A.R.S. ºº 43-1076 and 43-1162 allow a business that operates a healthy forest enterprise to receive a nonrefundable credit against corporate and individual income tax liabilities for taxable years beginning from and after December 31, 2011 through December 31, 2024.
In order to claim either credit, the business must be a qualified healthy forest enterprise, as certified by the Arizona Commerce Authority (Commerce). The business must provide a copy of its Commerce certification to the department for approval before using the certification to obtain this credit.
The credit is available to an exempt organization that is subject to corporate income tax on unrelated business taxable income (UBTI). The credit must result from the activities that generate UBTI.
While a taxpayer may claim both credits for healthy forest enterprises with respect to the same employees, the credits for healthy forest enterprises are in lieu of the following credits, with respect to the same employees:
*The credit for new employment, under A.R.S. §§ 43-1074 or 43-1161 (claimed on Arizona Form 345); and
*The military reuse zone credit, under A.R.S. §§ 43-1079 or 43-1167 (claimed on Arizona Form 306).
In general, a qualified healthy forest enterprise is a business operation that enhances or sustains forest health, sustains or recovers watershed or improves public safety. A qualified healthy forest enterprise must be primarily engaged in the business of harvesting, transporting or processing of qualifying forest products for commercial use. To obtain information regarding additional criteria for qualification, contact Commerce using the contact information shown above.