Grants

Arizona Competes Fund:  Deal closing fund that awards discretionary grants to businesses that create new jobs with wages at or above the median county wage.  A total of 25% of program funds are dedicated to support business attraction and expansion projects located on tribal lands and in rural areas. The program was recently amended to give priority to economic development projects planned for counties along with Arizona-Mexico border and in counties with military facilities.  

TAX CREDITS

Quality Jobs Tax Credit:  Corporate income tax credits of up to $9,000 per job are available to businesses that make capital investments and create new jobs with wages at or above 100% of the median county wage. To qualify, businesses located in municipalities with at least 50,000 residents in Maricopa (Phoenix) and Pima (Tucson) counties must create at least 25 jobs and make a minimum capital investment of $5 million.  Businesses that locate or expand in municipalities with fewer than 50,000 residents in Maricopa and Pima counties or in the 13 remaining Arizona counties that are classified as “rural” must create at least 5 jobs and invest $1 million to qualify for the program.  Tax credits are disbursed in 3 equal installments of up to $3,000 per year for up to 3 years and are non-refundable and non-transferrable.  Unused credits can be carried forward for up to 5 years.

Qualified Facility Tax Credit:  To simulate investments in manufacturing, corporate headquarters, and R&D-related manufacturing facilities, the Arizona Commerce Authority (ACA) offers refundable tax credits to companies that make capital improvements and create net new full-time jobs.  To qualify for the incentive, at least 51% of the net new full-time jobs must have wages at or above 125% of the Arizona median wage for production occupations (reduced to 100% of median wage if project is located in rural area) and the company must pay at least 65% of employee’s health insurance premiums or membership costs.  Quality Facility Tax Credits are authorized on a first-come, first-served basis with the maximum credit amount equal to the lesser of: 10% of the total qualified investment made at the facility; or $20,000 per qualified job created; or $30 million per taxpayer.   Tax credits are claimed in 5 equal installments over 5 consecutive taxable years.  

Research and Development Income Tax Credit: Provides refundable and non-refundable state income tax credits for qualified research and development activity in Arizona.

TAX EXEMPTIONS

Sales Tax Exemption:  Machinery and equipment used directly in manufacturing or research and development are exempt from sales tax.

Computer Data Center Tax Exemption: A capital investment made in the establishment or expansion of a data center that exceeds $25 million ($50 million in Maricopa and Pima counties) is eligible for Transaction Privilege Tax (TPT) and Use Tax exemptions for up to 20 years. The definition of eligible capital investment was recently expanded to include leased land, buildings, modular data centers, and computer data center equipment.

SPECIAL ZONING

Military Reuse Zone (MRZ) Incentive: The State has designated two former military bases in the Phoenix area as special purpose zones. Aviation and aerospace companies that manufacture, assemble, or fabricate products and businesses that provide aviation or aerospace services may receive a 5 year, 73% reduction on real and business personal property taxes. In addition to the tax abatement, eligible businesses that create new jobs are entitled to a tax credit that can be used to offset the Arizona income and/or insurance premiums tax.  The credit is equal to $7,500 for each non-dislocated worker hired and $10,000 for each dislocated worker hired.

JOB TRAINING

Arizona Job Training Program:  This discretionary program provides companies with reimbursable grants that cover up to 75% of eligible training costs for new employees and up to 50% of eligible training costs for existing employees.  

 

Last updated: April 2016

 


 
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