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. At least 25% of funding appropriated each year is restricted to business attraction and expansion projects located on tribal lands or outside of Maricopa County (Phoenix), or both. Businesses that locate or expand in counties along the Arizona-Mexico border, counties with military facilities, and on tribal lands are given priority consideration for funding.

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 jobs that meet specific wage requirements.  The program was modified in 2017 to allow businesses that make lower capital investments but create higher paying jobs to be eligible for the incentive. 

Businesses that locate or expand in urban areas must meet one of the following capital investment, job creation, and wage requirements to participate in the program:

  • Make a minimum capital investment of $5 million and create at least 25 jobs with wages at 100% of the county median wage where the project is to be located
  • Make a minimum capital investment of $2.5 million and create at least 25 jobs with wages at 125% of the county median wage where the project is to be located
  • Make a minimum capital investment of $1 million and create at least 25 jobs with wages at 150% of the county median wage where the project is to be located
  • Make a minimum capital investment of $500,000 and create at least 25 jobs with wages at 200% of the county median wage where the project is to be located

Businesses that locate or expand in rural areas must meet one of the following capital investment, job creation, and wage requirements to participate in the program:

  • Make a minimum capital investment of $1 million and create at least 5 jobs with wages at 100% of the county median wage where the project is to be located

  • Make a minimum capital investment of $500,000 and create at least 5 jobs with wages at 125% of the county median wage where the project is to be located

  • Make a minimum capital investment of $100,000 and create at least 5 jobs with wages at 150% of the county median wage where the project is to be located

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: Refundable tax credits are available to qualified businesses that make investments and create net new full-time jobs at manufacturing, corporate headquarters or R&D-related manufacturing facilities. 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. 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, per year. 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 R&D 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.

 

Updated May 2017


 
BIGGINS LACY SHAPIRO & COMPANY
 
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