In 2011 Tucson was ranked the #2 Medium Metro on the list of “Best Performing Metros” by the research firm Headlight, LLC. The ranking was based on an analysis of employment trends to identify the US metro areas that experienced the highest job growth rates. TREO is committed to assisting in the continued growth of the region and understands the need for businesses to operate within a profitable, pro-business environment.
Businesses locating to Arizona can take advantage of incentive programs. TREO's staff is available to assist businesses in determining incentive eligibility and to answer any questions regarding specifics. For other, specific business issues or concerns, a list of available resources in the local community can be found here.
Incentive programs include the Empowerment Zone, Arizona Job Training Grants, and Foreign Trade Zone. Arizona’s new Renewable Energy Tax Incentive Program provides $350 million in incentives to attract the expansion of renewable-energy firms to expand their operations in the state. Learn more about it here.
Income or Premium Tax Credits
Empowerment Zone:
Those tax credit incentives are designed as a mixture of tax financing and workforce training incentives with a  goal of revitalizing the inner city. Further information found at our Empowerment Zone page.
Property Tax Reclassification
Foreign Trade Zone:
Designed to stimulate international trade, create jobs and promote investment in the United States, companies conducting business within an activated zone or sub-zone may bring foreign and domestic product into the activated zone at lower costs. Further information can be found at our Foreign Trade Zone page.
Government Property Lease Excise Tax (GPLET):
A GPLET agreement option is available for negotiation with local governmental agencies. GPLET removes the business’s obligation to pay property taxes and instead negotiates an excise tax and a lease rate. Further information can be found at our GPLET page.
Reduced Commercial Property Assessment Ratio (State):
A business can capitalize on Arizona’s reduced commercial property assessment ratio (18% by 2017) as part of Arizona’s Competitiveness Package (HB2001).
Workforce Development and Assistance Training
Quality Job Tax Credit:
This program provides Arizona income tax credits for companies creating new jobs and investing in AZ. The credit is valued at up to $9,000 over a 3-year period for each new employee and offers a 4-year carry forward provision for any unused tax credits. Eligibility qualifications for Tucson are: minimum of 25 new qualified jobs and a minimum of $5 million capital investment. A qualified job is a net, new full time and permanent position that pays 100% of median county wage and with the company offering to pay 65% of health insurance costs of the employee.
Arizona Job Training Program:
This is a job-specific reimbursable grant program that supports the design and delivery of customized training plans for employers creating new jobs or increasing the skill and wage levels of current employees. TREO staff directly assists businesses through the writing, application, and reporting aspects of these grants. Further information can be found at our Arizona Job Training Program page.
Pima County One-Stop Career Center:
The Pima County One-Stop Career Center is nationally recognized for pioneering training initiatives and aggressive fund development that has resulted in a rich menu of services for local employers. In addition to approximately $5 million in formula Workforce Investment Act funds, the One-Stop administers $20 million in discretionary grants for Veterans, youth and other special populations, education funds and basic assistance programs. Complete information is at the Pima County One Stop page.
Primary Jobs Incentives:
The Primary Jobs Incentive Program retains and attracts companies in industries where Tucson enjoys a competitive advantage: Aerospace & Defense, Bioscience, Solar and Transportation & Logistics.
Eligibility qualifications for Tucson are: Minimum of 25 new primary, non- retail jobs at required salary rate, $5 million investment in facilities and company funds, and payment of 75% of employee health costs. Electrical, plumbing, mechanical, grading permit and site review permit fees are waived. Up to 100% construction sales tax allocated to job training, off site, public infrastructure improvements and/or impact fee offsets.
Taxes, Tariffs and Fee Deferral
Foreign Trade Zone:
Designed to stimulate international trade, create jobs and promote investment in the United States, companies conducting business within an activated zone or sub-zone may bring foreign and domestic product into the activated zone at lower costs. Further information can be found at our Foreign Trade Zone page.
Reduction of Corporate Income Tax Rate (State):
A business can benefit from a 30% reduction in Arizona’s corporate income tax rate. The corporate income tax rate from 6.97% is reduced to below 4.9% between 2014 and 2017. The reduction is to occur in equal increments over a four-year period.
Increase In Personal Property Exemptions (State):
A business can improve its bottom line by a 15% increase in personal property exemptions. The Personal Property Exemption increases the exemption on personal property from the current $67,000 in 2010 to $79,000 in year 2011.
AZ Competes Fund (State):
Arizona has taken a progressive position by offering attraction funds to companies. Utilization of the AZ Competes Fund will generate investment in business projects that stimulate and promote industries providing high-wage and stable jobs. To assure a return on investment to the state, performance safeguards are a requirement of these funds.
Arizona R&D Tax Credit (State):
Refundable income tax credits are available for investments in research and development activities conducted in Arizona. The tax credit starts at 22% of the qualified R&D expenses for amounts in excess of expenditures from the previous year. Recent legislation enhances the tax credit amount up to 34% if increased R&D expenditures are made in conjunction with an Arizona public university.
Impact Fee Deferral (City of Tucson):
Impact fees for roads, parks, and public facilities may be deferred until the certificate of occupancy is received in exchange for a negotiated contribution to the City’s Housing Trust Fund.
Real Estate and Facility Assistance
TREO Shovel Ready and City of Tucson Fast Track Permitting Assistance:
Developed in response to the demand for accelerated timelines for both relocation and expansion construction needs, TREO created the “Shovel Ready” program in conjunction with local developers and government entities. Further information can be found at our Shovel Ready program page.
Broker Community Integration and Research Assistance (TREO):
TREO will connect you with the local broker community to assist with relocation efforts.
Downtown Infill and Redevelopment Incentives (City of Tucson):
These incentives allow businesses to build with more flexibility than in suburban areas. These incentives create pedestrian and transit-oriented streetscapes that benefit both businesses and residents. Contact TREO for program specifics.
Facility Start-Up Assistance
AZ Deal Closing Fund (State):
Tap into Arizona's $25 million deal closing fund. It is to be utilized in highly competitive situations and only for projects with a substantial economic and fiscal impact to a State and community. Funds provided to projects must be performance-based and result in a net benefit to the State consistent with the statutory gift clause. An economic impact analysis by an independent third party will be conducted on all projects to determine potential return on investment benefits to the State. All funds will be awarded with contractual provisions for performance and “claw-back” of funds for non-performing projects.
Preliminary Project Review and Delta Team Process (TREO):
TREO is available to conduct customized research and analysis to fit your needs. TREO has comprehensive demographics and statistics about Tucson and the Southern Arizona region including population trends and projections, employment growth rates, demographic snapshots, cost of living, workforce analysis, profiles and more. TREO's staff is available to assist businesses in determining program eligibility and to answer any questions regarding program specifics. The staff is also available to go out and meet with businesses, listen to their specific issues, and then provide a list of available resources that are available for further assistance.
Employee Relocation Assistance
Soft Landing Program (TREO):
TREO is committed to provide valuable information to you and your team during the stressful time of relocation. We understand the importance of a local contact with information about school systems, desirable areas to live and other Tucson specific aspects that are important to you and your employees.
Environmental and Alternative Energy
Solar Incentives:
A list of available incentives related to solar industry programs can be found on TREO's dedicated Solar Incentives page.
Environmental Site Assessment Grants (City of Tucson):
The City of Tucson, Pima County and South Tucson have created districts wherein grant monies will be available for Phase I and II Environmental Site Assessments (ESA). Those properties located within the zones that have not conducted their Phase I and II ESA can apply for and receive grants to complete those studies which could cost in the range of $1800 to $3500 for Phase I and upwards of $20,000 for Phase II. (Note: An Asbestos Survey and Lead-Based Paint Survey can be conducted in conjunction with the Phase I ESA.)
Attraction/Expansion Financing
City of Tucson and Pima County Industrial Development Authority:
The Authority is empowered to issue its bonds to provide funds for the financing or refinancing of the costs of acquisitions, construction, improvement, rehabilitation or equipping of a project.
Angel Tax Credit/ Capital Gains:
It increases the eligibility criteria for the angel Investment Tax Credit for a small business from $2 million to $10 million in total assets and eliminates the capital gains tax on income derived from investments in qualified small businesses that have been certified by the Arizona Commerce Authority.
Regional Initiatives
A summary of state and regional incentives and development initiatives can be found here.
The State of Arizona does not levy the following taxes:
- No corporate franchise tax
- No business inventory tax
- No income tax on dividends from out-of-state subsidiaries
- No worldwide unitary tax
- No sales tax on manufacturing equipment
- Aggressive accelerated depreciation schedules
- 100% of net operating loss may be carried forward for 5 years
Learn more about Business Development Resources:
Contact TREO
For more information about doing business in the Tucson region, contact our Business Development team at 520-243-1900 or 866-600-0331, or by clicking here.
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