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Arizona Form
2022 Credit for Qualified Facilities 349
The business must enter into a managed review with Commerce
CONTACTS FOR QUALIFIED FACILITY TAX
prior to applying for post-approval. The business must obtain
INCENTIVES PROGRAM post-approval from Commerce prior to claiming the credit. The
Arizona Commerce Authority first fifth of the apportioned credit is claimed on the tax return that
Application forms Program guidelines includes the post-approval date.
Website: www.azcommerce.com For example, Company A, is a calendar year filer. Company A
received pre-approval from Commerce for a qualified facility on
Program Manager (602) 845-1200 March 11, 2020, and received its post-approval on March 14,
Arizona Department of Revenue 2022. Because Company A completed everything necessary to
Tax forms and instructions Information and assistance earn the credit in calendar year 2022, the first fifth of the credit
Website: www.azdor.gov must be claimed on the tax return for calendar year 2022.
Taxpayer assistance (602) 255-3381 NOTE: Each fifth of the credit for qualified facilities must be
claimed on a timely filed original income tax return, including
From area codes 520 and 928, toll-free (800) 352-4090 extensions. If you do not claim this credit on a timely filed
General Instructions original return, you cannot claim this credit on an amended
return. Failing to claim this credit on a timely-filed original
Arizona Revised Statutes (A.R.S.) §§ 43-1083.03 and 43-1164.04
return will result in loss of this credit for that taxable year.
provide refundable individual and corporate income tax credits
for expanding or locating a qualified facility in this state. The taxpayer may claim all five annual installments of a credit
that was preapproved before January 1, 2031 by the Arizona
NOTE: Only capital investments in a qualified facility that are Commerce Authority notwithstanding any intervening repeal or
made not more than thirty-six months before submitting an other termination of the credit.
application for preapproval are included in the computation of
The amount of the credit for qualified facilities a taxpayer may
the credit. claim can never exceed the amount indicated on the post-
A “qualified facility” means a facility in this state that devotes at approval from Commerce.
least 80% of the property and payroll at the facility to one or more
NOTE: The business must submit a copy of the Certification of
of the following:
Qualification (Certification) from Commerce with Form 349
• Qualified manufacturing,
when claiming the credit.
• Qualified headquarters,
Co-owners of a business, including partners in a partnership and
• Qualified research.
shareholders of an S Corporation, may each claim only the pro
This credit is effective for taxable years beginning from and after
rata share of the apportioned credit based on ownership interest.
December 31, 2012, through December 31, 2030, and is limited
The total of the apportioned credits allowed to all such owners
to 10% of the lesser of:
may not exceed the amount that would have been allowed for a
• The taxpayer's total capital investment in the qualified sole owner of the business.
facility, or,
The credit is available to an exempt organization that is subject to
• If the total qualifying investment is less than $2,000,000,000,
corporate income tax on unrelated business taxable income
$200,000 for each net new full-time employment position(s)
(UBTI). The credit must result from the activities that generate
with job duties associated with the qualified facility.
UBTI.
• If the total qualifying investment is $2,000,000,000 or more,
$300,000 for each net new full-time employment position Credit Recapture
that has job duties associated with the qualified facility. During the pre-approval process with Commerce, the applicant
The credit is apportioned and claimed in five equal annual must consent to adjustment or recapture of the income tax credit
installments in each of five consecutive taxable years and is in in the case of noncompliance with A.R.S. § 41-1512.
lieu of the credit for New Employment claimed on Form 345, If, within five taxable years after first receiving the credit for
with respect to the same employment positions. qualified facilities, the Certification is rescinded by Commerce,
To claim this credit a business must apply for, and receive pre- the taxpayer is disqualified from the apportioned credits for
approval from the Arizona Commerce Authority (Commerce). subsequent taxable years and may be subject to recapture.
Commerce cannot pre-approve income tax credits for any one On a determination that the taxpayer has committed fraud or
taxpayer in excess of $30 million in any calendar year. relocated outside of this state within five taxable years of first
Commerce cannot pre-approve income tax credits in excess of receiving a credit, all credits previously allowed are subject to
$70 million annually recapture.
Once pre-approval is received, the business must incur at least The recapture of the credit is computed by increasing the amount
$250,000 in qualifying investment within 12 months of pre- of taxes imposed in the year following the year of termination or
approval.
revocation by the full amount of all credits previously allowed.
The tax year of pre-approval determines the "allocation year.”
The allocation year is the calendar year to which the credit was
applied to the annual credit cap.
