Unfortunately the answer to your question would be yes, an employee telecommuting from AZ would give you nexus in AZ and therefore subject you to the Transaction Privilege Tax (Sales Tax) and Corporate Income Tax.

AZ takes the position that any employee in the state for greater than 2 days per year is nexus creating and there is no exception for telecommuting. On the income tax side you could have some protection from Public Law 86-272 which is a federal law that states if your only activity in a state is the solicitation of tangible personal property and the orders are approved outside the state and subsequently shipped into the state then the state is forbidden from charging a net income tax. However it is important to note that this is a very narrow exception. If you or any third parties on your behalf perform any services like installation, repair, training, maintenance and in some case delivery than the protections of PL 86-272 do not apply. In addition if you are selling intangibles an example of which could be software or other digital goods than this protection would also not apply.

One item to note is that the activities of third parties acting on your behalf also fall under the 2 day rule, so converting the employee to an independent contractor would not be a solution.