The Economic Development Tax Increment Finance (EDTIF) assists relocation and expansion of both businesses new to Utah and companies who are already located in Utah who are looking at major new expansions that will create significant new job development. Economic development zones are created for commercial, industrial, manufacturing, business parks, research parks or other appropriate uses in a community-approved master plan. Under the EDTIF incentive process a commitment from the local government entity to provide local incentives must be a part of the package, then a post-performance tax credit incentive by the state can be awarded. Post-performance tax credits are based on new state revenues (corporate income tax, wage/payroll tax and Utah sales or use tax paid) generated by the 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):
IAF like the EDTIF has similar requirements for new jobs and capital investment in Utah. The Incentive is based on a post-performance per job or capital investment and can payout appropriated post-performance cash while the ETIF issues tax credits. Consequently, IAF awards are substantially smaller and less common than ETIF incentives.
- 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.
- IAF covers companies from the Wasatch Front expanding to rural areas.
- IAF may be used to retain or grow companies in rural areas.
- Amount of IAF assistance is based on the number of new jobs created that pay at least the county average wage.
- Or a percentage of the Capital Investment spent in rural counties.
- 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.
- Considered if the project would not locate in Utah without IAF assistance.
Renewable Energy Systems Tax Credit
The Investment Tax Credit is worth 25% of eligible system cost or $2,000, whichever is less, for residential installations, and 10% of eligible system cost or $50,000, whichever is less, for commercial installations. Eligible technologies include solar photovoltaic, solar thermal, wind, geothermal, hydro, and biomass.
Production Tax Credit
The Production Tax Credit is $0.0035/kilowatt hour for a project’s first four years. For the purposes of the credit, the “renewable energy” category includes: wind, geothermal and biomass. Please contact OED if you are aiming to pursue a Production Tax Credit.
Alternative Energy Development Incentive (AEDI)
A fixed post-performance credit of 75% of all newly generated state revenues for 20 years. Eligible projects include the construction of electricity generation facilities of 2 megawatts or greater that utilize hydroelectric, solar, biomass, geothermal, wind, and waste-heat. It also includes energy derived from the following non-renewable energy sources: nuclear fuel, oil-impregnated diatomaceous earth, oil sands, oil shale, or petroleum coke. To qualify for an incentive, the project must generate new state revenue and new incremental jobs, and it must involve significant capital investment, or the creation of high paying jobs.
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
- Training conducted at Salt Lake Community College campuses, Applied Technology Center or business location.
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.
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 EB 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.
Theresa Foxley, Managing Director
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. This information was last updated January 2016.