318: Credit for Taxes Paid for Coal Consumed in Generating Electrical Power (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Form 318 calculates the credit for transaction privilege tax or use tax paid on coal purchased to generate electrical power in Arizona. It reports the current year's credit, credits passed through from partnerships, and available credit carryovers.
Who files this form
Form 318 calculates the credit for transaction privilege tax (TPT) or use tax paid by the seller or purchaser on coal sold to the taxpayer for generating electrical power in Arizona.
- C corporations and S corporations electing to claim the credit at the corporate level report their available credit in Part 4.
- A partnership claiming the credit must pass it through to its corporate partners.
- The credit is not available to individual partners of a partnership or individual shareholders of an S corporation.
What you'll need
Have these forms and details ready:
- Your name as shown on Form 99T, 120, 120A, 120S, 120X or 165, and your employer identification number (EIN).
- Form 318-1, with vendor and taxpayer names, Arizona TPT or use tax numbers, and monthly coal purchase details: tax type, price before tax, tax paid and total amount.
- Form 318-P if you receive this credit from a partnership. Partnerships must complete one for each corporate partner.
- For any credit carryover, the taxable year, original credit amount and amount previously used.
- Form 300 to report the current-year credit, available carryover and total available credit from Part 4.
How to file
Complete Form 318-1 before completing Form 318. Include the completed Form(s) 318-1 and enter the total tax paid from line 13, column (d), on Form 318, line 1.
C corporations and S corporations electing to claim the credit at the corporate level must also enter the amounts from Form 318, lines 11 through 13, on Form 300, Part 1, line 3, columns (a) through (c).
A partnership claiming the credit must complete Form 318-P for each corporate partner, provide each partner a completed copy, file a copy of each with its tax return and keep a copy for its records.
Common mistakes
- Completing Form 318 first. The form directs you to complete Form 318-1 before Form 318.
- Claiming the credit for an individual partner or an individual S corporation shareholder. The form specifically says they cannot receive this credit.
- Leaving out additional vendors. If there are more than two vendors, complete additional Form(s) 318-1.
- Skipping the partnership pass-through paperwork. Partnerships must provide, file and retain copies of Form 318-P for each corporate partner.
Questions people ask
How is the credit from my own operations calculated?
Multiply the qualifying tax paid on Form 318, line 1, by 30%. Enter the result on line 2.
Where do I report a credit passed through from a partnership?
Enter the amount from Form 318-P, line 3c, on Form 318, line 3. Add it to line 2 to calculate the current taxable year's credit on line 4.
How do I calculate the available carryover?
In Part 3, subtract the amount previously used from the original credit amount for each taxable year listed. Add the available amounts on lines 5 through 9, column (d), and enter the total on line 10.
What if I bought coal from more than two vendors?
Complete additional Form(s) 318-1.