Difference between revisions of "Renewable Energy Business Tax Incentives (Arizona)"

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|Incentive/TechDsc=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
 
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Revision as of 01:26, 11 January 2010

Summary

Last modified on January 11, 2010.

Financial Incentive Program

Place Arizona


Name Renewable Energy Business Tax Incentives
Incentive Type Industry Recruitment/Support
Applicable Sector Commercial, Industrial
Active Incentive Yes


Energy Category Renewable Energy Incentive Programs
Amount Varies









Max Limit No individual limit.

The aggregate amount of tax credits that be approved state-wide is 70 million per taxable year.






Website http://www.azcommerce.com/BusAsst/Incentives/renewable_benefit.htm


References DSIRE[1]


Authorities (Please contact the if there are any file problems.)

Authority 1: SB 1403
Date Effective 1/1/2010
Date Enacted 7/10/2009
Expiration Date 12/31/2016
















Incentive Contact

Contact Name Tiffany Frechette
Department Arizona Department of Commerce
Address 1700 West Washington Ave.
Place Phoenix, Arizona
Zip/Postal Code 85007
Phone (602) 771-1154


Email tiffanyf@azcommerce.com
Website http://www.azcommerce.com/Energy/default.asp



SB 1403 did not provide a definition for "renewable energy". The technologies listed above have been regarded as renewable energy in other legislation in Arizona, but might not necessarily be included in the definition for these incentives. The AZ Department of Commerce will be releasing more information about this program in the coming months and will likely establish a list of technologies eligible for these incentives.

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. The bill stipulates different incentive levels 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 be available starting January 1, 2010, and will expire on December 31, 2016.

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 aggregate amount of credits that be approved state-wide 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 ration of 22%.

References

  1. DSIRE Database of State Incentives for Renewables & Efficiency accessed 2009-12-08