Healthy Forest

The primary goal of the Healthy Forest Enterprise incentive (A.R.S. § 41-1516) is to promote forest health in Arizona. This is achieved by providing incentives for certified businesses that are primarily engaged in harvesting, processing or transporting of qualifying forest products:

• Use Fuel Tax Reduction (expired 12/31/2024)
  
• Transaction Privilege Tax Exemption(TPT Exemption) on:
  • Purchased qualifying equipment (expires 12/31/2026)
  • Leased or rented qualifying equipment (expires 12/31/2026)
  • Construction contracts (eligible if construction began before 1/1/2024)
  • Equipment repair parts (expires 12/31/2026)
  • Motor vehicle fuel and use fuel (expires 12/31/2026)
• Use Tax Exemption on:
  • Qualifying equipment purchased out-of-state (expires 12/31/2026)
  • Equipment repair parts (expires 12/31/2026)
  • Motor vehicle fuel and use fuel (expires 12/31/2026)
• Property Tax Reduction (expired 12/31/2024)
• Employment Income Tax Credit (expired 12/31/2020)
• Production Income Tax Credits – For taxable years beginning from and after December 31, 2020 through December 31, 2030, a tax credit is allowed for processing qualifying forest products. The credit amount is equal to: $10,000 for the first twenty thousand tons of qualifying forest products the taxpayer processes in a calendar year, and $5,000 for every ten thousand tons thereafter. Note: to be eligible for this credit the taxpayer must apply to the Arizona Department of Revenue between January 2 and January 31st of the year following the calendar year for which the credit is being requested.

Guidelines

Wage Offer by County

For more detailed information about program incentives please read below or direct your questions to the Program Manager.

Eligible applicants include: a harvester, processor or transporter that:

1. Is primarily (more than 50 percent) engaged in the harvesting, processing or transporting of Qualified Forest Products in Arizona (documented by the submission of a Forest Approval Letter),
2. Employs at least one full-time permanent employee, and
3. Enters into a Memorandum of Understanding (MOU) with Commerce.

Pursuant to A.R.S. § 41-1504(C)(1), the Arizona Commerce Authority (ACA) is authorized to begin assessing and collecting fees for processing applications and administering tax incentive programs. 

Please note: each incentive has different requirements. To ensure eligibility for each incentive please read the guidelines.

To become a certified business and receive HF program incentives an eligible business must follow the process below:

• Apply for program incentives by submitting an application via the ACA Electronic Application System 
• Within 60 days of receipt of a complete application, the ACA will notify the business of approval or denial.
• If the business is approved, the business must enter into an MOU with the ACA and a Letter of Certification will be issued to the eligible business.
• The certified business must then submit a copy of the Letter of Certification to the Arizona Department of Revenue (Revenue) for approval before using the certification to obtain program incentives. To obtain approval, Revenue is asking that the business submit a Tax Clearance Application Form with a copy of the Letter of Certification.
• Within 60 days of receipt of the Letter of Certification, Revenue will notify the business of approval or denial.
• If the Letter of Certification is approved, incentives offered under the Healthy Forest Enterprise Incentives Program can be claimed.

Apply electronically for program incentives.

Apply for Program

• On or by March 1st of each year, the business must submit an Annual Report to the ACA to maintain eligibility. Click here to report electronically for program incentives.
• Within 30 days of expiration of the current certification, a business must reapply to maintain eligibility. Click here to apply electronically for program incentives.

To receive updates about the program as they become available, please click here to add your name to the stakeholders list. Please be sure to identify the Healthy Forest Enterprise Incentive Program as the program for which you would like notification.