Ariz. Admin. Code § 15-2D-703
The numerator of the payroll factor is the total compensation paid in this state during the tax period by the taxpayer for compensation. The tests in A.R.S. § 43-1144 for determining whether compensation is paid in this state are derived from the Model Unemployment Compensation Act. Accordingly, if the taxpayer includes compensation paid to employees in the payroll factor by use of the cash method of accounting or if the taxpayer is required to report the compensation under this method for unemployment compensation purposes, the Department shall presume that the total wages reported by the taxpayer to this state for unemployment compensation purposes constitute compensation paid in this state except for compensation excluded under this Article. The presumption may be overcome by evidence satisfactory to the Department that an employee's compensation is not properly reportable to this state for unemployment compensation purposes.
Ariz. Admin. Code § R15-2D-703