Taxes and incentives for Arizona business

Arizona and the Greater Phoenix area are committed to making the Grand Canyon State a great place to do business.

The state's corporate income tax rate will decline to 4.9% by 2017. In addition, there is no corporate franchise tax, worldwide unitary tax, sales tax on manufacturing equipment or inventory tax. Arizona is also a right-to-work state with low workers' compensation and unemployment insurance costs.

The Arizona Commerce Authority, meanwhile, makes available more than $200 million in incentives, including refundable tax credits, grants and property tax reductions.

Programs include:

• Qualified Facility Refundable Tax Credit – Offers a refundable income tax credit for the creation or expansion of manufacturing facilities in Arizona, including manufacturing-related research and develop or headquarters facilities.
• Research and Development Tax Credit – Both refundable and nonrefundable income tax credits are available for investments in research and development activities conducted in Arizona.
• Data Center Tax Exemption – Provides sales tax exemptions for data center equipment and construction for owners, operators, and colocation tenants of certified computer data centers.
• Foreign Trade Zone Program – Businesses located in a foreign trade zone or sub-zone are eligible for up to a 72.9% reduction in state real and personal property taxes. 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.
• Sales Tax Exemption for Manufacturing – Exemptions are available for machinery or equipment used directly in manufacturing, research and development, and more.
• Quality Jobs Tax Credit – Offers income tax credits of up to $9,000 spread over a three-year period.

A complete list of incentives, rebates and other programs can be found on these SRP and sponsor sites:

• Incentives offered by the Arizona Commerce Authority
• New-construction rebates offered by SRP