Skip Navigation

The U.S. Department of Energy and the North Carolina Clean Energy Technology Center are excited to announce that a new, modernized DSIRE is under construction. The new version of DSIRE will offer significant improvements over the current version, including expanded data accessibility and an array of new tools for site users. The new DSIRE site will be available in December 2014. Staff are currently working hard on the new version of DSIRE but are also maintaining the content of the current version of DSIRE. Thank you for your continued support and patience during this transition. We hope you are as excited for December as we are!

US Department Energy Efficiency and Renewable Energy
IREC North Carolina Solar Center
Home Glossary Links FAQs Contact About Twitter    Facebook
Arizona

Arizona

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewable Energy Business Tax Incentives   

Last DSIRE Review: 01/08/2013
Program Overview:
State: Arizona
Incentive Type: Industry Recruitment/Support
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps, CHP/Cogeneration, Solar Pool Heating, Anaerobic Digestion, Small Hydroelectric, Fuel Cells using Renewable Fuels
Applicable Sectors: Commercial, Industrial
Amount:Varies
Maximum Incentive:The tax credit is up to 10% of the investment amount. No individual limit on property tax reductions.
The aggregate amount of tax credits that can be approved state-wide is $70 million per taxable year.
Start Date:1/1/2010
Expiration Date:12/31/2019
Web Site: http://www.azcommerce.com/renewable-energy-tax-incentive/
Authority 1:
Date Enacted:
Date Effective:
Expiration Date:
A.R.S. ยง 41-1511
7/10/2009 (subsequently amended)
1/1/2010
12/31/2019
Authority 2:
Program Guidelines
Summary:

SB 1403, signed in July of 2009, created tax incentives intended to draw renewable energy product manufacturers to Arizona. Specifically, income tax credits and property tax incentives are available for companies choosing to establish or expand their manufacturing facilities and corporate headquarters in Arizona. To be eligible the business must meet certain minimum requirements for the quantity and quality of new jobs created. Some of these requirements were amended in May 2010 by Senate Bill 1201. Different incentive levels are available depending on how many full-time jobs are created and the salary for those jobs.

Businesses must first submit an application to the AZ Department of Commerce to be approved as an eligible facility. The law provides for continual review of the business by the Department of Commerce to ensure that the business is still meeting the various requirements. If approved, the business may be eligible for income tax credits or property tax incentives. These incentives will expire on December 31, 2019.

Income Tax Credits:
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. The amount of the tax credit is up to 10% of the taxpayer's total capital investment if:

  • A manufacturing facility creates at least 1.5 full-time employees for each $500,000 of capital invested, or
  • A headquarters creates at least 1 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 1.5 new full-time employee in a manufacturing facility, or
  • $200,000 per 1 new full-time employee in a headquarters

The credits are refundable, but must be claimed in five equal installments over five consecutive taxable years. The annual limit for any single taxpayer is $30 million. Arizona also provides a tax credit for capital investments in manufacturing facilities and other businesses unrelated to renewable energy under A.R.S. §41-1512. The statewide aggregate amount of credits that be approved for both this credit and the credit allowed under A.R.S. §41-1512 is $70 million per taxable year.

Property Tax Incentives:
To be eligible for property tax incentives, the business must invest at least $25 million in facilities, equipment, land and infrastructure. If approved by the Arizona Department of Commerce, the 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, or
  • 15 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%.


 
Contact:
  Tiffany Frechette
Arizona Commerce Authority
333 N. Central Ave.
Suite 1900
Phoenix, AZ 85004
Phone: (602) 845-1200
E-Mail: tiffanyf@azcommerce.com
Web Site: http://www.azsolarstate.com/
NCSU - home
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.