By Anne Cosgrove
From the March/April 2023 Issue
Under Governor Spencer Cox’s direction, the Governor’s Office of Economic Opportunity (Go Utah) provides resources and support for business creation, growth, and recruitment. It also drives increased tourism and film production in Utah. As stewards of Utah’s economy and quality of life, the Economic Opportunity office utilizes federal, state, and private sector resources to administer programs in areas demonstrating the highest potential for economic development and the most opportunity for Utahns.
Examples include the office’s Business Services and Corporate Retention and Recruitment teams that help Utah businesses grow. The office’s International Trade and Diplomacy team supports the expansion of business into foreign markets. The Office of Economic Opportunity includes the Utah Office of Tourism and the Utah Film Commission. The tourism office promotes Utah as a world-class destination for domestic and international visitors. And the Film Commission supports Utah’s robust film industry and manages motion picture incentives.
“We believe in small government and free markets, and those principles guide our support for innovation with minimal regulation,” said Gov. Cox, when asked about the guiding principle for Utah’s business climate.
“We recently recruited successful businessman Brad Bonham to become the state’s first entrepreneur-in-residence, and we’re excited to have his expertise on the team. Utah has earned a reputation as ‘the start-up state’, and we want to continue to foster that culture of entrepreneurship,” the governor added.
Tax Incentives Support State’s Growth
The Go Utah office is focused on five strategic targeted industries that work together to diversify and enhance the state’s economy. These five industries are: advanced manufacturing, aerospace & defense, financial services, life sciences & healthcare, and software & IT.
In 2005, The Utah Legislature created the Economic Development Tax Increment Finance (EDTIF) corporate incentive program. As the state’s needs and economy continue to evolve, the Legislature fine-tunes the EDTIF program to maintain a robust environment for economic development. New guidelines from the 2022 legislative session focus on creating jobs while recognizing the unique challenges in the state’s urban and rural areas.
From July 2021 to June 2022, 27 companies participated in the state’s EDTIF program and are collectively projected to create 20,478 new jobs, make $1,972,878,630 in new capital investments, pay more than $942,401,100 in new state tax revenue, and provide $12,734,493,371 in new state wages over the next 20 years.
The EDTIF tax 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 defined period (typically 5 to 10 years). The EDTIF program is for companies offering high-wage jobs—paying at least 110% of the average county wage. By design, the program has a multiplier effect, creating additional jobs that support corporate expansion across Utah’s diverse economy. The tax credit is available to Utah companies expanding and other businesses relocating or establishing additional operations in the state.
New in 2022 was the Rural Economic Development Tax Increment Financing (REDTIF) tax credit program. REDTIF refers to rural modifications to the EDTIF program that allow projects located in rural areas to qualify for more significant incentives. With this tool, the state has seen more economic opportunities flow to its more rural communities. For example, the projected capital investment in rural Utah from announced projects in FY22 amounts to more than $1.2 billion, more than double the capital investment rural Utah has seen from state incentives in the past five years combined.
Broadband infrastructure is also a focus for Utah. In December 2022, the Utah Broadband Center, an initiative of Go Utah, was awarded $10 million in federal funding through the Coronavirus Capital Projects Fund (CPF) as part of the American Rescue Plan. The Utah Broadband Center has awarded five rural recipients: Box Elder County, Croydon, Millard County, West Mountain, and Montezuma Creek in the Navajo Nation in San Juan County.
Businesses Choose Utah
With many moving parts to grow Utah, Gov. Cox highlights, “The biggest attractions for investment in Utah are our culture, world-class business climate, entrepreneurial spirit, and an exceptional workforce. For example, Texas Instruments recently announced its plans to add 800 new, high-tech jobs and invest $11 billion in Utah. This investment is the largest economic investment in Utah’s history.”
In February, the Utah Governor’s Office of Economic Opportunity awarded Texas Instruments Incorporated (TI) a post-performance tax reduction for its new semiconductor factory in Lehi. The corporate incentive is part of the state’s EDTIF program.
“Companies like Texas Instruments continue to invest in Utah because of our world-class business climate and exceptional workforce,” said Gov. Cox when the project was announced. “TI’s new semiconductor factory will solidify Utah as a global semiconductor manufacturing hub for generations to come.”
TI may receive up to 30% of the additional state taxes it will pay over the 20-year life of the agreement in the form of an EDTIF tax credit (U.C.A. 63N-2-106(2)). Each year TI meets the criteria in its contract with the state, it will qualify for a portion of the total tax credit.
Another February announcement came from Claire Manufacturing, Inc. (Dandy), with Go Utah awarding a temporary, marginal tax reduction for its expansion in the state. The post-performance corporate incentive is part of the Legislature’s EDTIF program.
“Companies like Texas Instruments continue to invest in Utah because of our world-class business climate and exceptional workforce.”
— Governor Spencer J. Cox
As part of the agreement, Dandy plans to bring up to 200 new high-paying jobs in Utah during the next eight years.
Claire Manufacturing is a newly formed subsidiary of Zima International, Inc. dba Dandy. The company is focused on creating best-in-class dental restorations at a brand-new dental lab manufacturing facility. The facility will be the first-of-its-kind dental lab, introducing the newest technologies and advanced materials.
“The more time I’ve been able to spend in local and state communities of Utah, the more I’m convinced that Utah is the new national epicenter for dental innovation and industry,” said Carter Chang, VP of Strategy & Operations at Dandy. “Dandy is proud to be a part of this movement and to have found a home in Utah.”
“This is an exciting win for Lehi that will bring high-tech production jobs to the center of Utah’s tech sector,” said Scott Cuthbertson, president and CEO of the Economic Development Corporation of Utah (EDCUtah). “Dandy has found a great home in Silicon Slopes and will add to the economic diversity of the region.”