State Incentives, Programs and Grants
Arizona’s new Competitiveness Package (HB2001) provides the most sweeping economic development legislation seen in decades. Arizona is committed to helping businesses succeed. The many new features and incentives allow businesses to:
- Earn income tax credits up to $9,000 for each new job under the Quality Jobs Program
- Obtain renewable energy income tax credits and property tax reductions
- Receive up to $1.5 million in reimbursable grants to train employees
- Leverage up to a 34% research and development tax credit
- Take advantage of Arizona's 100% electable sales factor for multi-state corporations
- Benefit from a 30% reduction in Arizona’s corporate income tax rate
- Capitalize on Arizona’s reduced commercial property assessment ratio – 18% by 2017
- Improve your bottom line by a 15% increase in personal property exemptions
Below is a high level overview of incentive programs and grants. Please contact us for more details.
Incentives Administered by ACA
Angel Investment
An investor may obtain an income tax credit of up to 35% for investing in a qualified small business. Companies are encouraged to learn more about becoming certified by ACA.
More information
Arizona Innovation Accelerator Fund
$18.2 million loan participation program to stimulate financing to small businesses and manufacturers, in collaboration with private finance partners, to foster business expansion and job creation in Arizona.
More information
Arizona Innovation Challenge
The Arizona Innovation Challenge is an investment in the minds of talented entrepreneurs in Arizona and around the world. The ACA will award $1.5 million to the most promising technology ventures that participate in the Challenge (awards may range from $100,000 to $250,000).
More information
AZ Fast Grant
Enables Arizona-based technology companies to initiate the commercialization process. The grant will pay up to $7,500 to provide one or more of select professional consulting services.
More information
AZ STEP Grant
Grant funding from the U.S. Small Business Administration (SBA) with matching funds contributed by the Arizona Commerce Authority (ACA) offering a number of services and tools to Arizona small businesses as they go global for the first time with sales or enter new, international markets.
More information
Commercial/Industrial Solar
Businesses installing a solar energy device at an Arizona facility may be eligible for an income tax credit of up to $50,000 per tax year.
More information
Healthy Forest
Harvesters, initial processors and transporters of small diameter timber, may receive: Transaction Privilege Tax Exemptions, Use Tax Exemption and New Job Income Tax Credits.
More information
Job Training
Provides reimbursable grants to employers that implement job‐specific training plans for new jobs or for training plans that increase the skill level of current employees.
More information
Military Reuse Zone
Companies located in a zone, can benefit from a Transaction Privilege Tax Exemption, Tax Credit for net new jobs and Property Tax Reduction.
More information
Quality Jobs
Provides income tax credits of up to $9,000 for each new quality job created.
More information
RESEARCH & DEVELOPMENT
Refundable income tax credits are available for investments in research and development activities conducted in Arizona. The tax credit starts at 22% of the qualified R&D expenses for amounts in excess of expenditures from the previous year. Recent legislation enhances the tax credit amount up to 34% if increased R&D expenditures are made in conjunction with an Arizona public university.
More information
Renewable Energy Tax Incentive
Companies engaged in the solar, wind, geothermal and other renewable energy industries may obtain up to a 10% refundable income tax credit and up to a 75% reduction on real and personal property taxes.
More information
Bonds
PAB
Tax exempt bond financing, for federal purposes, offers an alternative financing mechanism for certain projects.
More information
QECB
Tax credit bonds are available as an alternative financing mechanism for certain green projects.
More information
INCENTIVES ADMINISTERED BY OTHER AGENCIES
Additional Depreciation
Accelerates depreciation schedules for prospective acquisitions of commercial personal property. Depreciation schedules for most equipment classes provide for depreciation down to 2.5% of original value, thus virtually eliminating the tax liability. Recent legislation further improved this program to help companies recover their investments even faster.
More Information
Foreign Trade Zone
Businesses, located in a zone or sub-zone are eligible for up to an 80 percent reduction in state real and personal property taxes.
More Information
Health Insurance Premium
A tax credit is available to a health care insurer for insuring individuals and small businesses who were not previously covered by health insurance.
More Information
Lease Excise
All real property tax has been waived and replaced with an excise tax that is an established rate per square foot and based upon the type of use.
More Information
Pollution Control Tax Credit
Provides a 10 percent income tax credit on the purchase price of real or personal property used to control or prevent pollution.
More Information
Renewable Energy Production Tax Credit
An income 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. Click here to view program details. Questions can be directed to Georganna Meyer (602-716-6927) or Elaine Smith (602-716-6924).
Sales Tax Exemption for Machinery and Equipment
Exemptions are available for:
- Machinery or equipment used directly in manufacturing, see ARS 42-5159(B)(1).
- Machinery, equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution, see ARS 42-5159(B)(4).
- Machinery or equipment used in research and development, see ARS 42-5159(B)(14).
Questions can be directed to Christie Comanita (602-716-6791).
Solar Liquid Fuel Tax Credit
Income tax credits are available for research and development, production and delivery system costs associated with solar liquid fuel. Click here to view program details. Questions can be directed to Georganna Meyer (602-716-6927) or Elaine Smith (602-716-6924).
Federal
Work Opportunity
The Work Opportunity Tax Credit (WOTC) is a federal tax credit of up to $9,000 that Congress provides to private-sector businesses for hiring individuals from nine target groups who have consistently faced significant barriers to employment.
More Information
Small Business Innovation Research (SBIR) Program
SBIR is a competitive program that encourages small businesses to explore their technological potential, as well as, providing incentive to profit from its commercialization.
More Information
Small Business Technology Transfer (STTR) Program
STTR is an important small business program that expands funding opportunities to meet the nation's scientific and technological challenges in the 21st century.
More Information