Income or Premium Tax Credits
Enterprise Zone (EZ) Program

Benefit Explanation
Businesses located in an Enterprise Zone that conduct 10% or less retail sales and create net new quality jobs can qualify for the income or premium tax credits. Three types of retail sales are unlimited and may constitute any percentage of the business activity without causing ineligibility: 
      a) Food and beverage for consumption on the premises solely by employees and occasional
            guests of employees at the location
      b) Promotional products displaying the company logo or trademark
      c) Products sold to company employees

Tax credits may total up to $3,000 for each net new quality job over three years for a maximum of 200 employees in any given tax year. A net new quality job is a position that is:
      1) full-time and permanent,
      2) filled at least 90 days during the tax year, and
      3) paid at least the average wage offer by county.
Further, the business must offer to pay at least 50% of the health insurance costs of the employee and the employee cannot have worked for the business in the previous 12 months. In addition, if a business claims a healthy forest or military reuse zone credit it may not claim an EZ tax credit with respect to the same employee(s).

The EZ program encourages continuous employment, therefore, the tax credit is equal to:

If the allowable enterprise zone credit exceeds the income or premium tax liability, any unused amount may be carried forward for up to five taxable years, providing the business remains in the enterprise zone.

35% of the net new employees on whom the business is claiming a credit must live within an enterprise zone in the same county as the business on the date of hire.

Tax Credit Reporting Forms and Guidelines
There are specific forms for the various tax years. Identify which tax year the business is reporting then complete the appropriate form below.

Tax Credit Reporting Deadline: For tax years beginning January 1, 2002 and thereafter, the law requires EZ Tax Credit Reports be reported to the Arizona Department of Commerce by the earlier of either six months after the end of the tax year in which the credits were earned and claimed or before the date the tax return is filed for the tax year in which the credits were earned and claimed. Failure to timely report and certify to Commerce disqualifies the taxpayer from claiming credits as well as carry forward from prior years.

For tax years beginning 01/01/04 thru 6/30/11 Reporting Form A Guidelines/Instructions

For tax years beginning 01/01/02 thru 12/31/03 Reporting Form A Guidelines/Instructions

For tax years beginning 01/01/01 thru 12/31/01 Reporting Form A Guidelines/Instructions

For tax years beginning before 01/01/01 Reporting Form A Guidelines/Instructions

Department of Revenue Helpful Resources
      • Corporate Tax Ruling CTR 02-5
      • Partnership Tax Ruling PTR 02-1
      • Revenue Form 304 & Instructions
      • Revenue Form 304-1 & Instructions
      • Revenue Form 304-2 & Instructions 


Department of Insurance Helpful Resources
      • Forms 
      • Home page and contact info