Businesses are Flocking to Arizona – Here & Why

The metro Phoenix has been the hub for top global investments. The e-commerce giant Amazon recently established a Goodyear facility with high-tech robotics.

Located in an 855,000square-foot fulfillment center, the facility offers 3,000 new jobs to Phoenix residents. Sendoso, California’s leading sending platform, has invested over $40 million to launch new offices in Arizona.

Established on a 58,000-square-foot land, the office will bring 1000 more jobs to Arizona. These are two examples of the latest businesses introduced to Arizona. There are many reasons businesses are flocking to Arizona, below being the most popular ones.

Lower Business Taxes

Arizona’s state tax rate is 5.6 percent, which is low. Its combined tax rate of 8.17 percent is lower than California’s 8.44 percent. Its combined city, state, and county sales tax of 8.17 ranks 11th national-wide. Arizona’s combined tax rate is the lowest compared to other southern states.

States such as New York, Seattle, Tennessee, and San Francisco have the highest tax rates. Businesses operating in these states have to strain to hit targets. That’s one of the leading reasons many businesses have launched new operations in Arizona.

Shifting businesses to Arizona enables businesses cut operation costs and increase revenues. Arizona ranks 9th among the top-ten tax-friendly states in the United States.

The low taxes have led to investment in advanced infrastructure, 1-12 public education, and public safety. Combined with a booming economy, these have led to an increased population.

Availability of Affordable Housing

One of the reasons companies flock to Arizona is its affordable housing. The living cost in Arizona is higher than the national average but lower than in California and Nevada. The main factor behind the reduced cost of living in Arizona is affordable housing.

The median price of a home for sale in Buckeye is $225,500, making it easier to own a home. Some parts of Arizona, such as Tucson, have lower prices averaging $155,300.

Comparing housing affordability in the Phoenix metro area with other states gives a good reason why most people love Arizona. Median home prices range around $273 000, while the median household income is $69,100. San Francisco’s median home price is around $1.3 million, 4.8 times higher than the Phoenix metro area. The median income is $116 400, which is 1.7 times higher.

Los Angeles’ median home price is $610,000, which is 2.3 times higher than Phoenix’s. Its median household income is $69,300, almost the same as that of Phoenix. In Denver, the median home price is $408,000, 1.5 times higher.

Compared to Seattle’s $522 000 median home price, Phoenix’s is lower by 1.9 times. Arizona has a huge supply of housing options. Buyers can choose from single-family homes and apartments to condos.

The high supply of rental homes and the low cost of the houses offer more cost-effective housing options for workers. Companies launching new offices in this state do not have to worry about unmanageable living costs. Many reasons have pushed businesses to open new locations in Arizona.

The business environment in Arizona is friendly and allows for cost-effective operations. Business taxes are friendly to businesses of all sizes, and there are many tax incentives. The weather and climate support investors in all industries. Living cost is low, and businesses have access to much low-cost skilled labor.

Lenient Right to Work State Laws

Arizona has rights to work laws protecting workers against paying union dues. The laws give the employee the right to decide whether to join unions. It’s one of the 28 states in the U.S that have passed those laws. The laws have created a more atmosphere, attracting more business.

The laws don’t only benefit workers but also employers. Companies can open new locations in Arizona without worrying about the complex union demands. The laws offer workers freedom and reduce the pressure on employers. Freedom and independence are everything businesses, and workers need to operate.

That has placed Arizona at the top of the best states to invest in. The question of the security of employees because of lack of unionization is still a concern. Yet, laws about the right to work haven’t deprived workers of unionization rights. That’s considering the rate at which more companies launch businesses in Arizona and the fewer complaints.

High Supply of Great Talents

A 2021 CBRE tech talent report ranked Phoenix number 17. It was the 14th biggest tech talent pool in the US, with 98,220 qualified tech workers. The state has over 50 accredited college campuses and universities.

These learning institutions award degrees in different fields. Thousands of graduates in different fields join the labor market every year. Arizona State has more than seven million residents, a population that grows by 200 every day. The large population with many colleges and universities provides an expansive talent pool.

Arizona State has talents in every field, and industries of all types can reap from the large talent pool. You can find top-level executives, entry-level workers, and veteran workers. One of the challenges startups face is a lack of talent. Since Arizona offers enough talents, more companies find it suitable for their new business locations.

Great Tax Incentives

Arizona offers mouthwatering tax incentives to businesses. Arizona has earned a good name for its no inventory tax and low corporate tax rate. The state offers many programs that favor businesses of all sizes and types.

Top business programs are the Arizona Enterprise Zone Program and the Arizona Job Training Program. The many business incentives offer a friendly environment for businesses to grow. Statistics show that the costs of running a business in Arizona are low.

The State has lower business operation costs than New York, Phoenix, and Los Angeles. The recent years have seen new manufacturing and tech industries flock to Arizona. Some companies headquartered in California have shifted their operations to Arizona as the costs are lower.

Businesses making capital investments that create jobs also qualify for tax credits. The jobs must meet certain wage requirements for businesses to qualify for $9000-per-job in tax credits.

Refundable tax credits are available for companies making over $250,000 in capital investment. The jobs must create new jobs in the manufacturing industry. There are also many grants, tax exemptions, and job training grants for qualifying companies.


Low housing prices are the most common reason businesses find this state good for their new business locations. The quality of life is also excellent and can favor people at different stages of life.

Arizona has a good connection to airports, transportation systems, and other public infrastructure. The state’s population is favorable, as the Phoenix metro area gets approximately 200 new residents every day.