Schedule MSP: Multi-state Service Provider Election and Computation (2025)
Arizona · Arizona DOR · Used for tax years 2025
Arizona Schedule MSP is used to make the multistate service provider election and report Arizona market sales from services or designated intangibles. It includes qualification questions for the first year of the election, which is irrevocable and binding for five consecutive tax
Who files this form
Use Schedule MSP to make the Multistate Service Provider election and include it with your tax return. The schedule applies to filers of Forms 99T, 120, 120S, 120X, and 165.
Part A provides three ways to qualify:
- Your sales from services or designated intangibles whose benefit is received outside Arizona, divided by total sales everywhere, are more than 0.850000.
- You are a regionally accredited institution of higher education with at least one university campus in Arizona that has more than 2,000 students residing on campus.
- You are an employer with more than 2,000 employees in Arizona and derive more than 85% of your sales from support services provided to a regionally accredited institution of higher education.
If you answer “No” to all three qualification questions, the form says you do not qualify and must stop.
What you'll need
Have the following information ready to complete the schedule:
- Your name as shown on Form 99T, 120, 120S, 120X, or 165, and your Employer Identification Number (EIN).
- Your tax-year dates, the beginning and ending dates of the initial year of your election cycle, and your current election-cycle year.
- For Year 1, sales from services or designated intangibles whose benefit is received outside Arizona, and total sales everywhere.
- If applicable, the campus-resident student count or Arizona employee count and support-service sales information used to answer the qualification questions.
- The amount of Arizona market sales from services or designated intangibles for Part B.
How to file
Submit the completed Schedule MSP with your timely filed original tax return to make the election.
Complete Part A only in Year 1 of the election cycle. Follow the qualification questions to determine whether to continue to Part B.
In Part B, enter Arizona market sales from services or designated intangibles. Also enter that amount in column A of the applicable return schedule:
- Form 99T: Schedule A, line A3b.
- Form 120: Schedule E, line E3b.
- Form 120S: Schedule A, line A3b.
- Form 120X: Schedule A, line A3b.
- Form 165: Schedule C, line C3b.
Common mistakes
- Leaving out the schedule: The form says to include Schedule MSP with the tax return and to submit it with a timely filed original return to make the election.
- Completing Part A every year: Complete Part A only in Year 1 of the election cycle.
- Overlooking the election commitment: The election is irrevocable and binding for five consecutive taxable years, beginning with the first year to which it applies.
- Not carrying Part B to the return: Also enter the Part B amount on the applicable return schedule and line listed on Schedule MSP.
Questions people ask
How long does the election last?
The election is irrevocable and binding for five consecutive taxable years, beginning with the first taxable year to which it applies.
Do I complete Part A every year?
No. Complete Part A only in Year 1 of the election cycle. The schedule has checkboxes for Years 1 through 5.
Does a ratio of exactly 0.850000 qualify on line A4?
No. Line A4 asks whether the ratio is more than 0.850000. If it is not, continue to line A5 to check another qualification route.
How do I calculate line A3?
Divide line A1 by line A2 and carry the quotient to six decimal places.
What if I do not qualify under any of the Part A questions?
If you answer “No” to lines A4, A5, and A6, the form says you do not qualify to make the election and must stop.