Arizona Gov. Jan Brewer signed a bill into law on Friday that eliminates sales tax on energy that is sold to business for manufacturing in an effort to grow the state’s manufacturing sector.
The new law makes manufacturers of all sizes exempt from the state’s transaction privilege tax on energy purchases.
“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. “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 10 best states in the nation in terms of economic development and competitiveness.”
Brewer identified the new law as a “cornerstone” priority in her 2014 State of the State address in January.
“Until today, Arizona has still been one of 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,” Brewer said. “Signing Senate Bill 1413 affirms our message that Arizona is open for business.”
The tax reform measure was implemented to make the state’s technology sector more competitive, as well as manufacturing.