Arizona Economic Incentives

Renewable Energy Tax Incentive Program (RETIP)

• Refundable corporate income tax credit for up to 10% of capital investment
• 75% reduction in property taxes for up to 15 years
• Applicable to manufacturing and headquarters operations locating anywhere in the state

Foreign Trade Zone Program (FTZ)

• Companies qualifying for benefits under the Foreign Trade Zone Program can receive many incentives
• Merchandise may be brought in duty-free for purposes such as storage, repacking, display, assembly or manufacturing
• Imports may be landed and stored quickly without full customs formalities
• In addition, Arizona is the only state that reduces property taxes by 75% for businesses located within a Foreign Trade Zone or Sub-Zone

Military Reuse Zone Program (MRZ)

• Companies locating within a state’s Military Reuse Zone may be eligible to receive corporate income, property, and sales tax benefits
• Nonrefundable corporate income tax credits of up to $10,000 per qualified employee
• 75% reduction in property taxes for 5 years
• State and county construction sales tax exemption

Job Training Program

• Job training grants of up to $8,000 per employee for a maximum $1.5M
• Employers awarded grants of up to 75% of expenses incurred while providing technology skills training

R&D Tax Credit Program

• Refundable and nonrefundable corporate income tax credits for qualified research and development done in Arizona, including company funded research at a state university
• Credit amount is 24% of first $2.5 million in qualifying expenses and plus 15% of the qualifying expenses in excess of $2.5 million
• Qualifying small companies (less than 150 FTE) can apply to make their credit refundable (75% of nonrefundable credit value).  A company can receive up to $2M in refundable credits per year
• Research and Development Tax Credit now includes a 10% bonus credit for eligible expenses paid to colleges and universities under the Arizona Board of Regents. (HB2001)

Additional Depreciation

• Companies not receiving property tax incentives under the RETIP, EZ, FTZ, or MRZ programs can elect to take additional depreciation on their personal property
• Additional depreciation encourages new capital investment by quickly reducing personal property tax liability

Private Activity Bonds

• In Arizona, private activity bonds are issued through Industrial Development Authorities.  They can be used to finance manufacturing facilities, warehouses, office buildings, parking facilities, infrastructure, etc.
• Interest on private activity bonds for infrastructure is exempt from federal income tax
• Manufacturers can utilize up to $10 million in bonds

Arizona Competitiveness Package

Arizona Competes Fund

• Deal–closing fund of $25 MM to attract base industry

Arizona Quality Jobs Program

• $9,000 credit over three years for new qualified jobs

Accelerated Depreciation

• Reduces personal property taxes on equipment and machinery

Corporate Income Tax Rate Reduction

• By 2014, corporate income tax rate steadily decreases from 6.968% to 4.9%

100% Sales Factor

• Starting in 2014, sales factor ramps up from 80% to 100%