Yes. The filing threshold is $15,000 AZ Gross Income. However, to determine what your AZ Gross Income is, you have to complete form 140NR and the calculated number is on Line 26. Basically, when you go through the calculation, you need to enter "Rents, royalties, partnerships, estates, trusts, small business corporations from federal Schedule E." on Line 21. If this is a loss which is highly likely after expenses and depreciation, then your AZ Gross Income on Line 26 will be negative and below the $15,000 filing threshold. Bottom line, no filing is required if Schedule E net income is below $15000.
