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 incentivesOpen new site., including refundable tax credits, grants and property tax reductions.

Programs include:

  • Qualified Facility Refundable Tax CreditOpen new site. – 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 CreditOpen new site. – Both refundable and nonrefundable income tax credits are available for investments in research and development activities conducted in Arizona.
  • Data Center Tax ExemptionOpen new site. – Provides sales tax exemptions for data center equipment and construction for owners, operators, and colocation tenants of certified computer data centers.
  • Foreign Trade Zone ProgramOpen new site. – 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 ManufacturingOpen new site. – Exemptions are available for machinery or equipment used directly in manufacturing, research and development, and more.
  • Quality Jobs Tax CreditOpen new site. – 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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