Remote Work AZ/SD

I didn't find a specific question regarding this, so I thought I would ask...

I live in South Dakota (no state tax), and work remotely for a company in Arizona. 

 

I was told by the payroll department that they needed to deduct state taxes, even though I don't live in Arizona. Regardless of whether I live in South Dakota that doesn't have individual state tax.

 

I did live in Arizona this year (2022), from January to July, and moved to South Dakota in July. I have worked remotely since then. Not sure if this info is relevant, but just in case it is; I wanted to share my residency status.

 

Thanks.