Enterprise Zone Area Designation Application

THE ENTERPRISE ZONE TAX CREDIT PROGRAM

Note: No new Enterprise Zone Designations will be granted after December 31, 2020!

The Utah Enterprise Zone Tax Credit Program was established in 1988 to promote economic development and business growth in rural areas of the State of Utah. An Enterprise Zone comprises an area identified by local elected and economic development officials and designated by the state. Cities under 20,000 in population in counties under 70,000 in population, or an Indian Tribe for tribal lands are eligible to apply. Designation is granted after a review of this application on the basis of economic development need and other economic distress factors. 

Under this program, certain types of businesses locating to, or expanding in a designated Enterprise Zone may claim these tax credits.

WHAT ARE THE TAX CREDITS?

There are two types of tax credits under the Enterprise Zone—the Job Creation Tax Credit and the Capital Investment Tax Credit.

JOB CREATION TAX CREDIT

1.      A $750 tax credit for each new full time position created within the Enterprise Zone;

2.      An additional $500 tax credit if the new position pays at least 125% of the county average monthly wage non-agricultural payroll wage;

3.      An additional $750 tax credit if the new full-time employee position created within the enterprise zone in in a business entity that adds value to agricultural commodities through manufacturing or processing;

4.      An additional $200 tax credit may be claimed for two consecutive years for each new full-time employee position created within the enterprise zone that is filled by an employee who is insured under an employer-sponsored health insurance and the employer pays at least 50% of the premium cost for the year for which the credit is claimed. 

CAPITAL INVESTMENT TAX CREDIT

1.      A tax credit of 25% of the first $200,000 spent on rehabilitating a building in the enterprise Zone that has been vacant for at least two years or more, including that the building has had or contained no occupants, tenants, furniture, or personal property in the time period immediately before the rehabilitation.

2.      An annual investment tax credit of 5% of the first $750,000 in qualifying investment in plant, equipment, or other depreciable property.

 

ADDITIONAL INFORMATION

·         Tax credits are available to eligible businesses in designated enterprise zones from the beginning of the tax year in which a zone is designated.

·         Under the Job Creation Tax Credit a business may claim for up to thirty full-time positions per tax year.

·         The full amount of a tax credit may be carried over for three years.

·         Businesses closing operations in one rural area to locate in another rural area may not claim tax credits under this program.

·         Construction jobs are not eligible for Job Creation Tax Credits.

·         Retail businesses (NAICS 44 and 45) and public utilities are not eligible to claim either the Job Creation or Capital Investment Tax Credits.

The Enterprise Zone Act is found in Utah Code 63N-2-201 through 215. For more information about tax credits available under this program please contact goedruralprograms@utah.gov.

Thank you for participating in the Enterprise Zone Tax Credit and for supporting the growth of rural businesses throughout Utah!