Taxes and incentives for Arizona business
Arizona and the Greater Phoenix area are committed to making the Grand Canyon State a great place to do business.
The state's corporate income tax rate is 4.9%. In addition, there is no corporate franchise tax, worldwide unitary tax, sales tax on manufacturing equipment or inventory tax. Arizona is also a right-to-work state with low workers' compensation and unemployment insurance costs.
The Arizona Commerce Authority, meanwhile, makes available more than $200 million in incentives
, including refundable tax credits, grants and property tax reductions.
Programs include:
- Qualified Facility Refundable Tax Credit – Offers a refundable income tax credit for the creation or expansion of manufacturing facilities in Arizona, including manufacturing-related research and develop or headquarters facilities.
- Research and Development Tax Credit – Both refundable and nonrefundable income tax credits are available for investments in research and development activities conducted in Arizona.
- Data Center Tax Exemption – Provides sales tax exemptions for data center equipment and construction for owners, operators, and colocation tenants of certified computer data centers.
- Foreign Trade Zone Program – Businesses located in a foreign trade zone or sub-zone are eligible for up to a 72.9% reduction in state real and personal property taxes. Merchandise may be brought in duty-free for purposes such as storage, repacking, display, assembly or manufacturing. Imports may be landed and stored quickly without full customs formalities.
- Sales Tax Exemption for Manufacturing – Exemptions are available for machinery or equipment used directly in manufacturing, research and development, and more.
- Quality Jobs Tax Credit – Offers income tax credits of up to $9,000 spread over a three-year period.
A complete list of incentives, rebates and other programs can be found on these SRP and sponsor sites:
A sampling of Arizona offers
| Incentive program | Description |
| Arizona Innovation Accelerator Fund | $18.2 million loan fund to stimulate financing to manufacturers |
| Commercial/industrial solar | Tax credit of up to $50,000 for installation of solar energy devices |
| Job training for new employees | Grants to cover 75% of an employer's eligible training expenses |
| Qualified Facility Credit of $20,000 per job at qualified facilities | Refundable tax credits of 10% of qualifying capital investment |
| Energy conservation bonds | Tax credit bonds available for retrofitting existing buildings |
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