credits” 
                                                                   Amount not invested               $   350,000,000 
section.  
                                                                   Required Investment               $1,250,000,000 
The taxpayer must qualify for this credit as an International 
                                                                   Percentage not invested                              28% 
                                                                    
 Operations Center (IOC). 
                                                                   Calculate Credit Recapture 
To qualify, a taxpayer must: 
                                                                   Total Credit Claimed                          $25,000,000 
    •     Invest at least $100 million in one or more renewable 
                                                                   Percentage (above)                                   28% 
          energy facilities in Arizona. 
                                                                   Amount to Recapture                                  $ 7,000,000 
    •     The minimum investment of $100 million must be            
          completed within a 3-year period beginning on the date   The IOC taxpayer will report a credit recapture on its income tax 
          the initial application is received by the department or return  of $7 million.             
                                                                    
          by December 31, 2030, whichever is earlier. 
    •     Invest $1.25 billion in the IOC within 10 years after 
          being certified by the Arizona Commerce Authority 
          (ACA).

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Arizona Form 351
Line 9
Specific Instructions Enter the lesser of line 8 or $5,000,000. This is your current
Complete the name and taxpayer identification number (TIN) year’s total tax credit. This amount cannot exceed $5 million.
section at the top of the form. Indicate the period covered by NOTE: The maximum credit allowed per taxpayer per
the taxable year. Include the completed form and all taxable year is $5 million.
supporting documentation with the tax return.
All returns, statements, and other documents filed with the Part 2 – Credit Recapture

department require a TIN. The TIN for a corporation, an
exempt organization with UBTI, an S corporation, or a NOTE: If you are a partnership that passed the credit
partnership is the taxpayer's employer identification number through to corporate partners, do not complete Part 2. You
(EIN). Taxpayers that fail to include their TIN may be subject will report the recapture to the partners Form 351-P.

to a penalty. Line 10
NOTE – To claim this credit: If you received a notice from the department that your credit
• C corporations, S corporations claiming this credit at is subject to recapture, check the “Yes” box, and include a
the corporate level, and exempt organizations with copy of the notice. If you did not, check the “No” box and
UBTI, complete this credit form and Arizona Form 300 , skip to line 17.
Nonrefundable Corporate Tax Credits and Recapture. Line 11
Include both completed forms with your tax return. Enter the facility code indicated on the certificate.
• Partnerships, complete this credit form. Also, complete Line 12
Form 351-P for each corporate partner of the
Enter the taxable year(s) in which you took a credit or credit
partnership. Provide each corporate partner a copy of
carryover as an IOC.
his or her completed Form 351-P. Include Form 351
and one copy of each completed Form 351-P with your Line 13
tax return. Enter the credit amount previously authorized by the
department.
Part 1 – Qualification for and Current Line 14
Taxable Year’s Credit Enter the amount of credit carryover that remains unused.
Line 1 Line 15
If you received any certificate(s) directly from the Subtract line 14 from line 13 and enter the amount.
department, check the “Yes” box and include a copy of the Is line 15 less than zero?
certificate. If you did not, check the “No” box and skip to line 4. If you subtract line 14 from line 13 and your result is less
Line 2 than zero, you may be eligible to use a portion of your credit
Enter the facility code for which you received the credit. carryforward.
Line 3 To determine the amount of credit carryforward you can use,
Enter the total amount of the credit authorized by the subtract line 13 from line 14. The difference is the amount of
this credit you can carry forward.
certificate.
Line 4 EXAMPLE:
If you received a Form 351-P, check the “Yes” box and On your Form 351, line 13 is $5,000,000 and line 14 is
include a copy of the form. If you did not, check the “No” $4,000,000. If you subtract line 14 from line 13, the result is
negative ($1,000,000).
box and skip to Part 2.
As instructed above, line 13, $5,000,000, from line 14,
Line 5
$4,000,000. The difference is $1,000,000.
Enter the facility code indicated on Form 351-P.
This is the amount of this credit you can carry forward.
Line 6
Enter the name and EIN of the company passing the credit Line 16
through to you. Enter the greater of line 15 or “0”. This is the amount of your
direct recapture.
Line 7
Enter your portion of the credit indicated on Form 351-P. If NOTE: If you are a corporate partner in multiple entities
you receive this credit from more than one partnership, enter receiving this tax credit, total the amounts received from all
the total of all credits passed through from partnerships. partnerships on Form(s) 351-P and enter the total. Include a
copy of each Form 351-P you received with your return.
NOTE: If you are a partner in multiple entities receiving this
tax credit, total the amounts received from all partnerships Line 17
on Form(s) 351-P and enter the total. Include a copy of each If you received a notice of recapture on Form 351-P, check
Form 351-P you received with your return. the “Yes” box and include a copy of the form. If you did not,
check the “No” box and skip to Part 3.
Line 8
Add lines 3 and 7 and enter the total.
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Arizona Form 351
Line 18 Line 27
Enter the name and EIN of the partnership who sent you the Subtract line 26 from line 25 and enter the difference. This is
notice of recapture. your net available credit carryover.
Line 19 Line 28
Enter the tax year(s) you claimed the credit. Enter the amount of this credit carryover that was
Line 20 disqualified.
Enter the total amount of the credit subject to recapture Line 29
passed through to you on Form 351-P, Part 2, line 7. Subtract line 28 from line 27 and enter the difference.
Line 21 Line 30
Enter the amount of the credit carryover that remains unused. Add lines 29(a) through (c) and enter the total. This is your
Line 22 total available credit carryover.
Subtract line 21 from line 20 and enter the difference.
Part 4 – Total Available Credit
Is line 22 less than zero?
If you subtract line 21 from line 20 and the difference is less Line 31
than zero, you may be eligible to use a portion of your credit Enter the amount from Part 1, line 9.
carryforward. C corporations, S corporations that elected to claim the
To determine the amount of credit carryforward you can use, credit at the corporate level, and exempt organizations with
subtract line 20 from line 21. The difference is the amount of UBTI:
•
this credit you can carry forward. Enter the amount from line 9. This is your total current
year’s credit. It is the sum of the current year’s credit
EXAMPLE: that you established and also the pass-through credit you
On your Form 351, line 21 is $5,000,000 and line 20 is received in the current year.
$4,000,000. If you subtract line 21 from line 20, the • Also, enter this amount on Form 300, Part 1, line 15,
difference is negative ($1,000,000). column (a).
As instructed above, you then subtract line 20, $5,000,000, Line 32
from line 21, $4,000,000. The result is $1,000,000. Enter the amount from Part 3, line 30.
This is the amount of credit you can carry forward. C corporations, S corporations that elected to claim the
Line 23 credit at the corporate level, and exempt organizations with
Enter the greater of line 22 or “0”. This is the amount of the UBTI:
credit recapture passed through to you from a partnership. • Enter the amount from Part 3, line 30. This is your total
Line 24 available credit carryover for renewable energy
investment and production for international operations
Add lines 16 and 23 and enter the total.
centers.
This is your total recapture amount. • Also, enter this amount on Form 300, Part 1, line 15,
C corporations, S corporations that elected to claim this credit column (b).
at the corporate level, and exempt organizations with UBTI,
Line 33
enter this amount on Form 300, Part 2, line 24.
Add lines 31 and 32. Enter the total.
Part 3 – Available Credit Carryover C corporations, S corporations that elected to claim the
credit at the corporate level, and exempt organizations with
Use Part 3 to figure your total available credit carryover from UBTI:
prior taxable years. Columns (a) through (c) represent the tax • Add line 31 and line 32, enter the total. This is the total
years for which you claimed this credit. Complete lines 25 available credit that may be applied to the current year's
through 29, columns (a) through (c), if you claimed the credit tax liability.
on a prior year’s return and the credit exceeded your tax • Also, enter this amount on Form 300, Part 1, line 15,
liability. column (c).

NOTE: This credit has a five year carryforward. You have
Part 5 – Corporate Partner’s Portion of
five years in which to apply this credit to your Arizona taxes.
Credit
Line 25
Enter the amount of the credit originally computed for the PASSING THIS CREDIT THROUGH TO
first year you claimed the credit. CORPORATE PARTNERS OF A PARTNERSHIP
Line 26 Partnerships must pass this credit through to its corporate
Enter the amount of the credit you previously claimed on an partners. Partnerships claiming this credit that have
earlier tax return. individual partners lose the individual partner’s combined
ownership percentage of the credit.

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                                                                                                            Arizona Form 351 
A partnership must complete its own Form 351, Parts 1            Enter the amount(s) from  column (d)  in each respective 
through 4 (as necessary) to pass this credit through to its       corporate partner’s Form 351-P, line 3(c). 
 partners.                                                        Total:  
NOTE:  If you have more than 10 corporate partners, create       Add the amounts in column (d) and enter the total.  This 
a similar worksheet  to  pass through the  credit  amount.       amount will equal the credit amount on the certificate you 
Include that amount with your return.                            received from the Department.  
                                                                  
To pass this credit amount through to your  corporate            To complete the pass through of this credit, the partnership 
partners - enter the Tax Year(s) on the notice you received      must complete Form 351-P for each corporate partner, and: 
from the Department or from Forms 351-P you received.            ••      Provide each corporate partner with their respective copy 
  
Using the table below, complete lines 1 – 10 as follows:                 of Form 351-P,  
•  Enter each corporate partner’s name in column (a)             ••      Include a copy of each completed Form 351-P with its 
•  Enter the corporate partner’s corresponding ownership                 tax return, and  
   percentage of the partnership in column (b)                   •       Keep a copy of each completed Form 351-P for its 
•  Enter the total credit amount from the certificate or Form            records. 
                                                                  
   351 you received in each line of the worksheet in column      The corporate partner will then complete its own Form 351 to 

•  Multiply column (b) by column (c) enter the result in 
   column (d) for each corporate partner 
The amounts indicated in column (d) are the respective 
   (c).                                                            claim      this credit.   
corporate partner’s portion of this credit.   
 
NOTE:   Each corporate partner is entitled to only a pro rata share of the credit based on the corporate partner’s ownership 
interest in the partnership. The total of the credit allowed to all partners may not exceed the amount that would have been allowed 
for a sole owner. 
 
Use this worksheet to figure the amount of the credit to be passed through to each partner. 
 
Tax Year    
                         (a)                   (b)                            (c)                            (d) 
                  Corporate Partner           Ownership %                Credit Amount          Corporate Partner’s Portion 
1                                                                                              
2                                                                                              
3                                                                                              
4                                                                                              
5                                                                                              
6                                                                                              
7                                                                                              
8                                                                                              
9                                                                                              
10                                                                                             
Total                                                                                         $ 
 
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                                                                                                           Arizona Form 351 
RECAPTURE OF THIS CREDIT PASSED                                     Example: 
THROUGH TO CORPORATE PARTNERS OF A                                  Partnership claimed this credit for five years, 1 through 5.  
PARTNERSHIP                                                         Each year, Partnership claimed the maximum amount, $5M.  
                                                                    The total credit claimed was $25M.   
If you passed this credit through to your corporate partners in 
a previous tax year and then received a notice from the             During the time Partnership claimed this credit, it had 5 
Arizona Department of Revenue that your credit is subject to        corporate Partners: 
recapture during this year, you must pass the amount(s)             •   Corporate Partner A owned 20% of Partnership for each 
subject to recapture through to your corporate partners that            year, 1 through 5 
received the credit.                                                •   Corporate Partner B owned 20% of Partnership for each 
                                                                        year 1 through 5 
This credit was passed through to your corporate partners           •   Corporate  Partner C owned 20% of Partnership for 
based on their ownership percentage (per year).  The                    years 1 through 3; in year 4, Partner C sold its 
recapture amount is based on a percentage of the total credit           ownership percentage of Partnership to Corporate 
passed through to all partners.  You will receive a notice of           Partner D 
recapture from the Department indicating the percentage of          •   Corporate  Partner D owned 20% of Partnership for 
this credit that is subject to recapture.  You must notify your         years 1 through 3; for years 4 and 5, Corporate Partner 
shareholders of their portion of this amount.                           D owned 40% of Partnership 
  
To notify your corporate  partners of their respective              •   Corporate Partner E owned 20% of Partnership for each 
amount(s) of this credit that is subject to recapture from them:        year 1 through 5. 
   A. Determine the amount of credit passed through to each           
      partner for all years of the credit                           During year 7, Partnership received a notice from the 
   B. Multiply the amount in A (above) by the recapture             Department indicating 40%, or $10Million of its credit is 
      percentage (provided by Arizona Department of                 subject to recapture. 
      Revenue)                                                       
   C. Complete  Part 2 of Form 351-P for each partner               Using the 351-P Forms it completed for years 1 through 5, 
      informing him/her of the amount of this credit subject to     Partnership determined it passed through the following 
      recapture.                                                    amounts of credits to each of its partners for these years: 
                                                                     
                                                                    Corporate Partner        Total Credit Passed Through 
                                                                    Corporate Partner A             $ 5,000,000 
                                                                    Corporate Partner B             $ 5,000,000 
                                                                    Corporate Partner C             $ 3,000,000 
                                                                    Corporate Partner D             $ 7,000,000 
                                                                    Corporate Partner E             $ 5,000,000 
                                                                    Total Credit                    $25,000,000 
  
Multiplying each partner’s amount of credit “passed through” by the recapture percentage, 40%, Partnership determined the 
credit amount(s) subject to recapture for each partner is: 
 
Partner:                  Credit Amount                          Recapture %            Subject to Recapture 
Corporate Partner A       $ 5,000,000                                  40%              $ 2,000,000 
Corporate Partner B       $ 5,000,000                                  40%              $ 2,000,000 
Corporate Partner C       $ 3,000,000                                  40%              $ 1,200,000 
Corporate Partner D       $ 7,000,000                                  40%              $ 2,800,000 
Corporate Partner E       $ 5,000,000                                  40%              $ 2,000,000 
Total Credit              $25,000,000                                  40%              $10,000,000 
 
Partnership completed Form 351-P for each corporate partner above informing it of the amount of this credit that is subject to 
recapture.   
  
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                                                                                                           Arizona Form 351 
                                                                  To distribute the recapture amount to the corporate 
    Form 351-P, Distribution to Corporate                          partners of the partnership (complete lines 4 through 7): 
           Partners of a Partnership                              Line 4 
  
                                                                  a)  Enter the partnership name 
Indicate the taxable year for which this credit is being passed 
                                                                  b)  Enter the partnership EIN 
 through to your corporate partners.                              Line 5 
Complete   Form 351-P for each corporate partner.                 a)  Enter the corporate partner’s name 
NOTE:                                                             b)  Enter the corporate partner’s TIN 
Partnerships use Form 351-P to notify each  corporate             Line 6 
partner of their share of:                                        a)  Enter the facility code for which this credit was 
•    The credit to be claimed, or                                     originally approved 
•    The credit subject to recapture.                             b) Enter the tax year(s) for which this credit was originally 
                                                                      approved 
To distribute the credit to the corporate partners of the 
                                                                  Line 7 
partnership    (complete lines 1 through 3c):                     Enter the corporate partner’s portion of the credit subject to 
Line 1                                                            recapture from the worksheet in the instructions.   
a)   Enter the partnership name                                    
b) Enter the partnership’s EIN                                    This is the corporate  partner’s  portion  of the credit 
c)   Enter the facility code for which this credit was            subject to recapture. 
     received.                                                     
Line 2                                                             
a)   Enter the corporate partner’s name 
b)   Enter the corporate partner’s TIN 
Line 3a, 3b, and 3c 
a)   Enter the amount of this credit for which the partnership 
     was approved from Part 1, line 9. 
b) Enter the corporate partner’s ownership percentage 
c)   Multiply line 3(a) by line 3(b) and enter the result. 
 
This is the corporate partner’s portion of this credit. 
 
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