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Updated Apr 11, 2014 - 11:51 am

Arizona Gov. Jan Brewer signs manufacturer tax cut law

PHOENIX -- Gov. Jan Brewer signed legislation Friday eliminating sales taxes on electricity bought by manufacturers.

Brewer signed Senate Bill 1413 during a ceremony at the Arizona Capitol.

"Arizona will join 38 other states that do not tax electricity on manufacturers. To have a tax on the books for electricity used by manufacturers is a red flag for some manufacturers," business leader Glenn Hamer said.

"This focused on manufacturers and will make it easier to attract and retain jobs," said the president and CEO of the Arizona Chamber of Commerce and Industry.

Brewer had called for the tax cut in her State of the State address in January. She said it's needed to make Arizona more competitive and draw new manufacturing to the state. It is expected to cost the state general fund $17 million a year.

"These new companies coming in will come here because the tax is no longer here. The state will still collect income tax, construction tax, so the net new contribution will be staggeringly to the positive for Arizona to address issues like education and CPS," local business leader Barry Broome said. Broome is president and CEO of the Greater Phoenix Economic Council.

"This makes us much more attractive for expansions by Apple and Intel and it makes us more competitive to attract companies like Tesla," he said.

A second bill, granting a multimillion-dollar tax credit to Apple, Inc., if it installs a solar plant worth at least $300 million at its planned Mesa sapphire glass factory, is awaiting action by Brewer.

KTAR's Jim Cross contributed to this report.

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