Arizona is the only state that does not allow local jurisdictions to create tax increment financing (TIF) districts. But — it does have the Rio Nuevo TIF at the state level and the Government Property Lease Excise Tax at the local level that diverts revenues from public coffers. Arizona used to boast no film subsidies but enacted the Arizona Motion Picture Production Program in January 2023. Arizona has had five megadeals, and a total subsidy giveaway of over $1 billion, since 1994. 

Most of Arizona’s state incentive programs are administered by the Arizona Commerce Authority (ACA)—the public-private-partnered economic development agency that succeeded the Arizona Department of Commerce in 2010.  

The ACA issues annual reports on all its incentives, but the amount of information provided varies by program due to confidentiality laws. Some, like the Quality Jobs Tax Credit, have the projected and actual number of new jobs created, while others, like the Computer Data Center Program, have hardly any useful information. What’s worse, the costs of the largest economic development tax expenditure by far—the Research and Development Non-Refundable Tax Credit administered by the Department of Revenue—are not disclosed at all.  

As for aggregate program costs, the Office of Economic Research and Analysis in the Department of Revenue issues tax expenditure reports every year. The General Accounting Office in the Department of Administration publishes the Annual Comprehensive Financial Reports (ACFRs), but they don’t have any cost information for any of the major tax incentive programs except for the Rio Nuevo TIF. Arizona’s municipalities generally report tax abatements in accordance with Statement No. 77, but none of its school districts do.  

Established in 2002, the Joint Legislative Income Tax Credit Review Committee issues annual evaluations of income tax credits on variable cycles (of which the R&D tax credit is one) on variable cycles but the lack of analytical rigor and the powerlessness of the legislative staff analysts stand in the way of policy changes.   

Our database tracking corporate misconduct, Violation Tracker, scours 450 federal, state and local agencies in compiling resolved civil and criminal cases against companies. See the list of state agencies from which we collect information in Arizona.

Last updated November 2023.

For more information, contact Jacob Whiton at [email protected]