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Renewable Energy Business Tax Incentives

Date Last Updated1/29/2013
Incentive TypeTax
State/FederalAZ
Incentive Administrator/Contact OfficeArizona Commerce Authority
Incentive Initiation Date1/1/2010
Incentive Expiration Date12/31/2016
Incentive Size and Funding SourceIncome tax credits and property tax incentives are available for renewable energy companies choosing to establish or expand their manufacturing facilities and corporate headquarters in Arizona. Incentives will expire on December 31, 2019. Different incentive levels are available depending on how many full-time jobs are created and the salary for those jobs.

The amount of the income tax credit is up to 10% of the taxpayer's total capital investment if:
  • A manufacturing facility creates at least one and a half full-time employees for each $500,000 of capital invested.
  • A headquarters creates at least one full-time employee for each $200,000 of capital invested.
If the capital ratios above cannot be met, then the credit will be equal to 10% of:
  • $500,000 per one and a half new full-time employee in a manufacturing facility.
  • $200,000 per one new full-time employee in a headquarters.
The credits are refundable, but must be claimed in five equal installments over 5 consecutive taxable years. The annual limit for any single taxpayer is $30 million. The aggregate amount of credits that can be approved state-wide is $70 million per taxable year.

If approved by the Arizona Department of Commerce for the property tax incentive, the company's property will be designated as a class 6 property for a period of:
  • 10 years if 51% or more of the full-time employees are paid 125% to 199% of the median income in Arizona.
  • 15 years if 51% or more of the full-time employees are paid 200% or more of the median income in Arizona.
Class 6 properties have an assessment ratio of 5%, while class 1 properties have an assessment ratio of 20%.
Eligible RecipientCompanies in the solar, wind, geothermal and other renewable energy industries that are expanding or locating in Arizona.
Eligible FuelDoes Not Specify
Eligible Project Size (MW)Does Not Specify
Minimum Efficiency Required (%)Does Not Specify
Other Selected Eligibility CriteriaA business must meet certain minimum requirements for the quantity and quality of new jobs created. To be eligible for income tax credits, 51% or more of the new full-time employees must be paid a wage that equals or exceeds 125% of the median income in Arizona, and the employer must pay 80% or more of the premium for all full-time employees health insurance. To be eligible for property tax incentives, the business must invest at least $25 million in facilities, equipment, land and infrastructure.
Application Form(s)Initial Application For Pre-Approval (PDF) (8 pp, 84K).
Resource Website(s)

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