The International Operations Center Program, authorized by (A.R.S. § 41-1520), provides utility tax relief, consisting of deductions from the tax base for gross proceeds of sales or gross income derived from sales of electricity or natural gas to a business that operates an International Operations Center (“IOC”) in Arizona that is certified by the Arizona Commerce Authority (the “Authority”) pursuant to A.R.S. §42-5063(C)(7).
Pursuant to A.R.S. §43-1164.05, applicants that were initially certified prior to January 1, 2019 qualify for the Renewable Energy Investment and Production for Self-Consumption Program, which provides an income tax credit for investment in new renewable energy facilities that produce energy for self-consumption using renewable energy resources, if the power will be used primarily for an IOC.
The Authority is authorized to certify IOCs through December 31, 2030.
BASIC ELIGIBILITY REQUIREMENTS
The requirements to qualify as an IOC are set forth in the Program Rules, but generally, an Owner or Operator must:
- Invest a total of $1,250,000,000 in a facility within a ten-year period;
- Invest not less than $100,000,000 per year in the facility, with carryforward credit provided for years in which more than $100,000,000 is invested;
- Invest a minimum of $100,000,000 in a new Renewable Energy Facilities (“REF”); and
- By the fifth year an REF is in operation, at least 51% of the energy produced must be used for self-consumption in Arizona.
“International Operations Center” or “IOC” means a facility or connected facilities under the same ownership that are subject to the investment thresholds under A.R.S. § 41-1520 (D) and that self-consume renewable energy from a qualified facility pursuant to A.R.S. § 41-1520 (D).
“Renewable Energy Facility” means a facility in which the Owner, Operator, Affiliated Entity, or a Third-Party on behalf of and for the benefit of the taxpayer, invested at least $30,000,000, that has at least twenty megawatts of generating capacity or a minimum typical annual generation of forty thousand megawatt hours, that is located on land in this state and that produces electricity using a renewable energy resource.
“Utility Relief” means the mitigation of the tax burden on the retail purchaser of electricity or natural gas through the application of A.R.S. § 42-5063 (C)(7), A.R.S. § 42-5159 (G)(2) and A.R.S. § 42-6012(2).
Questions regarding the Program, may be directed to the Program Manager.
An Owner or Operator may apply for certification of an IOC by submitting an application through the “Authority’s Electronic Application System”.
The Authority will attempt to make a determination with regard to each substantially complete application within 60 days after receipt of any or all information requested by the Authority in order for the application to be rendered complete or, in absence of a request for additional information, within 60 calendar days of the application’s submission.
If an application is approved, the Program Manager will request the Owner or Operator remit a non-refundable processing fee of $50.00. The fee may be made by credit card by accessing the ACA payment portal or made by check, ACH, or wire transfer.
After receipt of the required processing fee the Authority will issue a written certification to the Owner or Operator, and the Authority shall send a copy of the certification to the Department of Revenue (“Revenue”).
Proprietary business information contained in the application and any annual report is regarded as confidential and may not be disclosed to the public. However, the Authority and Revenue are authorized to disclose the name of a certified IOC and to share all information necessary to administer the program.
To receive updates about the program as they become available, click here to add your name to the stakeholders list. Please be sure to identify the International Operations Center Program as the program for which you would like notification.