AZ Incentives | Finance, Loans, IRB, Workforce Development

A comprehensive list of Arizona financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.


https://businessfacilities.com/2015/01/az-incentives-and-workforce-development-guide/
A comprehensive list of Arizona financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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Arizona Incentives and Workforce Development Guide

AZ Incentives | Finance, Loans, IRB, Workforce Development

For a list of Arizona economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

 

FINANCING

Arizona Innovation Challenge (AIC): This is an annual business plan competition awarding $1.5 million annually to talented entrepreneurs that are solving today’s most challenging problems with technology-based solutions. AIC winners receive up to $150,000 each in capital to grow their businesses, advancing innovation and technology commercialization opportunities in Arizona.

Private Activity Bonds: With oversight of the Arizona Finance Authority, these bonds are issued to finance construction and equipment purchases associated with industrial and manufacturing facilities, residential rental projects, facilities for the furnishing of water, sewage and solid waste facilities and more. Interest on private activity bonds may be exempt from federal income tax for most bondholders.

 

TAX INCENTIVES

Healthy Forest Enterprise Incentives: These tax incentives are provided to certified businesses for their support and operations pertaining to forest improvement in Arizona. Certified businesses are primarily engaged in operations that process, harvest or transport qualified forest products. Multiple tax incentives are available (Transaction Privilege Tax exemptions, property tax reduction, employment income tax credit, etc.).

Angel Investment Tax Credit: Subject to funding, this is an income tax credit of up to 35% available for investments of at least $25,000 in small businesses certified under the program by the Arizona Commerce Authority. Additionally, capital gains derived from a qualified investment under the Angel program are exempt from taxation in Arizona.

Computer Data Center (CDC) Tax Exemptions: These sales and use tax exemptions are available for up to 20 years in connection with purchases of CDC equipment by owners, operators and co-location tenants of computer data centers certified by the Arizona Commerce Authority. Investment requirements at a new or expanding CDC include:

  • $50 million in new investment if the CDC is located in Maricopa or Pima county; or
  • $25 million in new investment if the CDC is located in any other county.

Foreign Trade Zone (FTZ): This is a reduction in state real and personal property taxes up to 72.2% for businesses located in an FTZ. Other benefits include a duty-free zone, no time constraints on storage, shorter transit time (direct delivery) and weekly entries.

Military Reuse Zone (MRZ): These incentives are for businesses operating in one of two MRZs in Arizona (Williams Gateway Airport in Mesa and Phoenix/Goodyear Airport in Goodyear). They include:

  • Transaction Privilege Tax Exemption: Exemption from transaction privilege tax on contracts for certain types of construction at an MRZ.
  • Property Reclassification: Both real and personal property can be reclassified from class one (18% assessment ratio) to class six (5% assessment ratio), which may result in property tax savings of up to 72.2% for a period of five years.

Qualified Facility Tax Credits: This is a refundable income tax credit for a manufacturing facility or a manufacturing-related research or headquarters facility. The credit is equal to 10% of the capital investment in a new or expanding facility or $20,000 per qualified new job created, whichever is less. 51% of the new jobs at the facility must pay wages of at least 125% of the state median production wage (100% in rural areas) and offer health insurance for which the employer pays at least 65% of the premiums.

Quality Jobs Tax Credit: This is a $9,000 nonrefundable income tax credit for each qualifying new job, claimed $3,000 per year for three years. Eligibility requirements are as follows:

  • Metro locations: Capital investment of at least $500,000 and at least 25 qualifying new jobs that meet tiered wage requirements.
  • Rural locations: Capital investment of at least $100,000 and at least 5 qualifying new jobs that meet tiered wage requirements.

Renewable Energy Production Tax Credit: This is a nonrefundable income tax credit for utility-scale generation systems based on the amount of electricity produced annually for a 10-year period using solar light, solar heat, wind or certain types of biomass. The income tax credits established are intended to promote investment in renewable energy production using low-emission and zero-emission electricity generation technologies. The credits are only for qualified energy generators with at least 5 megawatts generating capacity.

Renewable Energy Tax Incentive Program: This property reclassification is for manufacturing facilities or headquarters facilities for businesses primarily engaged in manufacturing renewable energy equipment. 51% of the new jobs at the facility must pay wages of at least 125% of the state median and offer health insurance for which the employer pays at least 80% of the premiums.

Research and Development Tax Credit: This is an income tax credit for investing in R&D in Arizona. The R&D tax credit is equal to 24% of the first $2.5 million in qualifying expenses plus 15% of the qualifying expenses in excess of $2.5 million. The credit is equal to 34% of qualifying expenses when made in conjunction with an Arizona public university. Companies with fewer than 150 employees worldwide can apply to the Arizona Commerce Authority for approval of a refund of 75% of the current year’s excess credit amount in lieu of carrying the excess credit forward.

Sales Tax Exemptions are available for:

  • Machinery or equipment used directly in manufacturing.
  • Equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution.
  • Machinery or equipment used in research and development.
  • Electricity and natural gas used by businesses principally engaged in manufacturing operations.

 

WORKFORCE DEVELOPMENT

Job Training Grant: This grant is awarded to companies that meet tiered wage requirements (based on the size and location of the employer), and is awarded through a competitive process. The grant provides reimbursement for job training, up to 75% of the costs, up to $5000 per employee ($8000 for small businesses or those in rural areas). The company agrees to match 25% of the cost.

Navigator Program: This program provides no-cost talent acquisition assistance to companies moving to or expanding in Arizona. It is a value-added program, and doesn’t involve tax credits or reimbursement, but allows companies to avoid certain expenses normally associated with starting a new location here in the State. Arizona is one of the few states to assist in the navigation of federal workforce programs, as well as building strategic partnerships between the company and vital community organizations.

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