Tempe's bond ratings remained strong in 2003, according to recent affirmations by three national bond-rating agencies. The New York rating agency, Fitch, has assigned a "AAA" rating to Tempe's $44,820,000 general obligation bond sale. The "AAA" rating reflects the highest bond rating and will result in lower interest costs that the city will pay on its debt.

In addition to the Fitch rating, Tempe received an "Aa1" rating from Moody's and an "AA+" rating from Standard & Poor's.

Taxes and insurance
Arizona relies on a combination of taxes assessed on income, sales and property valuations to meet expenditures. For nine consecutive years, Arizona has reduced taxes and passed legislation favorable to business.

Some notable aspects of the tax code are:

• No Corporate Franchise Tax
• No Business Inventory Tax
• No Income Tax on dividends from out-of-state subsidiaries
• No Worldwide Unitary Tax
• Aggressive Accelerated Depreciation Schedules
• Virtually all Services Exempt from Sales Tax
• 100 percent of NOL may be carried forward for five subsequent years

Corporate Income Tax: 6.968%

Tempe Transaction Privilege 8.1% (City 1.8%, County 0.7% and State 5.6%)
Tempe Use Tax 7.4 % (City 1.8%, County 0.0% and State 5.6%)

Tempe Real and Personal Property Tax: Primary City Rate $.52 for every $100 in assessed value and Secondary City Rate $.83 for every $100 assessed value.

Unemployment Insurance: 0.82% on first $7,000/employee= $57.40*
*For new companies, the rate is 2.7% for two calendar years, then is set by ADES based on experience. The 0.82% is an average rate of all companies in the state.

Workers Compensation:
Under Arizona’s Workers Compensation Statute, firms may choose one of three methods to insure their employees: (1) self-insurance, (2) private carrier policy, or (3) State Fund.

The National Council on Compensation Insurance determines coverage rates, as endorsed by the Arizona Department of Insurance. Manual rates charges by all carriers are identical for each job classification. Price competition is based on DOI-approved schedule ratings or rate deviations, and on the dividend performance of each carrier.

Arizona annual composite worker costs are among the lowest in the geographic region.