Arizona has recently designated 168 Qualified Opportunity Zones throughout the state. These opportunity zones have been nominated by the governor and the U.S. Territories CEO. Arizona became one of the first states to receive approval of its opportunity zones. There is more than one way to qualify. A census zone must have a poverty rate of 20 percent or greater or a median family income that is no greater than 80 percent of the Arizona median. In the state of Arizona, there was a careful examination of each eligible tract before deciding on the 168 nominations. Here is a look at some of the areas denser in opportunity zones:
18 tracts spread located throughout the cities of Chandler, Mesa and Tempe
There are 42 census tracts that qualified as opportunity zones in this city
There are 21 tracts nominated in Tucson and parts of Pima County
Opportunity Zones were created to draw investors into certain areas through the use of capital gains tax incentives. These incentives are spread out over different periods of time and make it more lucrative for those looking to invest in areas that are considered economically distressed.
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Arizona Tax Situation
The state of Arizona has five personal income tax brackets that range from 2.59 percent to 4.54 percent. The highest percentage is assessed to households with a median annual joint income of $310,317 or more. That equates to $155, 159 or greater for individuals.
Arizona has a state sales tax of 5.65 percent, although local taxes typically add their own tax, which averages out to be 2.65 percent. That combines for an overall sales tax of 8.25 percent, but that is subject to change slightly according to each municipality.
Compared to the rest of the nation, Arizona has a favorable tax situation, which is partly it has continued to grow its population. Property taxes in Arizona rank as the 15thlowest among all 50 states. There is also a personal property tax in Arizona that is added on to residents’ vehicle registration.
There is no estate tax within the state of Arizona and the retirement taxes are considered friendly to state retirees. Sin taxes are also imposed on the sale of cigarettes, cigars, chewing tobacco, beer, wine and liquor.
Industries with Tax Breaks
Tax breaks in the state of Arizona extend to a number of industries and it is no coincidence that several companies located in Phoenix have utilized these incentives. The city of Phoenix is responsible for 76 percent of the economy in Arizona. However, companies all over the state are able to utilize all these tax incentives Arizona has become one of the better states for providing tax breaks to a variety of industries and that includes the following:
Arizona is very liberal with these tax incentives to the aerospace industry and that includes reimbursable grants as well.
The defense sector is given tax cuts that also apply to unique schedules of depreciation.
The tax incentives extend far and wide for solar energy in all types of installations, including commercial, agricultural and much more.
Arizona’s copper mines are responsible for 65 percent of all the copper in the United States and ranks sixth in the most copper produced in the world.
The tax breaks have drawn a number of companies to the state of Arizona, although there are some areas that are still lacking. One area that has been improving is green industries, partly because there are generous tax incentives in this sector.
Arizona State Financial Facts
Arizona continues to be a popular state for retirees, but has also seen an influx of younger people making this their permanent home. There is a wide variety of people moving into Arizona as Phoenix is currently the fifth most populated city in the nation. Below is a glimpse at some key financial facts about Arizona:
- Median household income – $55,712
- Median household savings
- $0 in savings: 43%
- $1,000 or less in savings: 62%
- Total household investments
62 percent of families that own their home
Median value of Arizona home – $246,800
Arizona minimum wage is $10.50 per hou
Arizona Current economic condition
The state of the economy in Arizona is doing very well and its growth in 2018 was the strongest it has been in more than a decade. Only three states have featured a faster-growing economy. Personal incomes have seen a rise that has exceeded 4 percent statewide. Average hourly wages are seeing an increase of almost 8 percent. Predictions have also indicated that more growth is in store and that there is little likelihood of a recession.
Population rates are also on the rise in Arizona, and commercial space is undergoing significant expansion. The union workforce only claims 4 percent in Arizona and it is a right to work state. Foreclosures are less than one percent and the price of homes have increased by 8 percent in the last year. The cost of doing business is above the national average, but that has not sidetracked the overall economic growth of Arizona.
Unemployment numbers are also down as it is expected to average 3.5 percent in 2019. Arizona’s high school attainment stands at 93 percent and that is good for a No.3 ranking among all 50 states.
Primary Industries in Arizona
Industry is booming in Arizona and there are a lot of private sectors that are flourishing. The manufacturing industry includes a variety of sub categories while high technology plays a major part as well. Here is a short list of the leading industries in Arizona which are helping to shape and strengthen the overall economy:
- Renewable Energy
Top Economic Cities in Arizona
Arizona is welcoming more new residents each week and as those numbers are growing, so is the economy. However, some locations are better than others in terms of economic growth. Phoenix is the obvious leader as economic growth is increasing at a record pace, although there are some other bustling cities worth noting. Here is a look at those top economic cities:
- Oro Valley
Arizona has some highly-developed areas, although there are some more remote parts of the state that are in need of an economic turnaround. There are still very high unemployment rates for some smaller towns in Arizona. Yuma is one of the larger cities with a high unemployment rate that has gone over 9 percent. However, those numbers are decreasing and taking advantage of opportunity zones in that area could continue that trend. There are other cities in Arizona experiencing economic distress and they are often overshadowed by the growth and success of the cities that are continuing to flourish. The Opportunity Zone program has the potential to address those areas and help bolster communities that are not too far away from more robust economies that have helped Arizona become more visible and prominent on the national landscape.