A recent report found that Arizona’s low taxes and business-friendly policies have attracted businesses and residents from across the nation to move to the state.
In the span of one-year, Arizona gained 80,000 new residents and nearly $5 million in adjusted gross income. Only Florida and Texas gained more taxpayers than Arizona during the same period, while California, New York, and Illinois lost nearly 600,000.
The report was based on an analysis done by the National Taxpayers Union Foundation, which looked at statistics from the IRS on tax migration. Arizona was found to have the sixth-lowest tax burden out of any state.
Property taxes were a key factor in Arizona’s residential growth, with a property tax rate lower than most states, including Florida and Texas. New legislative proposals would relieve property tax burdens even more by eliminating the property tax exemption cap, altering the depreciation schedule, and accelerating commercial property assessment reductions.
Arizona’s business-friendly environment was put on display at the Waste Management Phoenix Open last month where Gov. Katie Hobbs and University of Arizona President Robert Robbins were among the guests of the InvisionAZ Summit, a gathering of the state’s emerging venture capital community.
“The rest of the country gets to see why we all want to live in Arizona,” Robbins said.
Hobbs touted Arizona’s business credentials and said to investors that her office would be a “willing partner” that could “open doors and make deals happen.”
Hobbs has expressed concern, however, about proposed legislation that would lower taxes. The governor recently indicated that she would oppose, which would prohibit cities from taxing food for home consumption. Last month, she also vetoed a bill that would have prohibited cities from collecting sales taxes on rent.
Arizona’s ability to attract new residents through competitive policies has also had an international effect. The opening of the new Taiwan Semiconductor Manufacturing Company (TSMC) plant in Phoenix has brought in many workers from Taiwan.
The influx of new Taiwanese residents has supported local businesses.
David Wang, owner of Ashari Bakery in Phoenix, said that he has seen a lot of growth since TSMC began building its factory.
“I catch a lot of Asian customers. They say ‘This flavor is similar to a home taste, the way we make it,’” Wang said.
New residents have also affected the real estate market. Realtor Shelley Sakala said, “since I have a lot of listings here, I know in most cases who’s buying, and we have seen a lot of buyers from Taiwan and southeast Asia.”
By supporting TSMC’s investment in the Phoenix plant, business-friendly policies have contributed to Arizona’s cultural landscape.
“We’ve heard from everyone from hotel partners who want to service TSMC to cultural organizations that want to make sure young people in the community have the type of activities that they expect,” Phoenix mayor Kate Gallego said.