Tech tax cuts passed, signed by governor

So-called 'Apple bill' may also help lure Tesla Motors

KINGMAN - The Arizona House and Senate passed a pair of tax cut bills in a push to entice big-name technology manufacturers to come to the state.

Both bills would help GT Advanced Technologies, which just recently signed a $578 million deal with Apple to build the world's largest sapphire-crystal glass manufacturing plant in Mesa.

SB-1413, which waives sales taxes on electricity or natural gas purchased by manufacturers and mining smelters, passed both chambers with almost unanimous support. Gov. Jan Brewer signed the legislation on Friday. The bill is projected to cost the state's general fund $17 million a year in tax revenue.

"Until today, Arizona has still been one of only a few states to impose a sales tax on businesses for energy they use to manufacture products - and that's put us at a disadvantage with other states. Signing SB-1413 affirms our message that Arizona is open for business," Brewer said Friday.

SB-1484 implements a tax credit for companies that invest in new renewable energy facilities that produce energy for self-consumption. The energy must be primarily used for manufacturing. It would give companies who invest $300 million into their own renewable energy sources a $5 million tax credit.

SB-1484 passed the Senate 27-1 but had opposition by House Conservatives, passing with a 34-21 split. Representatives in the opposition voiced their concerns that the bill provides tax breaks for one specific business rather than benefiting the state as a whole.

State Sen. Kelli Ward, R-Lake Havasu City, State Rep. Doris Goodale, R-Kingman, and State Rep. Sonny Borrelli, R-Lake Havasu City voted Yes on both bills.

The Apple plant is currently under construction in Mesa's Foreign Trade Zone. The plant will employ 700 and will produce sapphire glass for Apple products. It will feature an extensive renewable energy grid to power it.

Sapphire glass is derived from man-made sapphire, which is the 2nd hardest material in the world after diamond. The glass is extremely difficult to scratch, making it ideal for electronic displays that require large glass surfaces.

The glass is currently in use on Apple's iPhone 5s. It coats the glass covering the camera and the home button that houses a fingerprint sensor. Apple has also patented a processing technique that fuses a thin layer of sapphire glass with cover glass, which may be used in future Apple displays.

The tax cuts have also been viewed as a bid for bringing a $5 billion Tesla Motors battery factory to Arizona. Tesla, which builds electric cars, is looking to build a battery factory domestically to fulfill future demand. They are looking at Arizona, Nevada, New Mexico, and Texas to build the 500-plus acre factory. The factory is scheduled to begin construction this year and will net 6,500 jobs by the time production starts in 2017.

Both bills would benefit the Tesla factory if it is built in Arizona.