Federal IncentivesSBA HUBZone Program
Navajo County, including the City of Show Low, is qualified as a HUBZone—giving eligible companies access to additional Federal contracting opportunities.
To be eligible for the program, a business must meet all of the following criteria:
- Designated as a small business by SBA standards.
- Located in a “historically underutilized business zone” (HUBZone).
- Wholly owned and controlled by U.S. citizen/s.
- At least 35% of employees must reside within the HUBZone.
Go to https://eweb1.sba.gov/hubzone/ for more information.
State of Arizona IncentivesArizona Job Training Program
This is a job-specific reimbursable grant program that supports the design and delivery of customized training to meet the specific needs of employers, create new jobs and help increase the skill and wage levels of employees in Arizona. This program is funded by Arizona employers who pay into the Job Training Tax equal to 1/10 of 1% on the first $7,000 of an employee’s wages or $7.00 per year, whichever is lower.
Businesses can receive up to 75% reimbursement on costs of training net new employees in jobs that pay at or above $26,190 annually (FTE $12.59 per hour), not including benefits. Award amounts can be up to $8,000 per job with a single employer maximum of $1,300,000.
The “Incumbent Worker” portion of the grant program will allow for training that upgrades the skills of existing employees. The Incumbent Program can reimburse employers up to a maximum of 50% of allowable training costs.
Eligible Costs for Reimbursement:
- Course design and development.
- Instruction costs for job-specific training.
- Training materials and supplies.
- Training facility rental.
- Travel costs (subject to limitations).
Eligible Costs for Match Only:
- Equipment and machinery, pro-rated value used onward training.
- Employer training space, pro-rated.
- Trainee wages, excluding fringe benefits, paid by small or rural business during training.
- Related training that is not job specific, including time, stress, or life management training classes.
- Trainee wages for large employers
- Fringe benefits/signing bonuses
- Cost to complete application
- Recruitment/relocation expenses
- Training of employer officers or partners
- Management fees
- Food and beverage
- Conferences, seminars or tradeshows
- Drug and other testing associated with screening and pre-screening employees.
Once a job training grant is awarded, an employer can take up to two years to complete the approved training program.
The State of Arizona encourages new capital investment by reducing tax liability on most personal property dedicated to commercial, industrial and agricultural uses.
Additional depreciation reduces the personal property’s full cash value for tax purposes by 75% in year one, 59% in year two, 43% in year three, 27% in year four and 11% in year five.
For more information, contact the Arizona Department of Revenue at 602-716-6843 or www.azdor.gov.”
Arizona Quality Jobs Program
Provides Arizona income tax credits for companies creating new jobs and investing in Arizona. The credit is valued at up to $9,000 over a 3-year period per each new employee and offers a 5-year carry forward provision for any unused tax credits.
A qualified job is a new full-time, permanent position that pays at or above the median county wage and pays 65% of the employee’s health insurance costs.
Eligible companies must create a minimum of 5 new jobs and make a minimum capital investment of $1 million.
The Quality Jobs Tax Credit Program is capped at 10,000 jobs being claimed each year by all participants; whereas a taxpayer is limited to a maximum of 400 new jobs per year.
For more information contact email@example.com
Lease Excise Tax
The Government Property Lease Excise Tax (“GPLET”) is a tool to initiate development by replacing real property tax with an excise tax—thereby reducing a project’s operating costs. An excise tax is established for the building type of use and is calculated on the gross square footage of the building. The use of the excise tax cannot continue for more than 25 years and requires that the land and improvements be conveyed to a government entity and leased back for private use. The excise tax rate can be abated for the first eight years if the building property is located within a Central Business District and a Redevelopment Area.
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.
- The electricity or natural gas for businesses that are principally engaged in manufacturing or smelting operations.
For more information contact:
Computer Data Centers
Sales tax exemptions are available at the state, county and local levels on qualifying purchases of computer data center equipment for up to 10 years following certification of the computer data center by the Arizona Commerce Authority. However, if the computer data center qualifies as a Sustainable Redevelopment Project, the exemptions are available for up to 20 years following the year certification is issued.
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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 more information contact: firstname.lastname@example.org
Commercial or Industrial Solar Energy Tax Credit
A business that installs a solar energy device at its Arizona facility qualifies for a tax credit equal to 10% of the installed cost of the solar energy device not to exceed $25,000 for one building in a single tax year and $50,000 total per business per tax year. Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period.
For more information contact:
Research & Development Income Tax Credit
The 2011 through 2022 R&D tax credit is 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 2023 and thereafter, the tax credit rates will be 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 that 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. 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.
Healthy Forest Enterprise Incentives Program (HF)
Incentive program for certified businesses that are primarily engaged in harvesting, initial processing or transporting of qualifying forest products. The program offers the following incentives:
- Use Fuel Tax Reduction – The use fuel tax is reduced from 26 cents to 13 cents a gallon for use class motor vehicles.
- Transaction Privilege Tax Exemption (TPT Exemption) on:
- Purchased qualifying equipment
- Leased or rented qualifying equipment
- Construction contracts
- Use Tax Exemption – on qualifying equipment purchased out-of-state.
- Property Tax Reduction – Both real and personal property can be reclassified from class one (25 percent assessment ratio) to Class six (5 percent assessment ratio) for a period of five years.
- New Job Income Tax Credit – Arizona income tax credit earned over a three-year period for each net new job created, totaling up to $3,000 per employee.
- Workforce Training Income Tax Credit – Arizona income tax credit earned over a three-year period for each new employee trained, totaling up to $9,000 per employee.
Show Low Incentives
A wide variety of local incentives may be available depending on the number and quality of jobs created, amount of capital investment made in the community, and the economic impact of the project on the community. Available incentives may include the following:
- Tax rebates
- Tax abatement
- Infrastructure improvements
- Fast-track permitting
- Job training assistance
- Employee recruitment assistance