Property Tax Reduction
Enterprise Zone (EZ) Program

Benefit Explanation
Property tax reduction is available for qualified manufacturing or commercial printing businesses located in an enterprise zone. A qualified business is eligible for an assessment ratio of 5% (for primary tax purposes only) on all personal and real property in the zone for five years if it is:

• Either minority-owned, woman-owned or small (a small business has less than 100 full-time employees at the location or gross sales of $4 million or less company-wide), and
• Independently owned and operated (not owned more than 50% by another company unless the ultimate ownership is primarily family-owned or closely held), and
• Makes an investment in fixed assets at the zone between $500,000, $1 million or $2 million, depending upon the location of the facility. The investment can be aggregated from 1/1/2001 as long as the zone was in place during that time.

The definition of manufacturing is set forth in the statute:
“Manufacturing means fabricating, producing or manufacturing products, wares or articles for use from raw or prepared materials, imparting to those materials new forms, qualities, properties and combinations. Manufacturing does not include generating electricity at a facility assessed...”

The definition of commercial printing is set forth in the statute:
“Commercial printing means producing printed product through a lithographic or flexographic process, from material cut to press size on the premises, transferred with pressure and finished with a process that may include scoring, folding, die cutting, gluing, stamping, embossing or packaging…”

Property Tax Application Form & Guidelines
There are different forms for businesses seeking initial certification and businesses who have been previously certified.

Property Tax Reporting Deadline: The law requires EZ Property Tax Applications to be filed with the Arizona Department of Commerce on or before October 1st of each year to be eligible for tax reduction in the next valuation year. For applicants already certified, failure to timely report will result in loss of the property tax benefit. For new applicants the benefit will be delayed until the next valuation year. At the end of the five-year tax reduction period the property reverts to the standard assessment ratio.