MILITARY REUSE ZONE
Save on property taxes. Reduce State Income Tax Liability! Reduce Construction Sales Tax!
The Arizona legislature established the Military Reuse Zone (MRZ) Program to lessen the impact of military base closures.
The program achieves this goal by providing tax incentives to aviation or aerospace companies, insurers,
and airport authorities located within a MRZ.In 2002, the former U. S. Naval Air Facility in Goodyear, now known as
Phoenix-Goodyear Airport, was designated as an MRZ. Included in the zone are available buildings for lease,
private property for development, and more than 300 acres on the airport for land lease opportunities.
MILITARY REUSE ZONE INCENTIVES
Property Tax Reclassification – Up to 72% in Savings
Aviation or aerospace companies are eligible for both real and personal property reclassification from class one
(18% assessment ratio) to class six (5% assessment ratio), which may result in
property tax savings of up to 72% for a period of five years.
The reclassification runs for five years as long as the company remains in the MRZ, maintains its certification,
submits an annual report to the Arizona Commerce Authority, and annually requests the County Assessor to
reclassify the property. At the end of the reclassification period, the property reverts to the standard assessment ratio.
Any addition or improvement to property qualifies separately for reclassification
under the program for not more than five tax years.
New Job Income and Premium Tax Credits
Arizona income/premium tax credits for up to five years for each net new job created,
totaling up to $7,500 per non-dislocated employee.
If the tax credits exceed the income or premium liability, any unused amount may be carried forward
for up to five taxable years, provided the business remains in the MRZ.
Income/Premium tax credits may be claimed in every year an increase is shown not to exceed
five consecutive years, as long as the company or insurer maintains its certification and
submits an annual report to the Arizona Commerce Authority.
A company that claims enterprise zone or healthy forest tax credits may not claim credit
with respect to the same employee under the MRZ program.
Transaction Privilege Tax (TPT) Exemption
Aviation or aerospace companies and Airport Authorities are offered an exemption from the
TPT on construction contracts performed at an MRZ.
The exemption applies only to state and county taxes; cities impose their own taxes.
A prime contractor must apply for a letter of qualification from the Arizona Department of Revenue prior to
work beginning on the contract to receive the exemption. In addition, the company or airport authority must submit a completion report to the Arizona Commerce Authority to maintain eligibility.
Applications are accepted year round by the Arizona Commerce Authority (ACA), who determines eligibility for program benefits. Only aviation or aerospace businesses/projects located in an MRZ are eligible for incentives.