Tag Archives: research and development

taxes

Taking advantage of Arizona’s R&D tax credit

Research and development (R&D) tax credits are available to companies that bear the financial risk of developing new or improved products or processes. And claiming them can be lucrative, since they offset a company’s tax liability, making more cash available to invest in ongoing projects. Companies that perform qualified R&D and meet certain requirements can claim a 20 percent tax credit at the federal level, and many states offer their own R&D tax credit, usually at a rate of five to 10 percent. But both federal and state levels considered, Arizona takes the cake, offering companies that perform R&D the most generous tax credit rate in the nation at 24 percent. Furthermore, it offers this benefit in the form of a refundable credit to qualifying businesses.

Why refundable matters

In some cases companies may not be able to use the full amount of the credit Arizona awards them. This could be because they’re operating at a loss or because the amount they’re awarded exceeds their Arizona tax liability. With the refundable credit option, qualifying businesses may elect to receive the excess in the form of an immediate cash payment rather than carry it forward to offset a future liability. The refundable opportunity is limited to companies with fewer than 150 full-time-equivalent employees; the nonrefundable credit has no such limit.

Act quickly

While Arizona places no annual cap on nonrefundable R&D credit claims, the total amount of refunded payments allowed each year is limited to $5 million, so timing is critical if your company hopes to claim the refundable credit. Funds are allocated on a first-come, first-served basis until the $5 million is exhausted. For the 2013 tax year, the refundable option was depleted by the end of February. It’s uncertain how quickly this reserve will go for the 2014 tax year.

Eligible refundable credit applicants must obtain pre-approval by submitting an application prior to filing their tax return, and a full R&D credit calculation needs to be submitted with this application. You’ll need to begin an R&D study immediately to allow for its timely completion and submission.

Who can claim the credit?

Both the refundable and nonrefundable Arizona credits are available to individuals, companies, and all types of pass-through entities, such as S corporations. You may be surprised to learn that the tax definition of R&D is quite expansive: A wide range of businesses can qualify for the credit, from companies in the food and beverage, apparel, and agriculture industries to those involved in construction, manufacturing, and energy production. Don’t let the common misconception that R&D tax credits are limited to large high-tech companies keep you from taking advantage of this lucrative opportunity.

Next steps

Whether you’re interested in pursuing the refundable or nonrefundable Arizona credit, consult a team dedicated to understanding the technical requirements of the R&D credit—including Arizona’s particular requirements — to help you navigate the process.

Peter Henderson is manager and Tom Sanger is partner at Moss Adams LLP.

medical.research

Plans advance for Arizona Biomedical Corridor

Plans to establish a biomedical and advanced technology research and development campus in northeast Phoenix advanced this week as KUD International, a subsidiary of one of the world’s largest development, design and construction companies, announced its plans and submitted an application to acquire 225 acres for the project from the Arizona State Land Department.

The proposed campus is the cornerstone of the Arizona Biomedical Corridor, a collaboration between the City of Phoenix, Arizona State University and Mayo Clinic announced in 2012 to expand the state’s bioscience industry by clustering compatible organizations in the corridor, located in northeast Phoenix at 56th Street and Mayo Boulevard, just south of the Loop 101 freeway. The development lies adjacent to the Phoenix campus of Mayo Clinic.

Acquiring the land could take up to a year, KUD officials anticipate. In the meantime, KUD is moving forward on plans for the first building at the more than $1 billion research park, which upon completion could generate thousands of jobs in the region.

Wyatt Decker, Vice President, Mayo Clinic and CEO Mayo Clinic in Arizona, said the project aligns well with Mayo Clinic’s plans in Phoenix and will play an integral part in its vision to continue to provide innovative, patient-centered medical care, supported by robust programs in research and education.

“The Arizona Biomedical Corridor will further strengthen the region’s growth as a national and international destination for healthcare-related research, education and private sector interests,” Decker said. “Our work with the City of Phoenix and ASU led to our relationship with KUD, a firm we believe will successfully complement and support our vision.”

Arizona State University President Michael Crow agreed, saying, “The development of the area adjacent to the Mayo Clinic Hospital, with its focus on biomedical and advanced technology research and manufacturing, is well aligned with ASU’s partnership with Mayo Clinic to create new health education and research facilities. We are encouraged that KUD shares our collective vision.”

KUD International LLC specializes in developing public-private projects around the world. It has extensive experience with large-scale developments that are founded on research and education and supported with a complementary mix of uses. The company is constructing a research park in Israel in conjunction with Ben-Gurion University that is similar to the one proposed in northeast Phoenix.

KUD International President and CEO Marvin Suomi said the collaboration with Mayo Clinic presented KUD with a sound basis to make a significant investment in establishing a major biomedical research and healthcare complex in north Phoenix. “We consider this a mission-driven project in alliance with Mayo Clinic, and procuring the land is the first step in realizing its vision set long ago,” Suomi said.

Arizona Governor Jan Brewer added, “I’m pleased the Arizona Land Department has accepted and advanced an application for this proposal, paving the way for the development of a premier medical and research facility in north Phoenix. Not only will this project create thousands of high-quality jobs, it will strengthen and secure our position as a global leader in providing world-class medical care. With the involvement of partners like the Mayo Clinic and Arizona State University, I know this project will be a point of pride for the entire state.”

Others involved with the project identify KUD’s relationship with Mayo Clinic, its expertise and its initiative in acquiring the state land as important factors that will help the Arizona Biomedical Corridor become a reality.

“I think this is another example of Arizona’s economic recovery and an indication of the growing strength of the Arizona real estate market,” said Arizona State Land Commissioner Vanessa Hickman. “This is a big win for State Trust Land beneficiaries and the result of careful negotiations between the Arizona State Land Department and the other collaborators.”

Phoenix Mayor Greg Stanton said, “In January 2012, I announced a vision to grow more high-wage jobs in Phoenix by creating a second bioscience campus on a 1,000-acre corridor in Desert Ridge in Northeast Phoenix. Because we already have great partners like Mayo Clinic and Arizona State University, KUD’s investment plans are the key private interest we need to unlock the potential at this location for education and research and create a greater magnet to attract high-wage jobs to Phoenix.”

District 2 Councilman Jim Waring adds, “In February 2013, the City Council adopted a formal strategy to focus on high-wage, bioscience and technology uses within this corridor. I am very pleased to see that the private sector agrees and validates the City’s concept. The City of Phoenix will be a great partner in the project, focused on helping KUD start their development projects as quickly as possible.  Our business community tells us time and again that five-day site plan reviews and one-day construction permitting provides great value and we look forward to delivering this same great service to KUD.”

BIG Green Expo & Conference 2011

Speaker: Lori Singleton ~ BIG Green Expo & Conference 2011

Lori Singleton, Salt River Project (SRP)

Lori Singleton, SRP

Lori Singleton is the manager of sustainability initiatives and technologies at Salt River Project. She is a 29-year employee of SRP and 40-year resident of Arizona. She is responsible for design and implementation of SRP’s environmental outreach programs with special focus on renewable energy.

Lori’s responsibilities at SRP include development and implementation of renewable energy projects to meet SRP’s sustainable resource goals. Singleton oversees research and development projects to support company-wide initiatives for SRP including gasoline lawn mower recycling, tree planting, clean school bus initiative, travel reduction and other internal environmental programs.

She works on development and implementation of the “green” energy pricing program, solar incentive program for residential and commercial customers and renewable energy education programs for implementation in middle school and high school curricula.

In addition, she does promotion and public relations for all new renewable energy projects and purchases (solar, wind, geothermal, landfill gas, low head hydro, fuel cells) while serving as the environmental issues media spokesperson for SRP and being a constant representative of SRP on numerous environmental committees, boards and commissions.

She was appointed by Governor Janet Napolitano to serve on the Solar Energy Advisory Council and also has several other current affiliations including: Valley Forward Association, Board of Directors; Audubon Society, chair, Board of Directors; Maricopa County Regional Travel Reduction Task Force, chair; Association for Commuter Transportation, Valley of the Sun, President & National Board Director; Southwest Center for Education; and the Natural Environment (ASU), Board of Directors.

Current Affiliations

Solar Energy Advisory Council, appointment by Governor Janet Napolitano
Valley Forward Association, Board of Directors
Audubon Society, Chair, Board of Directors
Maricopa County Regional Travel Reduction Task Force, Chair
Association for Commuter Transportation, Valley of the Sun, President &
National Board Director
Southwest Center for Education and the Natural Environment (ASU), Board of
Directors

Affiliations (Past)

Valley Forward Association, Chair, Board of Directors
Maricopa County Regional Travel Reduction Task Force
City of Phoenix, Environmental Quality Commission
Valley Metro, Clean Air Advisory Committee
Tempe Chamber of Commerce, Environmental Committee
Valley of the Sun United Way Loaned Executive


Topic: How people & organizations can get involved in the green movement from an energy perspective.

Conference Speaker
Friday, April 15, 2011
1:45 p.m. – 2:45 p.m.
Room 157

BIG Green Conference 2011


 

BIG Green Expo
Friday & Saturday
April 15th & 16th 2011
9 a.m. – 4 p.m.