PHOENIX — A Republican lawmaker whose proposal to give computer chip maker Intel a new way to use millions of dollars in tax credits was rejected by the full House pushed another proposal to cut taxes on manufacturing firms through a House committee Wednesday.
Chandler Rep. Jeff Weninger's new proposal extends a job-creation tax credit for big companies that had been set to expire this year until 2025. It also gives super-fast depreciation to Intel and other manufacturers in special trade zones that already pay an ultra-low tax rate on new equipment.
It indefinitely extends a current research and development tax credit that is supposed to be reduced next year.
The depreciation portion will substantially cut the property tax and especially affect Intel, which plans to equip a new Chandler chip plant with billions of dollars of new equipment.
Out are proposals letting companies cash in existing research and development tax credits that they hold but can't redeem because the Legislature has excluded much of the manufacturers' income from state taxes.
There are more than $1 billion in unused R&D tax credits currently on the books. Also out is a provision returning half the income tax withholding from new workers and creating a new sales tax exemption for some supplies.
"Basically this is a similar version to the one before while taking out all the things people had problems with," Weninger told the House Ways and Means Committee.
The panel on which Weninger sits approved Senate Bill 1416 on an 8-1 vote, advancing it to the full House for consideration. If approved there, it will return to the Senate to approve the changes Weninger made using a so-called "strike-everything" amendment.
The full House had rejected Weninger's earlier proposal on a 23-36 vote even after he removed provisions accounting for $5 million of the original $20 million cost.
The depreciation part of the new proposal is estimated to cost $1.5 million in 2019 alone, Weninger told the panel. The costs of the extension of the existing jobs tax credit and the R&D tax credit proposal were not outlined.
In other action Wednesday on tax incentives, a Senate panel rejected a proposal from Rep. T.J. Shope, R-Coolidge, that would have allowed financing companies to claim up to $30 million in tax credits if they invested $20 million in new or expanded rural businesses.
The 2-5 defeat in the Senate Finance committee of House Bill 2530 came after members expressed concern that it would benefit an out-of-state company, Advantage Capital Partners, which was pushing the legislation.
The same Senate panel approved another proposal allowing up to $10 million in tax credits for companies that invest in small businesses. The so-called "angel investor" proposal was added onto House Bill 2191 after the original proposal contained in another bill stalled in the House.