Utah Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions, or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Utah, and their state economic development professionals gave us some details (Utah economic development site click here).
Utah offers a paltry selection of credits and incentives for new and existing businesses, and very few companies actually utilize the incentives.  However, CNBC ranked Utah #1 (!!) in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey).  They ranked high in most survey categories, but those did not include incentives offered.   
Incentives and Credits include:
EDTIF Tax Credit — a post-performance, refundable tax credit with rebates for up to 30% of new state revenues (sales, corporate and withholding taxes paid to the state) over the life of the project (typically 5-10 years). Available to companies seeking relocation or expansion of operations to the State of Utah, and must be a competitive project.
Life Science and Technology Tax Credits — for qualifying life science and technology  investors.  Eligible investors may submit applications to GOED for tax credits drawn from $300,000 of funds expressly set aside by the Legislature.

Other Incentives — Some local exemptions and credits, recycling, and other limited incentive programs.

Compared to Georgia, Utah has:
  • About the same corporate and personal income tax rates.
  • Comparable combined state and local tax burden
  • A far narrower range of incentives.
  • Pre-approval required for all incentives
All Utah state incentives are awarded on a “post-performance” basis: companies must meet specific, pre-approved milestones, including generation of new state tax revenue, before incentives are disbursed.

To summarize, Utah is below average for business tax incentives, but if you love to ski, you can’t beat the location!