Economic Development Tax Increment Financing (EDTIF)

Economic Development Tax Increment Financing (EDTIF) is sponsored by Utah Governor's Office of Economic Opportunity. A corporate incentive program designed to maintain Utah's robust environment for economic development. Rural modifications (REDTIF) qualify projects in rural Utah for more significant incentive amounts.

Business Recruitment & Expansion - Governor's Office of Economic Development Business Recruitment & Expansion Whether growing from within or recruiting targeted industry firms, Utah’s economy continues to lead the nation with its business-friendly environment. The office’s Business Recruitment and Expansion team recommends financial incentives for local and out-of-state companies seeking to expand or relocate to Utah.

The Economic Opportunity Board votes on all proposed incentives in a public meeting. The office’s executive director provides the final sign-off on all awarded incentives. Incentives are available to select companies creating new, high-paying jobs that improve quality of life, increase the tax base, and help diversify state and local economies.

Incentives are offered as tax credits or grants. They’re disbursed only after the company has met contractual performance benchmarks, including job creation, capital expenditure, and payment of new state taxes. Since its 2005 inception, approximately two-thirds of the companies participating in the state’s tax credit incentive program are Utah-based companies.

The state Legislature created Utah’s incentives program. It’s called an Economic Development Tax Increment Financing (EDTIF) tax credit. The statute that governs Utah’s economic development incentives is titled U.

C. A. 63N-2-106(2) .

The Utah Legislature created the Economic Development Tax Increment Financing (EDTIF) corporate incentive program in 2005. As the state’s needs and economy continue to evolve, the Legislature fine-tunes the EDTIF program to maintain Utah's robust environment for economic development.

New guidelines from the 2022 legislative session focus on creating jobs throughout Utah while recognizing the unique challenges in the state's urban and rural areas. The EDTIF program is available for companies expanding in targeted industries in urban counties.

These targeted industries include: Tech (AI, Quantum, Blockchain) Life Sciences & Healthcare The office may authorize additional, non-retail projects outside of these targeted industries in rural communities. Additionally, with the rural modifications to the EDTIF program, known as REDTIF, projects within rural Utah qualify for more significant incentive amounts.

The office will evaluate projects applying for the EDTIF program, in urban and rural areas, on the following criteria: The average wage of planned new jobs Capital expenditure investment Type and number of new jobs created Whether or not the jobs are related to headquarters or innovation operations The company’s corporate citizenry efforts The table below outlines how the EDTIF program applies in different areas of Utah.

Project located in Salt Lake, Davis*, Utah*, or Weber* counties Project located in Box Elder, Cache, Iron, Summit, Tooele, or Washington* counties Project located in all other counties Project must be in one of five strategic targeted industries Targeted industry preferred but not required Targeted industry preferred but not required New jobs created must pay at least 110% of the average county wage New jobs created must pay at least 100% of the average county wage New jobs created must pay at least 100% of the average county wage Percentage of new state tax revenue from the project that may be given in a post-performance tax credit Up to 30% in most cases and up to 50% for very large projects 50% for all qualifying projects *For the EDTIF program, incorporated towns within these counties that have fewer than 10,000 residents are considered rural.

▸ EDTIF & REDTIF Service Requirements Utah has always been a place dedicated to providing service and is currently ranked the No. 1 most charitable state . We believe a large part of Utah’s success comes from the willingness of Utahns to serve and strengthen communities. These core values led Gov. Spencer Cox to create an executive order requiring incentivized businesses to commit similarly to service and volunteerism.

Beginning on Jan. 1, 2024, companies that agree to a tax incentive must provide 20 hours of service per new high-paying job per year for the duration of the incentive . As reviewed by the Governor’s Office of Economic Opportunity (GOEO) board and by established rules, the company must detail plans to fulfill these service hours in the incentive application.

When a company files to receive a tax credit, the annual report must contain the total hours of service completed and the types of services provided. Generus provides tracking services for companies and their employees. UServeUtah is the state of Utah’s Commission on Service and Volunteerism.

UServeUtah is happy to connect you to service opportunities in your community so you can make a difference wherever and however you want to serve. We are excited to collaborate with nonprofit, faith, and government organizations nationwide to share volunteer needs and serving opportunities. Use our incentives dashboard to view participating companies by name, year, and more.

Workforce services are key to Utah’s economic success — connecting talent with opportunity, supporting business growth, and ensuring our workforce is ready to meet the demands of a dynamic, expanding economy. ▸ EDTIF & REDTIF Tax Credits Utah's Economic Development Tax Increment Financing (EDTIF) Tax Credit The EDTIF program is available to companies looking to expand in targeted industries in Utah's urban counties.

These targeted industries include: Tech (AI, Quantum, Blockchain) Life Sciences & Healthcare Utah’s Rural Economic Development Tax Increment Financing (REDTIF) Tax Credit The REDTIF program, a modification to the EDTIF program, offers tax incentives to companies investing in rural Utah.

Unlike the EDTIF program, restrictions regarding targeted industries do not apply, wage requirements are easier to fulfill, and the maximum possible tax incentive is much higher than that of the EDTIF. Incentive Process and Details Companies seeking to participate in the EDTIF program can be approved in as little as three months.

Steps to enter into a contract for an incentive include pre-application review, application, incentive committee review, and public board meeting. Pre-application review includes a discussion of industry, number of high-paid jobs, and new capital. EDTIF tax credit is a post-performance, refundable tax credit of new state revenues limited to sales, corporate, and withholding taxes paid to the state over the life of the project.

EDTIF tax credit is a post-performance, refundable tax credit for up to 30%, and in certain cases the REDTIF is up to 50% of new state revenues. The incentive is available to Utah companies and others seeking to relocate or expand operations to Utah. ▸ Industrial Assistance Account (IAA) The IAA is a grant or loan to foster and develop industry in Utah by funding one-time economic opportunities or talent development.

The IAA is extended by invitation only, following a program administrator's evaluation of the request's merits, benefits, and value to the state. Each request undergoes an internal review to assess its potential industry or community-wide impact if awarded the grant or loan.

▸ Technology & Life Science Tax Credits During the 2016 general session, the Utah Legislature changed the Technology and Life Science Economic Development Act, giving the Governor’s Office of Economic Opportunity authority to issue tax credits to qualifying technology and life science investors. Eligible investors may submit applications for tax credits drawn from $300,000 of funds expressly set aside by the Legislature.

Post-performance non-refundable tax credit for up to 35% of the investment over three years Up to 10% of the purchase price of the qualifying ownership interest in the year the qualifying ownership interest is purchased Up to 10% of the purchase price in the second year after the qualifying ownership interest is purchased Up to 15% in the third year after the qualifying ownership interest is purchased Tax credits for Utah life science entities capitalized under $2,500,000 An investor must invest at least $25,000 and not have more than a 30% ownership interest in the business entity at the time of investment The investment may not be finalized before application and formal approval of the tax credit No credit may exceed $350,000 in any year Not permitted to carry forward or backward For additional information, please contact Lance Soffe at [email protected] .

▸ Utah New Market Tax Credit In 2014, the Utah Legislature enacted the Utah Small Business Jobs Act to attract additional investment in the most severely distressed areas of the state. New Market Tax Credit programs are an effective tool used by the federal government and 13 states, including Utah, to attract private capital investment in areas in need of job growth and economic opportunities.

To learn more, please email us at [email protected] .