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Area Development Homepage >> State Resources >> Utah >>
Utah Direct Financial Incentives
Area Development Online Research Desk (Feb/Mar 09)
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Industrial development bonds:
Municipalities and counties issue industrial development bonds on behalf of private companies to achieve greater industrial development of manufacturing facilities in the state. Interest rates are negotiated between the bond purchaser and the borrowing company. Term in years of bond issues is not limited by the state. Ninety-five percent of bond proceeds must be used for manufacturing facilities. They cannot be used to refinance debt, inventory, or operating capital. Industrial Assistance Fund (IAF) — State of Utah Discretionary Fund: (a) Urban • Established in 1991 by the Utah State Legislature. • Financial strength of the company and track record are very important. • IAF assistance is tied to the creation of jobs that pay more than 125 percent of the county average. • Companies must create at least 50 new jobs. • Companies must be in one of the following target industries: biomedical, finance, technology, or aerospace, or be a corporate headquarters. (b) Rural • IAF was broadened to include rural areas outside of the Wasatch Front in 1994. • IAF covers companies from the Wasatch Front expanding to rural areas. • IAF may be used to retain companies in rural areas. • IAF assistance may be given to companies in rural areas creating ANY new jobs. • Amount of IAF assistance is based on the number of new jobs created. (c) Corporate • Given to companies relocating to Utah from out of state. • Given if the project would not locate in Utah without IAF assistance. • Additional targeted industries are considered. Custom Fit Training: • Customized training to meet companies' needs. • State funds are available to subsidize training expenses ($500 cap per employee). • Training conducted at Salt Lake Community College campuses, Applied Technology Centers, or business location. • Contract processing can be fast-tracked to 15–21 days. Revolving loan funds: The State of Utah has endeavored to establish and operate Recycling Loan Funds (RLFs), utilizing a variety of federal resources. These resources include: (1) direct loans to the private developer through the Farmers' Home Administration; (2) direct loans and RLF capitalization through the Economic Development Administration (EDA); and (3) RLF capitalization through the Department of Housing and Urban Development's Community Development Block Grant program (CDBG). Work Force Service: Work Force Service offices utilize a computerized job-matching system that quickly screens applicants to ensure that they meet the qualifications set by a locating company. Over 16,000 active applicants are presently registered with the Salt Lake Office. Space is also available at Work Force Service offices to interview applicants, or Work Force Service employees can assist personnel offices on the company premises. Special programs such as Affirmative Action, Targeted Job Tax Credits, and veterans programs are also available. Short-Term Intensive Training (STIT): STIT programs are customized and designed to meet full-time job openings. Programs are usually less than one year in length, and will be designed to meet the specific training needs of a company, while matching needs with people seeking employment. Although potential employers/employees must pay tuition to participate, STIT can provide qualified employees from which a company can hire. STIT gives the option of training at a 66 percent discount of normal costs. State funding for this program is distributed to the following: Weber State University, Southern Utah State University, Salt Lake University, Utah Valley Community College, and the College of Eastern Utah. Workforce Investment Act (WIA): The federally funded Workforce Investment Act provides funds to prepare unskilled youth and adults for jobs in private industry. It provides job training for the economically disadvantaged, dislocated, and others who face significant barriers to employment. Activities funded by the WIA may include on-the-job training, classroom training, and support services (such as transportation, tools, and job search). Fifty percent of wages can be paid up to 1,000 hours of training, excluding holidays, sick leave, and vacation. Aerospace/aviation development zones: The Utah Aerospace and Aviation Tax Increment Finance (AATIF) was created by the Utah Legislature in 2003 to encourage the development of the aerospace industry. The incentive allows state economic development officials to provide a partial rebate of new incremental state revenues to aerospace/aviation companies as an incentive for new development projects and creation of high paying jobs. Eligible projects must be at or around airports that have an instrumental landing system, a manned air traffic control tower, and land available for commercial development. Economic development zones: The Economic Development Tax Increment Finance (EDTIF) was created by the Utah Legislature in 2005 and allows for businesses to locate in zones that are created for commercial, industrial, manufacturing, business parks, research parks, or other appropriate uses in a community-approved master plan. After a commitment from the local government entity to provide local incentives is made, partial tax rebates are awarded by the state. Tax rebates are based on new state revenues generated by new commercial projects, and are given to the companies that create new high-paying jobs and create economic growth within the development zones. Foreign-trade zones: Utah has one foreign-trade zone that is located in the International Center, an industrial/business park near the Salt Lake City International Airport. This zone operates outside the U.S. Customs Department's territory, allowing duties on imported goods to be deferred until they leave the zone. Recycling market development zone program: The act passed by the Utah State Legislature provides tax credits for companies residing in the zone and collecting, processing, and handling recycled materials or use them in their manufacturing processes or composting. • 5 percent state income tax credit on the investment in machinery and equipment; • 20 state income tax credit (up to $2,000) on eligible operating expenses; and various local incentives Enterprise zones: • Designated on a countywide basis for counties meeting specified criteria. • Eligible businesses locating or expanding to Enterprise Zones may receive the following corporate income tax credits: 1) $750 for the creation of each new job during the tax year; 2) an additional $500 credit for the creation of each new job paying at least 125 percent of the county's average monthly wage for the respective industry; 3) an additional $750 credit for the creation of each job adding value to agricultural commodities through manufacturing; 4) 25 percent credit on the first $200,000 invested in rehabilitating a vacant building; and 5) annual 10 percent credit on the first $250,000 investment and 5 percent on the next $1 million in plant, equipment or other depreciable property. • All businesses are eligible for tax credits except construction, retail businesses, and public utilities. • The following counties are designated Utah Enterprise Zones: • Box Elder, Carbon, Daggett, Duchesne, Emery, Garfield, Grand, Juab, Kane, Millard, Piute, Rich, San Juan, Sanpete, Sevier, Tooele, Uintah, and Wayne. • For more specific details, please contact local county economic representatives. Other available incentives: • Utah's Freeport Law enacted in 1988 exempts inventory or other personal property held for sale from property taxation. Please see Utah Code Section 59-2-12-1. • Industrial revenue bonds are available and issued through local government entities. There is a $10 million cap per issue, with a $240 million total annual state allocation cap. Utah State Contact: Division of Business and Economic Development 324 S. State Street, Fifth Fl. Salt Lake City, UT 84114 (801) 538-8640 Incentive and tax information is provided to Area Development by each state’s economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. |
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