Arizona Mileage and Vehicle Tax Records (2026): Form 140 Depreciation, TNC Permits and Driverless Cars
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Arizona's return starts from federal adjusted gross income, and itemizers start from federal Schedule A, so there's no separate state deduction for unreimbursed employee mileage. Vehicle depreciation is added back and recalculated on Form 140. Rideshare companies need an ADOT permit, and fully autonomous cars may run driverless after filing a law enforcement plan.
Arizona mostly follows the federal numbers, with one recurring adjustment for vehicle depreciation. This guide covers what the Arizona Department of Revenue (ADOR) and Title 28 of the Arizona Revised Statutes say as of October 16, 2026.
The federal baseline every Arizona driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How Arizona treats vehicle deductions
ADOR's conformity page says the starting point for your Arizona return is your federal adjusted gross income, and that to itemize you start with the amount on federal Schedule A. A self-employed driver's Schedule C vehicle deduction is already inside federal AGI. Arizona's individual tax for 2025 is figured at 2.5% of taxable income (2025 Form 140 instructions).
Depreciation: add back, then subtract
The 2025 Form 140 instructions have you add back the total depreciation deducted on your federal return (line 17) and subtract a recalculated Arizona figure (line 26). For assets placed in service in tax years beginning after December 31, 2016, the Arizona figure is calculated as if bonus depreciation were the full (100%) amount of federal bonus depreciation under IRC Section 168(k). Older assets use different percentages. ADOR's procedure ITP 16-2 has worked examples. See why business-use percentage matters.
Unreimbursed employee expenses
Because Arizona itemized deductions start from federal Schedule A, and most employees can't deduct unreimbursed car expenses federally (IRS Topic 510), Arizona has no separate add-on for them. The 2025 Schedule A adjustment instructions only reduce itemized deductions for items such as employee business expenses tied to income Arizona doesn't tax.
Rideshare (TNC) rules in Arizona
Under A.R.S. 28-9552, a person may not act as a TNC driver in Arizona unless the company holds a permit from the Department of Transportation. A.R.S. 28-9556 says drivers may accept only rides booked and paid for through the company's app, with a civil penalty of up to $1,500 for street hails. The company must keep individual trip records for at least one year. Before anyone can accept trips, the company collects their driver license, driving history, registration and insurance details and runs background checks (A.R.S. 28-9555).
Because the company keeps trip records for one year, save your own receipts and annual summaries. The IRS doesn't publish a rideshare-specific list of which miles count; see which rideshare miles count.
Robotaxis and autonomous vehicles in Arizona
A.R.S. 28-9702 allows an autonomous vehicle on public roads with its automated driving system engaged and a licensed human driver able to take over. A fully autonomous vehicle may run with no human driver only after the operator submits a law enforcement interaction plan to the Department of Transportation and the Department of Public Safety. The operator also files a written statement covering federal safety compliance, the ability to reach a minimal risk condition, traffic-law compliance, and title, registration and insurance. When engaged, the automated driving system is considered the driver for traffic laws. A.R.S. 28-9701 defines an on-demand autonomous vehicle network, including transportation for hire.
For how a fleet would keep records, see robotaxi fleet tax basics.
What to keep in your Arizona records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you claimed Section 179 or bonus depreciation federally: the vehicle's cost and placed-in-service date for the Form 140 add-back (line 17) and recalculated Arizona depreciation (line 26).
- For rideshare: save ride receipts and the annual summary each year; the TNC only has to keep trip records for one year.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
An Arizona return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- ADOR, Conformity to IRC
- ADOR, 2025 Form 140 instructions
- ADOR, 2025 Form 140 Schedule A instructions
- A.R.S. 28-9552
- A.R.S. 28-9555
- A.R.S. 28-9556
- A.R.S. 28-9701
- A.R.S. 28-9702
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Can Arizona employees deduct unreimbursed mileage?
Generally not separately. Arizona itemized deductions start from federal Schedule A (ADOR), and most employees can't deduct unreimbursed car expenses federally (IRS Topic 510). Ask your preparer about the exceptions.
How does Arizona handle bonus depreciation on a work vehicle?
You add back federal depreciation on Form 140, line 17 and subtract recalculated Arizona depreciation on line 26. For assets placed in service in tax years beginning after 2016, that figure uses 100% of federal bonus depreciation (2025 Form 140 instructions).
Who issues rideshare permits in Arizona?
The Arizona Department of Transportation. A.R.S. 28-9552 bars anyone from driving for a TNC that lacks a permit.
How long does an Arizona TNC keep trip records?
At least one year after each trip (A.R.S. 28-9556). Keep your own records longer.
Can a car drive itself without a driver in Arizona?
Yes, if the operator has filed a law enforcement interaction plan and a written compliance statement under A.R.S. 28-9702.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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