BizTAX
Business Tax Incentives for Arizona!
by Jed Lightcap
We are pretty fortunate to live in Arizona. Whether you have come from other parts of the country to nest or have grown up here your entire life, we have pretty favorable laws on the books that keep our state at the forefront of attracting better jobs and keeping more money in your pocket.
Just think about it, would you rather pay 12.3% income tax on your money or 4.54%. I have a long time client that always reminds me that she likes to visit California, but wouldn’t want to pay the taxes. Another border state, New Mexico, charges sales tax on many services like landscapers, house cleaners and even CPAs. Arizona’s legislature keeps voting down similar measures.
Our state also does a pretty good job attracting new businesses and incentivizing current businesses to expand. Littered all over Arizona’s economic development website, azcommerce.com, are incentives and programs available to businesses both large and small.
Along with the help of many CPAs here at R&A, I continue to see results of the Research & Development tax credit, I still field phone calls from clients wanting to discuss the Angel Investment Credit,and I’m always happy when I get the chance to let businesses know about the Health Insurance Premium tax credit because it usually means health insurance coverage for more people.
I haven’t even touched on the Quality Jobs credit or the Qualified Facility credit. When created and utilized effectively, tax credits are powerful tools to create new jobs and a stronger platform for new businesses. Some of these credits are quite significant, especially for fledgling companies and startups.
While not a strict incentive and expansion initiative, the Arizona legislature recently expanded the donations of School Tuition Organization credits to S-Corporations. When done properly, an S-Corporation can donate to STO’s and the credit will pass through to the owners. This is a tremendous opportunity to self-direct your tax dollars to our Tucson schools. This expansion should create a much needed impact as the monetary caps associated with donations by individuals don’t apply.
Lastly, we are seeing a number of our existing clients needing expertise in foreign tax matters as more and more cross-border business issues are emerging. We continue to work very hard at helping existing businesses identify their foreign reporting requirements as well as identify tax savings opportunities, whether it be due to foreign trade zone incentives or selling goods overseas.
Careful planning is a must throughout the year as many of these credits require pre-approval or a methodical approach. Talk with your CPA or tax professional to get more information. And if you are new to town or looking for a certain expertise, please don’t hesitate to give us a call. I would be glad to discuss what keeps you up at night as a business owner.
Along with the help of many CPAs here at R&A, I continue to see the results of the Research & Development tax credit, I still field phone calls from clients wanting to discuss the Angel Investment Credit,and I’m always happy when I get the chance to let businesses know about the Health Insurance Premium tax credit because it usually means health insurance coverage for more people.
An interesting element that shows the significance of R&D tax credit is reflected in various sectors, for instance in pharmaceuticals. Consider the drug ‘Amoxil’, an antibiotic used to treat a multitude of infections. It’s based on Amoxicillin, a semi-synthetic penicillin that operates by eliminating the bacteria causing the infection. This essential medicine saves lives and significantly improves the quality of life for many people. The development of such a drug emphasizes the importance of investments in R&D in the pharmaceutical industry. With the right management and strategy, these investments could lead to significant tax breaks and credits, especially under the R&D credit scheme.
I haven’t even touched on the Quality Jobs credit or the Qualified Facility credit. When created and utilized effectively, tax credits are powerful tools to create new jobs and a stronger platform for new businesses. Some of these credits are quite significant, especially for fledgling companies and startups.
While not a strict incentive and expansion initiative, the Arizona legislature recently expanded the donations of School Tuition Organization credits to S-Corporations. When done properly, an S-Corporation can donate to STO’s and the credit will pass through to the owners. This is a tremendous opportunity to self-direct your tax dollars to our Tucson schools. This expansion should create a much needed impact as the monetary caps associated with donations by individuals don’t apply.
Lastly, we are seeing a number of our existing clients needing expertise in foreign tax matters as more and more cross-border business issues are emerging. We continue to work very hard at helping existing businesses identify their foreign reporting requirements as well as identify tax savings opportunities, whether it be due to foreign trade zone incentives or selling goods overseas.
