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The Senate Finance Committee on Monday voted to recommend passage of , which would extend an existing sales tax exemption for clean rooms and clean room equipment鈥攃urrently reserved for semiconductor manufacturers鈥攖o other high-tech industries, including biotechnology, life sciences, and medical device production.

What the bill does 

Clean rooms, which are highly controlled environments used in manufacturing and research, are critical for industries that require precise contamination control. SB 1539 would expand the state鈥檚 TPT (Transaction Privilege Tax) deduction for any clean room used in manufacturing. 

Arizona has long provided tax exemptions for clean rooms used in semiconductor manufacturing, a policy that supporters say has helped establish the state as a national leader in the industry. With companies like Intel and TSMC investing billions in Arizona, proponents of SB 1539 argue that expanding the exemption to other industries could provide a similar boost to biotech and medical device manufacturers, further diversifying the state鈥檚 innovation economy.

鈥淚 come to you with a clean bill about clean rooms,鈥� said bill sponsor Sen. Frank Carroll (R-Surprise). 鈥淪imply put, we鈥檙e just taking that limiter out about it being assigned just exclusively to semiconductor manufacturing when clean rooms are used in a lot of other industries.鈥�

Legislation aims to fuel high-tech job growth and investment

Business groups and industry leaders testified in favor of the bill, saying the tax exemption would encourage companies to invest in Arizona and create high-paying jobs.

Joan Koerber-Walker, president & CEO of the Arizona Bioindustry Association, said reducing tax burdens on clean rooms could help keep Arizona-trained talent in the state.

鈥淥ne of the biggest challenges we face as an industry is how do we attract the companies to fill that space,鈥� Koerber-Walker said. 鈥淲hen they fill that space, they create the jobs, and when they create the jobs, we have more positions for our students that we are educating and exporting out of the state because we don鈥檛 have enough jobs to match the number of students.鈥�

Former Honeywell Aerospace CEO Mike Madsen also voiced support, emphasizing that clean rooms are no longer limited to semiconductor production.

鈥淐lean rooms are becoming more important in a wide range of innovation industries beyond semiconductors,鈥� Madsen said. 鈥淲e have found that there are many other innovation industries that need clean rooms and would benefit from expanding the sales tax exemption.鈥�

Where stakeholders stand

Supporters of the bill include the Arizona Manufacturers Council, the Arizona 樱花动漫 of Commerce & Industry, and the Arizona Bioindustry Association.

Rural Arizona Action, a political advocacy group, opposes the bill.