Arizona aerospace and defense companies will get a boost if the state senate gets its way.
If Senate Bill 1041 is passed, it would give defense industry companies in Arizona the same tax credits and a property-tax reclassification enjoyed by Intel and others in foreign-trade zones. To qualify for the tax breaks, businesses would have to invest $5 million in a facility and hire 25 employees in metro areas or spend $1 million on a facility and hire 15 workers in rural areas.
The new bill adds to a new jobs package recently passed by Arizona lawmakers, which will not be implemented until 2018. SB1041’s provisions would be enacted soon after passage. Defense contractors in Arizona currently pay the fourth highest property taxes in the nation, said Barry Broome, CEO of the Greater Phoenix Economic Council (GPEC)
“Raytheon, Boeing, Honeywell all are major defense contractors and have been making capital investments in the southern part of the United States because those states provide benefits to them when they do that,” Broome told KTAR. “We don’t provide them any benefits.”
If the bill is passed, only California and New Mexico would lead Arizona as far as the amount of business taxes paid over 10 years by a company that would invest $250 million and create 1,000 jobs. However, the new bill combined with the recently enacted business tax cuts, would put Arizona first, according to the GPEC.
“Tied to the leadership package, Arizona becomes the No. 1 business location in the western half of the United States for capital intensive industries and we can go and get those defense jobs that are important to our future,” Broome said.
