SOURCE: Arizona Technology Council
February 14, 2011 12:29 ET
Arizona Technology Council Acts as Key Resource in Defining Components of the Arizona Competitiveness Package
Legislation Viewed as Most Comprehensive Improvement in Arizona's Business Climate Ever Envisioned
PHOENIX, AZ--(Marketwire - February 14, 2011) - As the strongest voice for Arizona's high-technology industry, the Public Policy Committee of the Arizona Technology Council (http://www.aztechcouncil.org) today announced its strong support for the Arizona Competitive Package. The Council has been a key resource to Arizona Governor Jan Brewer, the Arizona State Legislature and the proposed Arizona Commerce Authority in defining the components of the Arizona Competitiveness Package.
With the release of this comprehensive legislative proposal, the Governor, Senate President and House Speaker have outlined what will truly be a great future for the state. The Arizona Competitiveness Package embraces high technology industries as the engine that will drive our state for the next thirty years. Small business entrepreneurs will be rewarded for the jobs they create and the state will be provided with the resources it needs to dedicate to the education of our children.
"This is one of the most important pieces of business climate-related legislation that has ever come our way," said Steven G. Zylstra, president and CEO of the Arizona Technology Council. "We're grateful that the governor and Don Cardon, president & CEO of the proposed Arizona Commerce Authority, have the creativity and courage to work with the business community during this difficult time to do something bold and forward thinking for the state. We believe that its passage will have the effect of healing Arizona's economy, creating the best jobs for Arizonans and attracting new businesses large and small."
A summary of the proposed legislation is below:
Arizona Commerce Authority
Repeals the Department of Commerce and creates the new Arizona Commerce Authority. This will have the effect of eliminating waste in government and creating a private sector entity made up of 17 top CEO's in the state. Arizona's State Speaker and Senate President will be ex officio members.
Corporate Income Tax
Reduces the corporate income tax rate from 6.97% to below 4.9%, between FY 2014 and FY 2017. The reduction is to occur in equal increments over a four-year period.
100% Sales Factor
Increases the electable sales factor for multi-state corporations from 80% to 100% between FY 2014 and FY 2017. The increase is to occur in equal increments over a four-year period. A corporation that conducts business both in-state and out-of-state must apportion its income from business activity based on the ratio of property, payroll, and sales in Arizona compared to the corporation's property, payroll, and sales everywhere.
R&D Tax Credit Enhancement
Increases the credit by 10% if qualified expenditures are made through a public or private Arizona university.
Angel Tax Credit/Capital Gains
Increases the eligibility criteria for the Angel Investment Tax Credit for a qualified small business from $2 million to $10 million in total assets. Eliminates the capital gains tax on income derived from investments in qualified small businesses that have been certified by the Arizona Commerce Authority.
Personal Property Tax Reform
- Accelerated Depreciation -- Accelerates depreciation schedules for prospective acquisitions of commercial personal property initially placed on the tax rolls on or after 2012.
- Personal Property Exemption -- Increases the exemption on personal property from the current $67,000 in Tax Year 2010 to $79,000 in Tax Year 2011 by using the Employment Cost Index (ECI) rather than the Gross Domestic Product Implicit Price Deflator (GDP IPD).
Reduces the commercial property assessment ratio to 18%. Increase in the Homeowners Rebate to offset change in the assessment ratio.
Job Training Program
Reauthorizes the existing job training program, a job-specific reimbursable grant program that provides training plans for employers creating new jobs or increasing the skill and wage levels of current employees.
Quality Job Tax Credit
A tax credit replacing Arizona's expiring Enterprise Zone program with a new Quality Job Income Tax Credit. Each eligible job qualifies for a $3,000/year credit for three years, with a cap of 400 jobs per employer each year. The total program cap is $30 million a year, and $90 million for three years.
Arizona Competes Fund
This has also been labeled the "Deal Closing Fund." To qualify, a company will need to achieve certain performance measures, average employees' wages above the county's average wage, and other requirements similar to the existing Job Training program. The Arizona Competes Fund will generate dollars for investment in business projects that stimulate and promote industries that provide stable, high-wage jobs. The program will be funded through increases in corporate income tax withholding, and capped at $20 million.
Decreasing Capital Gains for Individuals
Proposal for decreasing long term capital gains (investments held longer than a year).
"If passed, this legislation will be especially impactful to the overall business climate in Arizona by improving the state's job climate and stimulating economic recovery," said Steve Phillips, chairman of the Arizona Technology Council and Avnet, Inc. CIO. "We cannot afford to continue to have companies invest and grow elsewhere because our business climate remains uncompetitive. The time is right for reform now."
The Public Policy Committee of the Arizona Technology Council focuses on issues and initiatives that accelerate technology-related public policy, and legislation in Arizona affecting the growth and development of the technology industry. These include technology commercialization and development; workforce development; supply-chain development; and capital formation. The committee, along with Council staff professionals, work with legislators, elected officials and policymakers at all levels of government, to educate them on the value and promise of the technology industry.
For more information on the Arizona Competitiveness Package please contact Arizona Technology Council President and CEO, Steven G. Zylstra, at firstname.lastname@example.org or (602) 343-8324, ext. 101, or Ken Quartermain with Public Policy Partners at email@example.com or (602) 200-6777.
About the Arizona Technology Council
The Arizona Technology Council is a private, not-for-profit trade association founded to connect, represent and support the state's expanding technology industry. To promote economic growth and professional development in Arizona's technology sector, the Council provides members networking opportunities, business support and access to educational forums. The Council strives to distinguish Arizona as a leader in the technology community and offer resources that are exclusive to its members. To become a member or to learn more about the Arizona Technology Council, please visit http://www.aztechcouncil.org. You are also invited to e-mail the president and his staff, Twitter @aztechcouncil, or view the Council's Facebook, LinkedIn, or Plaxo page.