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Inward Investment Guides

Utah Direct Financial Incentives 2011

Utah's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include the Utah Department of Workforce Services (DWS), Workforce Investment Act (WIA), and the Short-Term Intensive Training (STIT).

Area Development Online Research Desk (March 2011)
Economic Development Tax Increment Finance (EDTIF):
The Economic Development Tax Increment Finance (EDTIF) was created by the Utah Legislature in 2005 and allows for businesses to locate in economic development 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, post performance tax credits can be awarded by the state. Post performance tax credits are based on new state revenues generated by the new commercial projects, and are given to the companies that create new high-paying jobs and create economic growth within the development zones.

Industrial Assistance Fund (IAF):
(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, be a corporate headquarters or considered a special economic opportunity.

(b) Rural
• IAF covers companies from the Wasatch Front expanding to rural areas.
• IAF may be used to retain companies in rural areas.
• Amount of IAF assistance is based on the number of new jobs created that pay at least the county average.

(c) Corporate
• Given to companies relocating to Utah from out of state or in state companies that are considering significant growth which could result in expansion elsewhere.
• Given if the project would not locate in Utah without IAF assistance.
• Additional industries are considered.
• Renewable Energy Development Incentive is given as a post-performance refundable tax credit based on new state revenues over the life of the project.

Utah State Economic Development Contact:
Governor's Office of Economic Development
324 S. State Street, Fifth Floor
Salt Lake City, UT 84114
(801) 538-8792

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 revenue bonds may also be available and issued through local government entities.

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 to 21 days.

Revolving loan funds:
The State of Utah has endeavored to encourage business growth through the establishment of Revolving Loan Funds (RLF's), 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).

Incumbent Worker Training
Utah Department of Workforce Services (DWS) utilizes a computerized job-matching system that quickly screens applicants to ensure that they meet the qualifications set by a hiring company. Over 16,000 active applicants are presently registered with DWS. Space is available at DWS offices all around the state for companies to interview applicants, or Workforce Services employees can assist personnel offices on the company premises. Special programs such as Affirmative Action, Targeted Job Tax Credits, Veterans Programs and incumbent worker training 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 are designed to meet the specific training needs of a company. They match company 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 University 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.

Foreign-trade zones:
Utah has one foreign-trade zone that is located in an industrial/business park near the Salt Lake City International Airport. This zone operates outside the U.S. Customs Department's oversight, allowing duties on imported goods to be deferred until they leave the zone. The state has recently added ED 5.

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.
• Five percent state income tax credit on the investment in machinery and equipment.
• Twenty 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, such as an under 30,000 county population and demonstrated economic distress.
• 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) Twenty-five percent credit on the first $200,000 invested in rehabilitating a vacant building;
5) Annual 10 percent credit on the first $250,000 investment and five 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 Utah counties have Enterprise Zones: Beaver, Box Elder, Carbon, Daggett, Duchesne, Emery, Garfield, Grand, Juab, Kane, Millard, Piute, Rich, San Juan, Sanpete, Sevier, Tooele, Uintah and Wayne.

Utah State Contact:
Department of Community and Culture
324 S. State Street, Fifth Fl.
Salt Lake City, UT 84114
(801) 538-8700


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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