Operations & Growth • Arizona Incentives

Arizona offers a wide variety of economic incentives to encourage high-wage job growth and capital investment.  The Arizona Department of Commerce is the central source of information for Arizona's business incentives.

The Arizona Department of Commerce Job Training Program is a job-specific, reimbursable grant program that supports the design and delivery of customized training to meet the specific needs of employers, create new jobs and help increase the skill and wage levels of employees in Arizona.   This program can provide grant money to your company for training new employees, or to supplement training programs for incumbent employees.

Arizona's Enterprise Zone Program offers a State Corporate Income Tax Credit equal to up to $3,000 over a three-year period per net new employee for businesses locating or expanding within these designated zones. In addition, the state of Arizona offers a Property Reclassification to minority- or women-owned, or small, independently owned manufacturing businesses, which invest at least $2 million in fixed assets in urban areas and up to $1 million in rural areas.  The reclassification reduces property taxes and is good for five years.

State Income Tax Credit for Qualified Research and Development allows a company to receive a tax credit for increased expenditures in qualified research and development conducted in Arizona, including research conducted at a state university and funded by the company.  The credit is 20% of the first $2.5 million in increased research expenses and 11% of the remaining amount. The program also has a 15-year carry-forward.

Pollution Control Tax Credit provides a 10% income tax credit on real or personal property used to control or prevent pollution.

Accelerated Depreciation provides an aggressive accelerated depreciation schedule to encourage new capital investment and reduce a company's personal property tax liability.  We work with company personnel to analyze tax liability and identify specific benefits of the accelerated depreciation schedule.

The Foreign Trade Zone Program offers the following two primary benefits:
1.  Duty-Free Storage: The FTZ is a secured area treated as though legally outside of the U.S. Customs territory where merchandise may be brought duty-free for purposes such as storage, re-packing, display, assembly or manufacturing.  Imports may be landed and stored quickly without full customs formalities.
2.  Property Tax Reduction:  Arizona is the only state in the U.S. that has enacted special legislation that provides an 80% reduction in real and personal property taxes for companies qualifying for FTZ or sub-zone designation.

For more information about these incentives, please contact the Arizona Department of Commerce at 602-771-1124.

The Governor's Council for Innovation and Technology (GCIT), a catalyst for developing new economic development strategies, focuses primarily on improving Arizona's knowledge-based economy.  As the Governor's principal advisory group for innovation and technology, the council is charged with:

• Developing the framework and vision to enable Arizona to become a global leader in innovation and technology research, development and product creation
• Strengthening the innovation and technology infrastructure of Arizona
• Evaluating capital formation in Arizona and developing recommendations that support Arizona's global competitiveness in the 21st century
• Promoting technology transfer and inspiring partnerships between Arizona's business community and university researchers
• Creating and retaining an active marketplace of quality jobs in Arizona.

Economic development organizations at the regional and local level provide consultation and assistance at no charge, and may offer incentives, usually in the form of tax rebates, development fee reductions or subsidized real estate transactions to encourage job creation and business ventures in their communities.  These organizations are listed in the statewide economic development directory maintained by the Arizona Department of Commerce.