Arizona Business Tax Credits: The Grand Canyon State Offering Incentives for Business Relocations (Part II)

Continuing from Part I our series on available tax credits and incentives to locate your business in Arizona, here are five additional opportunities for Arizona-based businesses to lower their tax burdens:

Computer Data Center Program: The Grand Canyon State wants to encourage computer data center operations to relocate here. Toward this end, the Arizona Commerce Authority offers Transaction Privilege Tax and Use tax exemptions for up to 20 years for qualified purchases. These exemptions are applicable to state, county and local taxes.

Angel Investment Program: Arizona is seeking investors to provide capital for the expansion of small businesses in the state. Investors that qualify for the program may receive a tax credit of up to 35% of the total investment amount for bioscience companies and businesses based in rural areas. For other qualified businesses, the credit is capped at 30%. The Angel Investment tax credit is non-refundable, but it can be carried over and applied toward tax liability reduction for up to three years.

Renewable Energy Tax Incentive: Tax incentives are available in Arizona for companies in renewable energy industries such as wind, solar, geothermal, etc. Qualified companies may be eligible for both a 10% (refundable) income tax credit and a property tax reduction of up to 75% for up to a total of 15 years.

Commercial Solar Tax Credit: In addition to the renewable energy credit, companies that install a solar energy device at their facility in Arizona can qualify for another income tax credit of 10% of the installation costs up to $50,000 per company per year. This non-refundable credit can be carried over and applied toward income tax liability for up to five years.

Machinery and Equipment Sales Tax Exemption: Arizona’s state sales tax is 5.6%, but it can be as high as 10% or more depending on the county and/or city wherein you make the purchase. However, if you acquire machinery and/or equipment that will be used directly in manufacturing, research and development, or production/transmission of electrical power, you may qualify for a sales tax exemption on your purchase.

Arizona has a number of other tax incentives for moving to the state, ranging from Foreign-trade and Military re-use zones to accelerated depreciation programs. To find out how your business can benefit from relocating in the Grand Canyon State, speak to a local tax professional.

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