Arizona Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions, or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Arizona, so we spoke with Jesse Broderick of Sumit Credits (link to site here), who provides tax credit services to several Arizona clients.  Also see Arizona economic development site, click here.
Arizona offers a wide selection of credits and incentives for new and existing businesses.  CNBC ranked Arizona #26 in their 2017 America’s Top States for Business survey (Georgia was #2 in the same survey).  Arizona ranked next to last in education.
Incentives and Credits include:
  • Tax Credit for Hiring Recipients of TANF payments (piggybacks off of Federal Work Opportunity Tax Credit WOTC).
  • Quality Jobs Tax Credit offers up to $9,000 of Arizona income or premium tax credits spread over a three-year period for each net new quality job.
  • Qualified Facility Tax Credit offers a refundable income tax credit equal eligible companies making a Capital Investment to establish or expand a Qualified Facilities.
  • Research & Development Tax Credit provides an Arizona income tax credit for increased research and development activities conducted in this state.
  • Other Incentives — Pollution Control Tax Credit, Renewable Energy Tax Credits, Quality Jobs Tax Credit, and several others.

Compared to Georgia, Arizona has:

  • Slightly higher corporate and lower personal income tax rates
  • Comparable combined state and local tax burden
  • A slightly wider range of incentives

Often criticized for its hodge-podge assortment of tax credits, Arizona certainly offers potential, since you almost never know what activities your clients have that could generate $$ credits.

To summarize, Arizona is above average for business tax incentives, and in the wintertime, you can’t beat the weather!

DaleSig