The COVID-19 pandemic has brought a change to the way we live our lives in the 21st-century. The traditional rat race in big cities has been replaced by a work-from-home culture, with employees no longer tied to their office space.
Even before the COVID-19 pandemic, the business sector was looking for new locations as the internet made it easy for companies to be located outside the traditional metro areas. The Grand Canyon State has attracted interest for its aggressive tax breaks, willing employees, and settled weather.
1. Business Taxes
The Governor of Arizona has been working on bringing down taxes since 2015. The state has been performing well in creating a surplus and general fund from its simple tax rate. The Republican Governor, Doug Ducey, was elected on the promise we would limit taxation and increase revenues.
The mass exodus to Arizona has been good for the economy of the state and its tax coffers. The corporate tax rate in Arizona for 2021 is 4.9 percent of taxable income or $50. Small business owners were rewarded with a large tax break following the COVID-19 pandemic that ravaged business sectors.
The corporate tax rate in Arizona compares favorably with states in the west. Several Californian businesses have relocated to Arizona, with many citing the impressive tax rate. California’s corporate tax rate has reached 8.84 percent.
Oregon charges tax on the amount of money earned by its businesses, with a 6.6 percent charge on the first $1 million. Revenue above $1 million is charged at 7.6 percent. The State of Washington is hoping to increase its business tax earnings by introducing a new rate of seven percent on earnings above $250,000.
2. Right to Work State
This is one of the most confusing aspects of workplace law. Arizona is a right-to-work state, adopting the law in 1947. The right-to-work law is designed to provide personal choice for workers about whether they join a union. Workplace unions once created a stranglehold on the labor market. Potential employees were told to join the union at their workplace or not be hired.
Like many other states, Arizona enacted the right-to-work law to hold unions responsible for their actions. Unions have to act in the interests of their members or face workers leaving the group. Unions have positive benefits for members, including negotiating salaries and benefits.
The right-to-work law in Arizona allows workers to decide if the values of their union in the workplace reflect their principles. Monthly union dues are used to back political campaigns and fund lobbyists. If a worker does not agree with the direction of their union, they can choose to opt out without potential repercussions.
3. The Population is Growing
The Covid-19 pandemic had a startling effect on the demographics of the U.S. The drain of talented people from metropolitan areas was driven by work-from-home policies. The shifting attitude to work is having an effect on where companies plan to base their commercial footprint.
Each year, Arizona is adding over 40,000 people to its population. Many of those moving to Arizona are looking for a better standard of living. For companies moving to Arizona from California and other states, the rapidly expanding population is giving them a vast pool of workers to hire.
Students are flocking to Arizona to be trained in business and technology. Maricopa County alone has ten colleges, bringing 200,000 students to the state each year. The expanding population is educated and skilled in different aspects of the industrial sector.
The quality of living is one of the most important aspects of life for workers moving to Arizona. For business leaders, the cost of commercial real estate is lower than in California and other metropolitan areas.
The cost of commercial real estate in California at the end of 2021 had risen to $41 per square foot for Class A office space. In the Bay Area, the cost of commercial real estate had risen higher to more than $59. In contrast, Arizona’s Class A office space costs $30.79.
For workers, the cost of living is affordable compared to the major metropolitan areas of California. Business leaders have identified the desire in their employees to live a happy and successful life away from work. The cost of living has been rated at 30 percent lower in Arizona than in California.
Moving the footprint of a company to Arizona provides workers with the chance to purchase a home at an affordable cost. When you compare the median closing price of a home for sale in San Francisco ($1.4 Million) to the median closing price of a home for sale in Buckeye, AZ ($420,000), you can see how much more purchasing power you have in the state of Arizona.
5. A Well-Connected State
Arizona is one of the best-connected states in the Union. The road and air connections have made the state one of the best for business. Companies can base their logistics in Arizona and take advantage of the Christopher Columbus Transcontinental Highway.
Highway I-10 stretches from Los Angeles to Arizona, and onward to the Atlantic Coast of Florida. 35 million consumers are within reach of companies in the continental U.S. via a single day of driving.
Links to the West Coast are a given because of the location of Arizona in the Southwest. Business leaders moving to the Phoenix area will find easy access to I-17, which links to I-40. The path of I-40 takes trucks carrying goods as far east as North Carolina, where easy links to the Northeast can be obtained. Commuters have been given easy access to locations in the Phoenix area. Loops 101 and 202 take in parts of Glendale, Phoenix, and Mesa. The major employers are located in these areas, offering easy commuter links to the suburbs.
When you think of incentives, you usually think of those provided through tax breaks. The history of Arizona includes business-friendly tax breaks for new and existing companies.
The expanding commercial real estate sector is offering plenty of incentives to companies to secure long-term lease opportunities. Incentives from private companies have been driven by the work-from-home movement created by the COVID-19 pandemic.
Upon first glance, it may seem crazy that a small town in Central Arizona could be such a popular landing place for families. However, looking closer, the community of Buckeye, AZ offers the close proximity to everything a major city has to offer, but in a peaceful environment ideal for raising a family.