Finance & Incentives
The Office of Economic Development is committed to attracting, growing, and retaining business and industry to the Gilbert community. The Office provides expert site selection services inclusive of:
- Operational cost analysis
- Incentive comparisons
- Workforce studies
- Research and information reflective of state and local tax structures
- Connectivity to key resources
- Project management
Economic Development Reserve Fund
This fund is a discretionary annual closing fund. A portion is available to qualified organizations achieving performance measures that stimulate and promote industries that provide capital investment and high-wage jobs. Contact Jennifer Graves to discuss how to qualify.
From FY13 to FY17, the Gilbert OED executed seven development agreements in support of significant economic development projects using this fund. In most cases, the direct revenue and economic impact estimates are limited to ten years, though the impacts of the projects will be realized far beyond the ten year period of time. In total, Gilbert has committed $41.5 million with an estimated economic impact of $4.8 billion in return. To learn more about these projects, please view pages 35-50 of the Gilbert OED FY17 Annual Report.
Reserve Fund Case Studies
- Certified Sites
- 60-Day Permitting
- Over the Counter Plan Review
- Express Permitting
- Permit by Appointment
- One & Done
- At-Risk Plan Review
Marked by an ever-evolving pro-business climate, Gilbert, Arizona benefits from significant incentive programs on the state and local levels. These programs provide qualifying Gilbert-based businesses with significant reductions in property, sales and income tax liabilities.
Additional Depreciation – Reduces personal property tax liability on class 1 (commercial and industrial) and class 2 (agricultural) property. The schedule is applied to the first five years of the property assessment and accelerates depreciation to 89% of the scheduled value in year five.
Angel Investment Tax Credit – Income tax credit of up to 30% of the investment amount (35% for investment in bioscience) available to those who invest in a qualified small business with no more than $10 million in assets. Capital gains tax eliminated on income derived from investment and a decrease on long-term capital gains.
Arizona Competes Fund – An annual state-wide closing fund of $25 million. A portion is available to qualified organizations achieving performance measures that stimulate and promote industries that provide stable, high-wage jobs.
Business Property Tax Exemption Amount – Calculated so that the exempt amount is raised from approximately $68,000 to $125,000.
Corporate Income Tax – Corporate tax rate reduction from 6.97% phased down to 4.9% beginning in 2014.
Corporate Tax Allocation Sales Factor – Service-based companies with at least 85% of sales outside Arizona to elect tax liability based on the location of the buyer (in-state or out-of-state) when calculating applicable income for corporate taxes. This further enhances legislation passed in 2011 that increases the electable sales factor for multi-state corporations from 80% to 100% between FY2014-2017.
Data Centers – State and municipal retail sales tax exemptions, as well as use tax exemptions for the owner, operator or co-location tenants of computer data centers. Newly constructed data centers in urban areas must make a minimum investment of $50 million ($25 million in rural areas) during a 5-year period. Companies with existing data centers in the state that have brought investment of $250 million over the past six years also qualify for tax benefits.
Foreign Trade Zone (FTZ) – Arizona is the only state that provides businesses in a designated FTZ, or subzone, eligibility for a 75% reduction in state real and personal property taxes. Gilbert has available commercial land within a foreign trade subzone.
Government Property Lease Excise Tax (GPLET) Program – Available to businesses that lease parcels from the community government rather than own them outright; the program waives all real property tax, replacing it with an excise tax at a rate established per square foot and based upon type of use. Every 10 years the rate drops by 20% until it reaches the 51st year, at which point the tax drops to zero.
Job Training Program – A job-specific, reimbursable grant program that supports customized training plans for employers creating new jobs or increasing the skill and wage levels of current employees. An employer creating net new jobs can receive up to a 75% reimbursement of eligible training expenses. An employer seeking to supplement current training programs may receive up to a 50% reimbursement of eligible training expenses.
Property Tax Reform – Reduction of business property tax (class 1) assessment ratios from 20% to 18%.
Qualified Facility Income Tax Credit – $70 million/year refundable tax credit for headquarter, manufacturing and R&D operations of export-oriented companies eligible for a refundable tax credit up to 10% of projected capital investment or $20,000 per net new job.
Quality Jobs – Performance-based tax credit on net new job creation of up to $9,000 per employee over three years. The program allows first year credits to be claimed for 3 subsequent tax years once program requirements are met.
Quality Jobs through Renewable Industries – Businesses making new investment in manufacturing and/or headquarter operations in renewable energy industries are eligible for a refundable corporate income tax credit up to 10% of the capital investment and a 75% reduction in real and personal property taxes.
Research & Development Tax Credit – Companies performing qualified research and development in Arizona may receive an income tax credit equal to 15% to 24%. Legislation enhanced this tax credit by 10% if increased R&D expenditures are made in cooperation with an Arizona university. Companies with less than 150 employees may elect to take a refundable tax credit.
Small Business Capital Investment Tax Credit Program – Designed for those who invest in small businesses, the program allows for an income tax credit of up to 35% of the qualifying small-business investment amount over a period of three years.
Transaction Privilege and Use Tax Exemption – Sales of machinery and equipment used directly in manufacturing operation are exempt from the state transaction privilege and use tax.
For more information about these and other state incentive programs visit: http://www.azcommerce.com/start-up/incentives