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BUSINESS CLIMATE
Employee Pool Quality
Arizona Regional Comparisons for Employee Pool Quality
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State
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Science & Engineering Grad Students, % of 18-24 yr olds
(AZ Rank)
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# Of Patents /10,000 Business Establishments
(AZ Rank)
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% With Bachelor’s Degree
(AZ Rank)
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Arizona
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1.29 (2)
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146 (3)
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26.3 (5)
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California
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1.58
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259
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27.9
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Oregon
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1.20
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149
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27.1
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Utah
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1.27
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141
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26.8
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Washington
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1.01
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138
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28.3
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Source: Univ. of Arizona Science & Technology Indicators: 4th Edition; 2001; pp3-4.
Arizona's population is 5,832,150 and its available civilian workforce is 2,671,705 (Arizona Department of Economic Security, 2002 Preliminary Average).
The median age is lower than the national average at 34.2 years (Arizona Department of Economic Security, 2002 Preliminary Average).
Arizona’s total employment is 2,506, 677 and its unemployment rate is 6.2% (Arizona Department of Economic Security, 2002 Preliminary Average).
Competitive Business Costs
Corporate Income Tax Rate: 6.968%
Low workers compensation rates
No inventory tax
Real and Personal Property Effective Rate (state median): 3.14%
Right to Work State (low union activity)
State Sales Tax Rate: 5.6%-9.0% (state median is 8.3%)
(Arizona Department of Revenue; Arizona Tax Research Foundation; League of Arizona Cities and Towns, 2003)
In May 2005, Governor Janet Napolitano signed into law a series of business tax relief measures:
- Angel Investor Tax Credit to assist early-stage companies in attracting the much needed capital to expand operations and bring new ideas, products and services to market. It will allow qualified “angel” investors to secure tax credits of 30% for investments in qualified Arizona tech firms and 35% for biotech and rural companies.
- Sales Factor initiative allowing companies to use a new formula to calculate corporate income taxes, which will ultimately inject more dollars into the state's economy.
- A substantial Business Property Tax Relief through a reduction in the assessment ratio will benefit businesses of all sizes.
Incentives
The Arizona Job Training Program supports the design and delivery of training plans that meet unique industry standards and answer industry challenges. It reimburses up to 75% of training costs for new employees and up to 50% for incumbent employees.
The Enterprise Zone Program’s (EZ) goal is to improve the economies of areas with high poverty or unemployment rates by enhancing opportunities for private investment in certain areas called “enterprise zones.” It offers income or premium tax credits, and property tax reduction.
Foreign Trade Zones (FTZ) allow areas within the state to be designated as legally outside of US Customs territory. Arizona is the only state allowing an 80% reduction in state real property taxes and personal property taxes in FTZs.
Arizona’s Military Reuse Zone Program (MRZ) gives applicants located in designated areas Transaction Privilege Tax Exemption, Arizona income/premium tax credits, real and personal property reclassification.
The Private Activity Bond program can be used for the construction of industrial and manufacturing facilities and the purchase of equipment, residential rental projects, facilities for the furnishing of water, sewage and solid waste facilities and more.
The cost of doing business in Arizona is at parity with the national average (93 Index) and is below that of California (107 Index) (Economy.com).
Arizona’s unit labor costs are 1% below the national average, and total business costs are 3% below the national average (Economy.com).
Overall, Arizona’s comparative business costs savings versus California and the U.S. at large are generated by lower wages, lower tax burdens, and lower infrastructure costs (Economy.com).
Accessibility
Sky Harbor Airport (PHX) is the 5th busiest airport in the nation, with direct flights to every major US metro area and many international destinations.
96 statewide public airports and close to 2,000 miles of railroad tracks.
Over 6,000 miles of highways and roads, including extensive Interstate highway network.
The movement of goods and services throughout western North America and the CANAMEX trade corridor is anchored by Arizona’s strategic geographic position.
Arizona and the northern Mexican state of Sonora share the 2nd longest portion of the US-Mexico border with 5 ports of entry.
Access to top tier telecommunications infrastructure and services; and abundant energy suppliers with a statewide 18,000-megawatt capacity.
For flight times to Phoenix Sky Harbor from the continential US, please click here.
For distances from Phoenix to selected US and foreign cities, please click here.
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