Qualified Facility

The Qualified Facility tax credit ( § 41-1512 was established by the Arizona Legislature in to promote the location and expansion of headquarters facilities or manufacturing facilities, including manufacturing-related research & development. The goal of the program is to encourage business investment that will produce high-quality employment opportunities for the citizens of Arizona and enhance Arizona’s position as a center for corporate headquarters, commercial research, and manufacturing. The Program accomplishes this goal by providing a refundable tax credit to taxpayers who are expanding or locating a Qualified Facility in Arizona. The Arizona Commerce Authority (ACA) may authorize up to $125 million per calendar year in tax credits to qualified companies through December 2030. The tax credits will be authorized on a first-come, first-served basis, according to a priority placement number assigned by the ACA at the time of Pre-Approval. Download the TAX CREDIT ALLOCATION TABLE  to view the amount of tax credits available this year. Subject to eligibility requirements, the Qualified Facility tax credit offers a refundable income tax credit equal to the  lesser  of: 10% of the qualifying capital investment or $20,000 per net new job at the facility if the total qualifying investment is less than $2,000,000,000, or $30,000 per net new full-time employment position associated with the facility if the total qualifying investment is more than $2,000,000,000, or $30,000,000 per taxpayer per year. BASIC ELIGIBILITY REQUIREMENTS A company may be eligible for tax credits if it: Makes a Capital Investment of at least $250,000 to establish or expand a Qualified Facility that devotes at least 80% of the property  and payroll to qualified manufacturing, manufacturing-related research & development, or headquarters functions. Creates net new full-time employment positions for the project, of which at least 51% are paid at least 125% of the state’s annual median production wage if located in an urban area or 100% of the state’s annual median production wage if located in a rural area. Has at least 65% of the project’s sales/revenues from outside of Arizona. Offers to pay at least 65% of the health insurance premiums for all net new full-time employment positions. APPLICATION PROCESS (PRE-APPROVAL) To receive Pre-Approval for tax credits, eligible applicants must follow the process below: Prior to submittal of an application to the ACA, a company must request a letter of good standing from the Arizona Department of Revenue (Revenue) by submitting form   Tax Clearance Application   to Revenue. Apply for tax credits by completing a Request for Pre-Approval and submitting it to the ACA. Click here to apply electronically for program incentives . Upon receipt of Request for Pre-Approval the ACA will assign a priority placement number for receipt of tax credits. Within 30 days of receipt of a complete Request for Pre-Approval, ACA will notify the company of Pre-Approval or denial. If a company is eligible, ACA will issue Pre-Approval to the company and transmit a copy to Revenue. Note: Pre-Approval does not guarantee receipt of tax credits under this program because it is issued before the ACA determines final eligibility. The final determination of eligibility will be made after a company applies for Post-Approval. AFTER THE FACILITY IS OPERATIONAL (POST-APPROVAL)