Signed by Governor Jan Brewer

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that establishes tax credits for certain businesses.

Highlights:

• Establishes an income tax credit for a taxpayer who makes a qualifying “capital investment” in a “qualified facility” made on or after July 1, 2012 if the following applies, effective for taxable years beginning December 31, 2012 through December 31, 2019 (Secs. 1, 3, 12 & 22):
• 51 percent or more of the net new full-time employment positions pay a wage that is at least 125 percent of the median annual wage in the state; and
• 80 percent of the premium or membership costs of health insurance coverage for all new full-time employees are paid by the tax payer requesting the tax credit.

• Defines “capital investment” as an investment in the acquisition, lease, or improvement of property for the purpose of operating a business, which includes land, buildings, machinery, equipment, and fixtures (Sec. 3).

• Defines a “qualifying investment” as an investment in land, buildings, machinery, equipment, and fixtures for expansion of an existing qualified facility or establishment of a new qualified facility after June 30, 2012, but does not include relocating an existing facility to another location without additional capital investment of at least $250,000, effective for taxable years beginning after December 31, 2011 (Sec. 3).

• Defines “qualified facility” as a facility that devotes at least 80 percent of the property and payroll to manufacturing, headquarters, or research (Sec. 3).

• Authorizes the income tax credit for investing in a qualified facility to be 10 percent of the lesser of the following (Sec. 12):
• The taxpayer's total capital investment; or
• $200,000 for each net new full-time employment positions.

• Prohibits income tax credits from being claimed unless both the capital investment and the new qualified employment position requirements are fulfilled within 12 months after the start of the capital investment (Sec. 1).

• Limits the income tax credit the Arizona Commerce Authority can pre-approve for investments in qualifying renewable energy operations to the following amounts (Sec. 2):
• $70 million in 1 calendar year; or
• $30 million for any 1 taxpayer in 1 calendar year.

• Limits the tax credit amount to the post-approval amount determined by the Arizona Commerce Authority (Sec. 12).

• Requires the tax credit to be given to the taxpayer in 5 equal, annual installments in 5 consecutive taxable years (Sec. 12).

• Authorizes taxpayers to subtract from their gross income the following amounts of net long-term capital gain from an asset acquired after December 31, 2011 to calculate their adjusted gross income (Sec. 9):
• 10 percent between December 31, 2012 and December 31, 2013;
• 20 percent between December 31, 2013 and December 31, 2014; and
• 25 percent between December 31, 2014 and December 31, 2015.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes tax credits for certain businesses.

Highlights:

• Establishes an income tax credit for a taxpayer who makes a qualifying “capital investment” in a “qualified facility” made on or after July 1, 2012 if the following applies, effective for taxable years beginning December 31, 2012 through December 31, 2019 (Secs. 1, 3, 12 & 22):
• 51 percent or more of the net new full-time employment positions pay a wage that is at least 125 percent of the median annual wage in the state; and
• 80 percent of the premium or membership costs of health insurance coverage for all new full-time employees are paid by the tax payer requesting the tax credit.

• Defines “capital investment” as an investment in the acquisition, lease, or improvement of property for the purpose of operating a business, which includes land, buildings, machinery, equipment, and fixtures (Sec. 3).

• Defines a “qualifying investment” as an investment in land, buildings, machinery, equipment, and fixtures for expansion of an existing qualified facility or establishment of a new qualified facility after June 30, 2012, but does not include relocating an existing facility to another location without additional capital investment of at least $250,000, effective for taxable years beginning after December 31, 2011 (Sec. 3).

• Defines “qualified facility” as a facility that devotes at least 80 percent of the property and payroll to manufacturing, headquarters, or research (Sec. 3).

• Authorizes the income tax credit for investing in a qualified facility to be 10 percent of the lesser of the following (Sec. 12):
• The taxpayer's total capital investment; or
• $200,000 for each net new full-time employment positions.

• Prohibits income tax credits from being claimed unless both the capital investment and the new qualified employment position requirements are fulfilled within 12 months after the start of the capital investment (Sec. 1).

• Limits the income tax credit the Arizona Commerce Authority can pre-approve for investments in qualifying renewable energy operations to the following amounts (Sec. 2):
• $70 million in 1 calendar year; or
• $30 million for any 1 taxpayer in 1 calendar year.

• Limits the tax credit amount to the post-approval amount determined by the Arizona Commerce Authority (Sec. 12).

• Requires the tax credit to be given to the taxpayer in 5 equal, annual installments in 5 consecutive taxable years (Sec. 12).

• Authorizes taxpayers to subtract from their gross income the following amounts of net long-term capital gain from an asset acquired after December 31, 2011 to calculate their adjusted gross income (Sec. 9):
• 10 percent between December 31, 2012 and December 31, 2013;
• 20 percent between December 31, 2013 and December 31, 2014; and
• 25 percent between December 31, 2014 and December 31, 2015.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes tax deductions for certain businesses.

Highlights:

• Establishes a tax credit for businesses that incur “additional regulation” after December 31, 2013 (Secs. 1, 8 & 9).

• Defines “additional regulation” as any legislation that (Sec. 1):
• Does not involve health or safety regulations;
• Does not involve criminal or civil fraud regulations; or
• Requires businesses to take actions that cause more economic costs than benefits.

• Prohibits a business from pursuing judicial action against a specific regulation if the business files a claim for a regulatory tax credit for the same regulation (Sec. 1).

• Limits tax deductions to 1 request for a single regulation (Sec. 1).

• Requires the tax deduction to be at least $200 plus the lesser of (Sec. 1):
• The total amount of expenses that occurred as a direct result of additional regulation during that tax year; or
• $2,000.

• Appropriates funds for the tax credit from the country, city, or town that enacted the additional regulations (Secs. 3, 8 & 9).

• Expands Arizona Job Training by authorizing “qualified employers” to suggest curriculum to community college districts until December 31, 2016 (Secs. 2 & 10).

• Defines a “qualified employer” as a business that offers qualified new employment which includes positions that meet all of the following criteria (Sec. 2):
• The positions are new or additions that result from the opening of a new business, expansion of an existing business, or relocation of an existing business to another state;
• The positions require specific job skills; and
• The positions have compensations equal to or more than 125 percent of the median wage of the county where the qualified new employment is located.

• Reduces the capital gains tax appropriated in the state income tax as follows (Sec. 5):
  
  • Between December 31, 2012 and December 31, 2013:
  • 25 percent of the amount reported in federal adjusted gross income is exempted;
  • Between December 31, 2013 and December 31, 2014:
  • 50 percent of the amount reported in federal adjusted gross income is exempted;
  • Between December 31, 2014 and December 31, 2015:
  • 75 percent of the amount reported in federal adjusted gross income is exempted; and
  • After 2015:
  • 100 percent of the amount reported in federal adjusted gross income is exempted.

Full Bill Text