Becoming the global leader in the solar industry is high on Arizona’s priority list, and Governor Jan Brewer continues to develop and refine incentives to attract the highest quality jobs to Arizona.
Combining tax cuts, training, investment and recruitment opportunities, Governor Brewer’s recently enacted Arizona Competitiveness Package represents another major effort in the state’s initiative to bring quality jobs to our citizens. The Arizona technology council says the plan “embraces high-technology industries as the engine that will drive our state for the next 30 years.”
Note: Incentives, programs and tax benefits are available subject to qualification according to the enabling legislation or administrative guidelines, as may be applicable. Inclusion is for information purposes and does not constitute an offer.Arizona Competitiveness Package – provides aggressive new pro-business features, including:
- Renewable Energy Tax Incentive Program (RETIP) – provides tax incentives to companies in the solar, wind, geothermal and other renewable energy industries that are expanding or locating in Arizona. The program offers two benefits: up to a 10 percent refundable income tax credit on qualified capital investment and up to a 75 percent reduction on real and personal property taxes.
- Quality Jobs Program, with corporate tax credits of up to $9,000 for each qualifying new job.
- Arizona Competes deal-closing fund
- R&D tax credit for increased activities with an additional 10 percent if partnering with a university.
- A four-year, phased-in reduction of the state’s corporate income tax from 6.97 percent to 4.9 percent beginning in 2014. This will give Arizona the nation’s fifth most competitive corporate income-tax rate.
- An increase in the electable state corporate income-tax sales factor to 100 percent, up from the current 80 percent.
- A 5 percent acceleration of the depreciation schedule for business personal property.
- Foreign Trade Zone – Arizona is the only state that has enacted special legislation that makes businesses, located in a zone or sub-zone, eligible for up to an 80 percent reduction in state real and personal property taxes. The reduction lasts for the entire time the company operates in the zone or sub-zone. Company must meet the Foreign Trade Zone federal eligibility guidelines. We believe that using the tax benefits of this program, which are unique to Arizona, would produce an effective tax rate on real and personal property in Arizona that would be significantly lower than virtually any other jurisdiction in the United States.
- Arizona Job Training Grants – a job-specific reimbursable grant program that supports the design and delivery of customized training plans for employers creating new jobs or increasing the skill and wage levels of current employees – considered one of the best workforce training grant programs in the nation.
- Sales and Use Tax Exemptions – exemptions are available for equipment and machinery used in manufacturing. The relevant citations in the Arizona revised statutes are: ARS 42-5159, Subsection B1 (Use Tax); and ARS 42-5061, Subsection B1 (Transaction Tax). Or, if the seller of the equipment is also the installer of the equipment, the following sections may apply: ARS 42-5075, subsections B7 and B9.
- Arizona Additional Depreciation Program (AADP) – encourages new capital investment and reduces personal property tax liability.
- Research and Development Income Tax Credit – Arizona provides a tax credit for investments in research and development in excess of expenditures from the previous year.
- Small Business Capital Investment Tax Credit Program (Angel Tax Credit) – expands early-stage investments in targeted Arizona small businesses by providing tax credits to investors who make capital investments in small businesses that are certified by the Arizona Department of Commerce.
- The Arizona Tax Credit for the Production of Electricity using Renewable Energy – a corporate tax credit awarded to utility-scale generation systems based on the amount of electricity produced annually for a 10-year period using solar or wind energy.The amount of the credit is based on the federal regular credit computation method for Arizona-qualified research expenses and Arizona basic-research payments. The current formula calculates the income tax credit equal to 24 percent of the first $2,500,000 in qualifying expenses. When qualifying costs exceed $2,500,000, the credit is $600,000 plus 15 percent of the amount exceeding $2,500,000. The Arizona Competitiveness Package enhances the tax credit by 10 percent if increased R&D expenditures are made in cooperation with an Arizona university. The enhancement to the program is capped at $10,000,000 in tax credits per year.
Check our complete list of state incentives, programs and grants.
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