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Recognized as one of the top 10 states for job growth, companies locating or expanding in Arizona benefit from low business cost, tax credits and incentive programs designed to increase access to capital and minimize regulation. Arizona boasts no corporate franchise tax, no income on dividends from out-of-state subsidiaries, and no worldwide unitary tax in addition to having one of the lowest corporate income tax rates in the country at 4.9 percent.​​​
arizona state incentives
Additional Depreciation

Additional depreciation substantially reduces tax liability for most personal property devoted to commercial, industrial and agricu​ltural uses by reducing the taxable value during its first five years of use.
 
Angel Investment
Eliminates Arizona capital gains tax liabilities associated with investments in small businesses.
 
 
Commercial/Industrial Solar
Arizona income tax credit for the installation of solar energy devices in Arizona business facilities.
 
 
Competitive States Analysis Chart
This chart provides a market-by-market comparison of the Arizona business climate to other states.
 
 
Computer Data Center (CDC) Program
Provides sales and use tax exemptions at the state, county and local levels, on qualifying purchases of equipment.  An owner, operator or qualified co-location tenant of a data center may receive the exemptions provided by the incentive for up to 10 calendar years or 20 calendar years if the CDC qualifies as a Sustainable Redevelopment Project.
 
 
Foreign Trade Zones
Businesses located in a zone or sub-zone are eligible for up to a 72.9 percent reduction in state real and personal property taxes.
 
 
Private Activity Bonds
Securities issued by or on behalf of a local government to provide debt financing for projects used for the business of a private user. The program can be used for the construction of industrial and manufacturing facilities as well as the purchase of equipment.
 
 
Qualified Facility
Provides a refundable tax credit to expanding or locating manufacturing facilities including manufacturing-related research and development or headquarter facilities.
 
 
Quality Jobs
Offers up to $9,000 of Arizona income or premium tax credits to employers creating a minimum number of net new jobs and capital investment in Arizona.
 
 
Renewable Energy Production Tax Credit
The program offers a refundable income tax credit up to 10% of the new qualifying investment to utility-scale generation in the solar, wind, geothermal and other renewable energy industries.  
 
 
Research & Development
The Research and Development (R&D) incentive 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. 
 

Sales Tax ​Exemptions for Manufacturing
Exemptions are available at the state and county level for machinery or equipment, as well as the electricity or natural gas used directly in manufacturing. 
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Additional depreciation substantially reduces tax liability for most personal property devoted to commercial, industrial and agricu​ltural uses by reducing the taxable value during its first five years of use.
 
Eliminates Arizona capital gains tax liabilities associated with investments in small businesses.
 
 
Arizona income tax credit for the installation of solar energy devices in Arizona business facilities.
 
 
Provides sales and use tax exemptions at the state, county and local levels, on qualifying purchases of equipment.  An owner, operator or qualified co-location tenant of a data center may receive the exemptions provided by the incentive for up to 10 calendar years or 20 calendar years if the CDC qualifies as a Sustainable Redevelopment Project.
 
 
Foreign Trade Zones
Businesses located in a zone or sub-zone are eligible for up to a 72.9 percent reduction in state real and personal property taxes.
 
 
Private Activity Bonds
Securities issued by or on behalf of a local government to provide debt financing for projects used for the business of a private user. The program can be used for the construction of industrial and manufacturing facilities as well as the purchase of equipment.
 
 
Provides a refundable tax credit to expanding or locating manufacturing facilities including manufacturing-related research and development or headquarter facilities.
 
 
Quality Jobs
Offers up to $9,000 of Arizona income or premium tax credits to employers creating a minimum number of net new jobs and capital investment in Arizona.
 
 
Renewable Energy Production Tax Credit
The program offers a refundable income tax credit up to 10% of the new qualifying investment to utility-scale generation in the solar, wind, geothermal and other renewable energy industries.  
 
 
The Research and Development (R&D) incentive 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. 
 
Exemptions are available at the state and county level for machinery or equipment, as well as the electricity or natural gas used directly in manufacturing. 

for additional information

please contact the APS Economic Development team or the Arizona Commerce Authority.​

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