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Arizona Direct Financial Incentives 2012

Arizona's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include the Renewable Energy Tax Incentive Program and the Arizona Job Training Program.

Quality Jobs Tax Credit:
The primary goal of the Quality Jobs program is to encourage business investment and the creation of high-quality employment opportunities in the state. The program accomplishes this goal by providing tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona.The Quality Job 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.

Foreign-trade zones:
General-purpose trade zones and sub-zones are strategically located around the state. Arizona is the only state offering federally approved FTZ companies a permanent property tax reduction of up to 80 percent.

Military reuse zones:
This special-purpose zone targets manufacturers, assemblers or fabricators of aviation or aerospace products and providers of aviation or aerospace services. Companies locating within these zones qualify for property tax reductions of up to 75 percent for five years, state income tax credits of up to $10,000 for each new qualified employee and certain exemptions from the transaction privilege (sales) tax.

Renewable Energy Tax Incentive Program:
The program intends to encourage business investment that produces high quality employment opportunities in renewable energy industries. Begun in 2010, two benefits are offered under this new program: an income tax credit and property tax reduction (real and personal property). Assistance, program rules and details are available from the Arizona Commerce Authority, which administers the program.

Arizona Job Training Program:
The Arizona Job Training Program is a reimbursable grant program designed to meet the training needs of employers. The program may provide qualified employers cash assistance of up to $8,000 per employee for qualified, full-time employees in rural areas and up to $5,000 per employee in urban areas. Assistance, program rules, and details are available from the Arizona Commerce Authority, which administers the program.

Small Business Capital Investment Tax Credit Program (Angel Investment Program):
Program provides an income tax credit program for investors who make an investment in a small business. The program allows for an income tax credit equal to 30 or 35 percent of the qualifying investment amount over a three-year period.

Research and development income tax credit:
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.

Healthy Forest Enterprise Incentives Program:
Program provides tax incentives to businesses that add value to forest biomass, reduce the risk of wildfire, sustain or recover watershed or lessen insect manifestation. Benefits include income tax incentives, property tax reductions, fuel tax reductions and transaction privilege (sales) tax reductions.

Additional Depreciation Program:
Arizona tax laws provide an aggressive depreciation schedule to encourage new capital investment and reduce personal property tax liability.

Arizona State Contact:
Business Development Division
Arizona Commerce Authority
333 N. Central Ave. Suite 1900
Phoenix, AZ 85004
(800) 542-5684

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.

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