Tax Credits

Lease Excise Tax
The Government Property Lease Excise Tax Program has been established by the State of Arizona and is available to businesses that lease parcels from the city rather than own them outright. All real property tax has been waived and replaced with an excise tax that is an established rate per square foot and based upon the type of use. The rate is reduced every 10 years by 20% until it reaches the 51st year, when the tax drops to 0.

Sales Tax Exemption for Manufacturing
Sales tax exemptions are available on:
  • Machinery, equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution
  • Machinery or equipment used directly in manufacturing
  • Machinery or equipment used in research and development
Renewable Energy Tax Credit
Provides tax incentives to companies in the solar, wind, geothermal, and other renewable energy industries who are expanding or locating in Arizona. The program offers 2 benefits:
  • Up to a 10% refundable income tax credit
  • Up to a 75% reduction on real and personal property taxes
For additional information, please contact:
Michelle Vega
Ph: 602-771-1132
Email

Commercial or Industrial Solar Energy Tax Credit
Provides businesses that install a solar energy device at its Arizona facility a tax credit equal to 10% of the installed cost of the solar energy device not to exceed $25,000 in credits for 1 building in a single tax year and $50,000 total credits per business per tax year. Tax credits can be used to offset Arizona income tax liability and any unused credit amounts can be carried forward for a 5-year period.

For additional information, please contact:
Michelle Vega
Ph: 602-771-1132
Email

Pollution Control Tax Credit
Provides a 10% income tax credit on the purchase price of real or personal property used to control or prevent pollution.

Research & Development Income Tax Credit
From 2011 - 2017, tax credit will be equal to 24% of the first $2.5 million in qualifying expenses plus 15% of the qualifying expenses in excess of $2.5 million. For 2018 and thereafter, the tax credit rates will return to 20% of the first $2.5 million in qualifying expenses plus 11% of the qualifying expenses in excess of $2.5 million.

A qualifying company may be eligible to claim a partial refund of its current year excess R&D credit. A company that is otherwise qualified for the R&D tax credit who employs less than 150 full-time employees can apply for a partial refund of up to 75% of the excess credit amount.

An additional credit amount is allowed if the taxpayer made basic research payments during the tax year to an Arizona state university. Beginning in 2011, the additional credit amount is equal to 10% of the basic research payments that constitute excess expenses for the tax year over the base amount.