To foster economic growth, the state of Utah administers several tax credit and incentive programs that can apply to both local businesses and out-of-state expansions.

Below is an overview of the most widely used of these programs.

• Economic Development Tax Increment Financing
• Industrial Assistance Account
• Site Ready Utah
• Renewable Energy Systems Credits
• Rural Employment Development Incentive

Economic Development Tax Increment Financing (EDTIF)

EDTIF is used to revitalize specific areas in the state. It captures the increased property taxes generated by new development and reinvests those funds back into the area for further improvements like infrastructure or incentives for businesses.

How Much Money Is Available?

The potential benefit to a successful applicant is 30% of the new state taxes created by the investment or expansion. If the project is in a rural county, the benefit can be up to 50% of the new state taxes created by the investment.

The credit is generally structured as a post-performance award made available for the awardee to use over a period of 5–10 years, depending on the specific agreement terms reached between the Governor’s Office of Economic Opportunity and the awardee.

How Does a Company Qualify?

The EDTIF program focuses on incentivizing investment and expansion for companies in these industries:

• Advanced manufacturing
• Aerospace and defense
• Financial services
• Life sciences
• Healthcare
• Software
• Information technology

Companies in these targeted industries may be eligible based on certain criteria that vary between counties designated as urban, rural, or most rural.

Other, non-retail industries located in rural counties may receive consideration from the Governor’s Office of Economic Opportunity on a case-by-case basis.

Criteria include:

• Industry type
• Company alignment to the targeted strategic industries noted above
• Newly created jobs must pay 100–110% of the average county wage for the project’s location

As a post-performance award, companies must meet certain milestones related to capital investment and job creation agreed upon by the governor’s office to receive the award.

How Do You Claim the Tax Credit?

To claim the credit, applicants must meet the milestones stipulated in the agreement made with the Governor’s Office and provide documentation supporting such. The applicant must also provide documentation supporting the amount of new state taxes deriving from the new project.

If approval is given to the company to claim a credit, the Governor’s Office will issue to the applicant a certificate for such credit. A digital copy of the certificate will also be forwarded to the Utah State Tax Commission.

Industrial Assistance Account (IAA)

The Utah Industrial Assistance Fund was established in 2006 and is a restricted account within the state's general fund that aims to support economic development in rural areas and for emerging economic opportunities. It provides financial assistance for the establishment, relocation, and development of industry in Utah.

How Much Money Is Available?

For each fiscal year, the state has no more than $50 million in funding available for projects as part of the IAA. Funding available for a particular applicant may only be limited by the funds in the IAA and the applicant’s demonstrated economic opportunity and benefit to Utah should the project be located in the state.

How Does a Company Qualify?

Like the EDTIF, the IAA is a post-performance award. However, instead of a tax credit, the IAA provides a loan, grant, or other financial assistance, in return for creating new, high-paying jobs in Utah.

Successful applicants will create 50 new high-paying jobs in Utah, defined as jobs paying 110% of the county average wage for the project’s location. Applicants must also secure commitments or incentives from the city or county, demonstrate stability and profitability, and demonstrate competition with other locations, meaning that absent the award, the project will be located outside of Utah.

For companies receiving loans, the IAA agreement reached in conjunction with the state will provide repayment terms, interest rates, and other terms and conditions as deemed necessary.

For recipients of grants, the IAA agreement will stipulate certain requirements for compliance monitoring for a period of five years and terms for repayment due to nonperformance.

Site Ready Utah

Site Ready Utah is focused on making the location selection process easier for companies considering Utah by proactively locating and certifying sites for future large-scale projects.

The sites reviewed and certified by Site Ready Utah are separated into three categories:

• Certified Site. For large-scale projects of 50–400 acres
• Mega Site 1. For mega-scale projects of more than 400 acres
• Mega Site 2. Same mega-scale acreage with additional certification

While there’s significant upfront investment for landowners to have a site certified, there’s significant benefit to earning a certification, such as increased marketing and marketability of the property and reducing buyer risk.

For buyers, the Site Ready Utah certification program gives easy access to listings and details about participating properties, such as: 

• Properties within the geography being targeted for expansion
• Parcel size
• Certification levels

Accessing the Site Ready Utah property listing allows buyers to spend less time searching for land and expedites the expansion or investment timeline.

Renewable Energy Systems Tax Credit (RESTC)

The Renewable Energy Systems Tax Credit offers tax breaks to businesses who invest in renewable energy systems.

How Much Money Is Available?

For commercial building installations, the tax credit is refundable and is calculated as 10% of the eligible system cost or $50,000, whichever is less. The tax credit amount is calculated the same for all eligible renewable energy technologies.

How Does a Company Qualify?

The RESTC can be applied to commercial renewable energy generating systems.

For commercial systems, qualifying properties include installations utilizing solar photovoltaic (PV), wind, geothermal, hydro, biomass, or certain renewable thermal technologies. To apply for the credit, taxpayers must submit an electronic application to the Utah Governor’s Office of Energy Development (OED) and pay a $15 application fee.

How Do You Claim the Tax Credit?

Once a taxpayer has submitted the required electronic application and paid the fee, the OED reviews the application, and if approved, the OED will issue the taxpayer a Form TC-40E.

Receipt of this form will evidence the OED’s certification stamp thus verifying the credit is approved and the amount of such credit that can be claimed on an original state income tax return. The form doesn’t need to be attached to the return. The credit may then be carried forward up to four years.

Rural Employment Development Incentive (REDI)

The Rural Employment Development Incentive grant is designed for businesses creating new high-paying jobs in rural Utah communities. The grant may be available to businesses creating new employment positions in rural counties or certain cities or towns within Weber, Davis, Utah, or Washington counties that have a population of 10,000 or less.

How Much Money Is Available?

Businesses may receive $4,000 to $6,000 per new, eligible position created with the amount varying based on the type of job created and the average county wage. New jobs may be remote, online, working from a satellite office or hub space, or be at the same location as the business. A business may not receive more than $250,000 of REDI grants in a single year.

How Does a Company Qualify?

Apply and receive approval for REDI grants through the Utah Governor’s Office of Economic Opportunity in advance of creating any new position(s).

Each newly created position must meet each of the following criteria to be eligible for the REDI grant:

• A full-time position of 30 hours per week or more
• That is new, and isn’t being relocated from another jurisdiction
• Existing for at least 12 consecutive months
• Paying at least 110% of the county average wage for the county the job is in
• Isn’t for a business primarily engaged in construction, retail, staffing, or public utilities

From the time of signing the initial agreement, the business generally has six months to hire the projected employees for the new, full-time positions.

The grant is offered post-performance of the company meeting its program obligations and funds will be disbursed to the business at such time. The business may submit a request for funds within 90 days of the close of the six-month hiring period.

We’re Here to Help

For more information on tax credits and incentives for each state, contact your Moss Adams professional.

Additional Resources

• State & Local Tax Services

• Tax Credit & Incentive Services