I got laid off from work and had about 40 hours of PTO time left. The company said that they will not pay me the PTO time. Is that legal in Arizona?
Paid time off may or may not be classified as "wages" depending on the unique circumstances of your case. So, whether it is lawful for the company to withhold payment cannot really be determined based on the information you provided.
Here is a link to a very helpful page from the Arizona Labor Department regarding wage claims. If the amount you are owed is less than $2,500.00 you can file a complaint with the Labor Department. If it is more, you'll have to use a private attorney.