Major Industries and Commercial Activity

New scientific and high tech research and development industries have located to Flagstaff, broadening the economic base of tourism, government, education, and transportation, which replaced the lumber, railroad, and ranching eras.

Research activities are important to the city’s economy. The most well-known facility, Lowell Observatory, is currently celebrating the 75th anniversary of the discovery of Pluto, and has done pioneering work in observations of near-Earth phenomena such as asteroids, comets, and belt systems; and in the field of interferometric studies, in which a distributed network of small telescopes together create images of celestial bodies with much higher resolutions than any other single telescope can produce.

Items and goods produced: dog and cat food; surgical/medical instruments and apparatus; wind generators; circuit boards; packaging products; recycled paper products for commercial use

Incentive Programs—New and Existing Companies

Most programs in Arizona are offered at the state level. The Greater Flagstaff Economic Council is a public/private agency that serves the city, county, Chamber of Commerce, and local businesses.

Local programs

The city offers an Infrastructure Assistance Incentive Fund with up to $100,000 available per economic development project.

State programs

Flagstaff businesses in recently expanded Enterprise Zone areas may receive direct state income tax credits based on the number of net new employees hired. Any qualified position is eligible if the position is a full-time permanent job, if the employer pays an hourly wage of above $7.55 an hour (raised from $5.77 in 1997); and if the employer provides health insurance and pays at least 50 percent of the insurance cost. If at least 35 percent of new employees live in any Enterprise Zone areas, then all new net employees qualify for eligibility. Any unused state income tax credits may be carried forward for up to five taxable years, providing the business remains in the Enterprise Zone. Other Enterprise Zone incentives include tax breaks for companies that make more than a $1 million investment and retain a new hire for more than three years. Other programs give tax credits on the cost of installing recycling equipment, exemptions for contractors and vendors of solar energy devices, for pollution control, purchase of construction materials, and research and development investment. State lottery proceeds provide fixed-asset loans to companies for expansion, relocation, and consolidation.