Sec 20-224.04. Premium tax credit for increased employment in military reuse zones; definitions

A. A tax credit is allowed against the premium tax liability incurred by an insurer pursuant to section 20-224, 20-837, 20-1010, 20-1060 or 20-1097.07 for net increases in employment positions of residents of this state by an insurer that is located in a military reuse zone established under title 41, chapter 10, article 3. A tax credit is not allowed for the portion of the tax payable to the fire fighters' relief and pension fund pursuant to section 20-224 or the portion of the tax payable to the public safety personnel retirement system pursuant to section 20-224.01. The amount of the tax credit is a dollar amount allowed for each new employee, determined as follows:

1. With respect to each employee other than a dislocated military base employee:

      1st year of employment                      $  500
      2nd year of employment                      $1,000
      3rd year of employment                      $1,500
      4th year of employment                      $2,000
      5th year of employment                      $2,500
 

2. With respect to each dislocated military base employee:

      1st year of employment                      $1,000
      2nd year of employment                      $1,500
      3rd year of employment                      $2,000
      4th year of employment                      $2,500
      5th year of employment                      $3,000
 

B. Pursuant to subsection A of this section, if the allowable tax credit exceeds the state premium tax liability, the amount of the claim not used as an offset against the state premium tax liability may be carried forward as a tax credit against subsequent years' state premium tax liability for the period, not to exceed five taxable years, if the insurer remains in the military reuse zone.

C. The net increase in the number of employees for purposes of this section shall be determined by comparing the insurer's average employment in the military reuse zone during the taxable year with the insurer's previous year's fourth quarter employment in the zone, based on the insurer's report to the department of economic security for unemployment insurance purposes but considering only employment in the zone.

D. A credit is not allowed under this section with respect to an employee whose place of employment is relocated by the insurer from a location in this state to the military reuse zone unless the insurer maintains at least the same number of employees in this state but outside the zone.

E. A taxpayer who claims a credit under section 20-224.03 shall not claim a credit under this section with respect to the same employees.

F. For the purposes of this section:

1. "Dislocated military base employee" means a civilian who previously had permanent full-time civilian employment on the military facility as of the date the closure of the facility was finally determined under federal law, as certified by the Arizona commerce authority.

2. "Insurer" means any entity that is subject to premium tax liability pursuant to section 20-224, 20-837, 20-1010, 20-1060 or 20-1097.07.