“Learn from yesterday, live for today, hope for tomorrow.”
But there could also be a push for new equipment and machinery tax cuts that could also benefit Apple, Intel Corp. and other companies who are in special tax zones where they already pay a reduced 5 percent rate on their real estate.
The equipment and machinery tax proposal could entail allowing businesses paying the lower real estate property taxes to also accelerate their depreciation write-offs. That could help equipment-intensive industries and the likes of Apple.
However, that proposal could run into some opposition from small-business advocates worried about state tax cuts being geared too much toward big companies.
Most businesses in the state pay a 19.5 percent real estate property tax rate, designated as Class 1 in the state tax code.
Businesses in special economic zones — such as Intel in Chandler — pay a lower Class 6 rate of 5 percent, but they do not get the same accelerated depreciation write-offs as the Class 1 companies. That could change this year at the Legislature.
Apple is already being lined up for a 5 percent real estate property tax rate via a planned Foreign Trade Zone designation at its Mesa factory.
Intel, Honeywell Aerospace and Conair Corp. are also in FTZs, which are created by state and federal economic agencies.
National Federation of Independent Business Arizona Director Farrell Quinlan said his group will wait to see what kind of tax packages are proposed this session at the Legislature before deciding whether to support them.
“But we do advise that no one harbor any illusions,” he explained. “Extending to Class 6 multinational corporations the same accelerated depreciation schedule imposed on Class 1 small business owners who pay their property tax at nearly four times the Class 6 ratio will further shift the tax burden to homeowners and Arizona’s principle engine of job creation — our Main Street small businesses.”
Brewer proposed earlier this week eliminating state sales taxes that manufacturers pay for energy at their plants. She said a number of other states do not have such taxes and a repeal would help Arizona grab more high-tech and manufacturing jobs.
Other business groups like the idea of helping the likes of Apple and other manufacturers with the both the energy and machinery depreciation changes.
“Our Arizona Manufacturers Council is very enthusiastic about the governor’s attempts to make our manufacturing sector in Arizona more competitive,” said Arizona Chamber of Commerce & Industry Vice President Garrick Taylor. “Accelerating the depreciation on business machinery and equipment stands to spark investment in this sector.”
The price tags of the possible tax changes have not yet been disclosed.
But some advocates — including the Phoenix-based Children’s Action Alliance — want the Legislature to weight tax breaks for businesses including Apple — which has $501 billion market cap and a $37 billion annual profit in its most recent fiscal year — against other needs, including the state’s troubled and much maligned child welfare agency.
The Legislature does not need to approve the reduced 5 percent real property tax rate for Apple, but changes to energy, manufacturing and equipment taxation need to go through the state assembly. The changes could help a number of other manufacturers, including in the semiconductor and aerospace industries.
Apple is already getting a $10 million incentive from a business recruitment fund administered by Brewer and the Arizona Commerce Authority.
Apple is partnering with New Hampshire-based GT Advanced Technologies and Salt River Project at the Mesa plant at the former GM Proving Ground. Apple is looking to hire engineers and other workers at the Mesa plant.
An Apple representative did not respond to a request for comment. The Cupertino, Calif-based technology giant often demands tax cuts from states where it is locating operations. That has occurred in Nevada and Texas, and now is being teed up in Arizona.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial Investment Real Estate Broker in Arizona now for 20 years and I worked with banks and their commercial REO properties for 3 years. I am also a commercial landspecialist in Phoenix and a Landspecialist in Arizona.
WHETHER YOU LEASE OR OWN
NOW IS THE TIME FOR YOU TO EXPAND, UPGRADE OR INVEST.
we are at on the a rise of the cycle in Commercial Real Estate. so there is only one way and it’s called we are going up and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
WAITING TO SELL YOUR LAND ? TIMES CHANGE / IT’S TIME
We barely could give land away the last few years, but times are changing. Even in those meager years, I sold more land across the state than most other brokers. Before the real estate crash I was a land specialist in Arizona with millions of dollars of transactions, but then I had to change and also sell other commercial investment properties, which was fun, but I am a Commercial Landspecialist in Arizonal, a Commercial Land Specialist in Phoenix and love to sell land, one acre to thousands of acres.
If you have any questions about Commercial Investment Properties in Phoenix or Commercial Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion in Commercial Properties in Phoenix or Commercial Properties in Arizona with you.Obviously I am also in this to make money, but it could be a win-win situation for all of us.
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Walter Unger CCIM
Associate Broker, West USA Commercial Real Estate Advisers
7077 E. Marilyn Road, Bldg 4, Suite 130
Scottsdale, AZ 85254
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