Utah experiences an exponential increase in new capital investment through tax credit programs
The Utah Governor’s Office of Economic Opportunity today announced that Utah-based businesses continued to operate and further invest in the state during fiscal year 2023 (FY23). The Office of Economic Opportunity administers the Utah Legislature’s Economic Development Tax Increase Fund (EDTIF) credit program. Provides a post-performance tax credit that offers companies a reduction in their marginal tax rates, up to 30% of new state tax revenues (Utah sales, corporate income, and state payroll withholding taxes), during a period defined (usually 5 to 10 years).
Utah reported a more than 500% increase in new capital investments this fiscal year over the prior year. Average capital expenditure per project has increased due to increased investment in areas such as technology and automation. From July 2022 to June 2023, 16 companies participated in the state’s EDTIF program and are expected to create 3,630 new jobs, make $12,347,247,968 in new capital investments, pay more than $574,641,262 in new state tax revenue, and they will provide $4,083,879,940 in new state wages over the next 20 years.
« This has been a historic and prosperous year for Utah’s economic growth, » said Ryan Starks, executive director of the Utah Governor’s Office of Economic Opportunity. “We have achieved new milestones, including the largest economic investment in Utah history with the expansion of Texas Instruments. The EDTIF and REDTIF tax incentive programs continue to attract investment from companies representing a variety of industries and I would like to thank our team for their collective efforts.”
Created by the legislator in 2005, the EDTIF program is aimed at companies that offer high-wage jobs, paying at least 110% of the county average wage. By design, the program has a multiplier effect, creating additional jobs that support business expansion in Utah’s diverse economy.
In FY23, the EDTIF program remained strong. Utah has maintained its status as one of the best places for companies looking to expand. Trends for the year included more projects targeting locations away from the Wasatch Front and in rural Utah.
The Rural Economic Development Tax Increase Financing (REDTIF) Tax Credit Program is a recent rural modification of the EDTIF program that allows projects located in rural areas to qualify for more significant incentives. With this tool, the state has seen unprecedented economic opportunities flow to its more rural communities. Projected capital investment in rural Utah from projects announced in AF23 totals more than $1.2 billion, the same as in 2022, with more than double the combined 2017-2021 capital investment of what Utah rural saw by state incentives.
The tax credit is available to Utah corporations expanding and other businesses relocating or establishing additional operations in Utah. Utah-based companies used the tax credit more often. Since its inception, approximately two-thirds of the program’s tax credits have gone to Utah-based companies to help them expand and create more jobs for Utah residents.
« Our state continues to do a phenomenal job of retaining and recruiting companies that bring higher-paying jobs to Utah and continue to diversify our economy, » said Carine Clark, chair of the board of Economic Opportunity. « This is a direct result of our joint efforts resulting in strategic economic plans. »
“We are proud of the collaborative efforts that have helped create and sustain high-paying jobs for Utahns,” said Scott Cuthbertson, president and CEO of EDCUtah. “Companies that choose to invest in Utah are leaders in their industries and good corporate citizens. They will have an immense impact on the prosperity of our communities for generations to come. »
Learn more about the state’s post-performance EDTIF/REDTIF program here.
