What is a penalty fee?

The penalty fee for late renewal is described in ARS 28-8329A:

If an aircraft required to be registered under this article is not registered within sixty days after its entry into this state and renewed annually on or before the last day of February, a penalty of twenty-five dollars for this first month and five dollars for each succeeding month of delinquency shall be added to the registration fee and collected unless an exemption for the aircraft is established pursuant to this article.