STATE INCENTIVES

The Qualified Facility tax credit program stimulates job creation and capital investment in the manufacturing sector. The program provides a refundable tax credit for qualifying capital investment made at a manufacturing facility, including a manufacturing-related research or headquarters facility. The credit is equal to the lesser of:

• 10% of the qualifying capital investment, or
• $20,000 per net new job at the facility, or
• $30,000,000 per taxpayer per year

Learn more here.

The Quality Jobs tax credit encourages business investment and the creation of high-quality employment opportunities in the state. The program offers up to $9,000 of Arizona income or premium tax credits spread over a three year period for each net new quality job. If the allowable tax credit exceeds the income or premium tax liability, any unused amount may be carried forward for up to five consecutive taxable years.

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The Research and Development tax credit program provides an Arizona income tax credit for increased research and development activities conducted in this state, including research conducted at a state university and funded by the company. The R&D tax credit has both non-refundable and refundable programs. The non-refundable credit is administered by the Arizona Department of Revenue. The refundable credit is administered by the Arizona Commerce Authority and is limited to companies with less than 150 full-time employees at all locations, worldwide.

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Companies that purchase machinery and equipment used directly in manufacturing in Arizona are exempt from paying sales tax. Additionally, businesses that are principally engaged in manufacturing are exempt from paying sales tax on the purchase of electricity or natural gas.

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• Additional Depreciation
• Personal Property Tax Rate of 25%
• No Inventory Tax