As part of efforts to make Arizona more pro-business, Gov. Jan Brewer Friday signed into law legislation that will eliminate the state's sales tax on energy sold to manufactures, according to a press release from the governor's office.
The tax reform aims to help attract manufacturers to the state and make Arizona more competitive globally. During her State of the State address in January, Brewer highlighted these goals and said passing this legislation was one of her priorities.
"In the past five years, we have worked relentlessly to position Arizona as a premier location in which to start or grow a business – and we’ve been successful because we’ve listened to what companies want and need to thrive,” Brewer said in her statement. “Due to several critical reforms – including last year’s measure to simplify our sales tax code – Arizona is now consistently regarded as one of the ten best states in the nation in terms of economic development and competitiveness."
"Until today, Arizona has still been one of the only a few states to impose a sales tax on businesses for energy they use to manufacture products, and that's put us at a disadvantage with other states. Signing SB 1413 affirms our message that Arizona is open for business," she added.
The cost of energy is one of the many factors considered by companies determining a location, the press release said.
The tax cut is expected to cost the state general fund about $17 million per year, according to the release.
The Legislature gave their final approval of the bill earlier this week.
The state House version specifically targeted Apple Inc.'s planned Mesa sapphire glass manufacturing plant by providing a $5 million tax credit it it installs at least $300 million in renewable power capacity to supply its plant, The Associated Press reported.