phoenix businesses

top Venture capital firms in Greater phoenix Firm Name Merit Capital Partners Wasatch Venture Fund McKellar & Co. Grayhawk Venture Partners Valley Entures Peacock Hislop El Dorado Investment Co. Magnet Capital Co. Alerion Capital Group LLC Hercules Finance LLC Funds Under Management $455 M $160 M $100 M $85 M Industries Invested Fundless sponsors/smaller equity funds requiring a financial partner Technology startups, primarily IT and life sciences Software, medical technology & consumer products Healthcare, IT, software development, internet, semiconductor Life sciences, software and microelectronics Manufacturing, services, technology Energy Manufacturing, distribution services Technology Biotechnology, medical devices, internet, technology based companies, real estate development Technology population Growth Greater phoenix strategic investments • $100 million allocated by state legislature to fund Science Foundation Arizona, in support of new medical, scientific and engineering research programs. • $78 million generated by Arizona Technology Enterprises, the technology venture arm of Arizona State University and Northern Arizona University, in licensing revenue for 15 ASU spin-out companies, five of which were acquired by other firms. • Arizona research grants from the National Institutes of Health grew 30% between 2002 and 2005, compared to 21% for the nation. Demonstrating a pro-business operating environment, Greater Phoenix businesses have seen decreases in the average employer and individual tax rates over the last 10 years. Arizona continues to offer competitive operating cost advantages: • No corporate franchise tax • No business inventory tax • No income tax on dividends from out-of-state subsidiaries • No worldwide unitary tax • No sales tax on manufacturing equipment • Aggressive accelerated depreciation schedules • 100% of net operating loss may be carried forward for 5 years financinG, incentiVes and taxes $73.5 M $50 M $35 M $15 M $10 M $3 M the sales factor Arizona’s “Sales Factor” allows multi-state corporations the option to “super-weight” their sales factor to reduce income tax liability in the state. Phased in over three years, the sales factor will rise from 60 percent in 2007 to 70 percent in 2008 and 80 percent in 2009. For more information on Arizona’s Sales Factor, please visit www.gpec.org. Intel Capital $1.9 M Source: The Phoenix Business Journal Book of Lists 2008 small Business lending Greater Phoenix offers a strong partnerships between state agencies and numerous business organizations to promote entrepreneurship among small, minority-, women-owned, and disadvantaged business enterprises. • Ensuring accessible and affordable health insurance for small business. • Creating a common licensing portal that serves as a liaison between businesses and licensing agencies. • Improving the network and supply chain between Arizona businesses. commercial loan financing Major Banks in Greater Phoenix GPEC Members 1st National Bank of Arizona Alliance Bank Bank of America Chase Bank Compass Bank M&I Bank National Bank of Arizona U.S. Bank Wells Fargo Arizona asu technopolis was formed to help give innovative companies the best possible start by educating, coaching and connecting innovators with entrepreneurs. communities of distinction. together Greater phoenix. innovate. accelerate. succeed.. Phoenix w Mesa w Glendale w Scottsdale Chandler w Gilbert w Tempe w Peoria Surprise w Avondale w Goodyear w Apache Junction Buckeye w Maricopa w Fountain Hills w Queen Creek Tolleson w Wickenburg www.gpec.org 602.256.7700 Greater phoenix ranks #1 as the nation’s larGest metro area for Business recruitment and attraction. Revised: August 2008 – expansion manaGement maGazine 2007 state incentive programs Businesses locating to Greater Phoenix may take advantage of aggressive incentive programs that provide significant reductions in property, sales and income taxes. • 26 Enterprise zones in Arizona. • State income tax credits up to $3,000 per qualified new employee. • Property tax reductions of up to 78% for five years. • Cash assistance of up to $8,000 per qualified employee. • Employers awarded income tax credits of up to 75% of expenses. incurred while providing technology skills training. • Income tax credit of 30% of qualifying small business investment amount over 3 years. • Companies locating within reuse zones qualify for property tax reductions of up to 78% for five years. • Firms within zones are eligible for state income tax credits of up to $10,000 for each new employee. • Companies may qualify for exemption from transaction privilege sales tax on certain types of construction. • Income tax credit for qualified research and development done in Arizona, including company funded research at a state university. • Maximum credit of $2,500,000. • If allowable expenses do not exceeed the maximum, credit is 22% of expenses. If allowable expenses do exceed $2,500,000, credit amount is $600,000 plus 13% of amount of expenses over $2,500,000. • Interest on bonds is exempt from federal income tax for most bond holders • A manufacturing company can issues bonds up to $10 million. • Accelerated depreciation schedule for commercial and agricultural personal property. • Reduces the full-cash value over a five-year period. • In five years, the accelerated rate is 94% of the scheduled value. • Arizona one of few states that provide an 78% reduction in state real and personal property taxes for companies within foreign trade zone. • The area is treated as though legally outside of the U.S. Custom’s territory. • All real property tax waived and replaced with an excise tax (established rate per square foot and based upon the type of use). • Rate is reduced every ten years by 20% until it reaches the 51st year, when the tax drops to zero. • Allows for income tax credit up to 35% of qualifying small business investment over 3 years. • Companies installing a solar energy device qualify for a tax credit equal to 10% of the installed cost of the solar energy device. • Tax credits can be used to offset Arizona income tax liability. corporate income tax • Net income is taxed at a rate of 6.9%. • The 80% Sales Factor employs three factors to determine the percentage of income that is subject to taxation in the state of Arizona: • Payroll • Value of real and tangible property • Sales Enterprize Zones Job Training Programs Small Business Programs sales and use taxes • Arizona does not have a traditional sales tax where the tax is imposed on the purchaser of goods. Instead, the tax is levied directly on the seller or vendor for the privilege of engaging in business within Arizona. • Whether the seller includes the tax in the purchase price or absorbs the tax, the seller is responsible for remitting the entire amount of the tax to the state and/or local taxing jurisdiction. • The tax is applied to gross proceeds of sales or gross income derived from a taxable business. • The current state tax rate is 5.6%. Visit www.gpec.org for local sales tax rates. Military Reuse Zones R&D Tax Credit Program property tax • The first $63,242 of commercial and agricultural personal property is exempt from property taxes. • Businesses located in Foreign Trade Zones, Enterprise Zones, and Military Reuse Zones can use an assessment ratio of 5%, rather than the standard 23%. Visit www.gpec.org for Arizona Property Classifications and Assessment Ratios. Private Activity Bonds Accelerated Depreciation individual income tax • Arizona offers an average competitive tax rate of 3.55%, in comparison to other Southwest markets, ranging from 4.6% to 9.3%. • Personal exemptions range from $2,100 - $4,200 depending on taxpayer filing status. Foreign Trade Zones Lease Excise Tax Program Small Business Capital Investment Program Commercial Solar Energy Tax Credit Program arizona employers pay the 6th lowest workers’ compensation premium rates in the nation and the 2nd lowest unemployment insurance tax per employee.