ENTERPRISE ZONE TAX CREDITS
Businesses operating in state-designated rural Enterprise Zones may be eligible for expanded Utahincome or corporate franchise tax incentives.
The program is operated by the Governor's Office of Economic Development. Go to Governor's Office of Economic Development website for information on the program and to see the Enterprise Zones.
Note: An individual or business may not claim or carry this credit forward into a year that the nonrefundable targeted business income tax credit or nonrefundable recycling market development zone tax credit is claimed.
At least 51 percent of those employed by the enterprise zone business must live in the county of the enterprise zone to qualify for this credit.
Note: Public utilities and retail trade businesses cannot claim this credit. Construction jobs are not eligible for the tax credits in paragraph 1 below.
The following nonrefundable Utahtax credits apply to qualifying enterprise zone businesses:
$750 for each new full-time position filled for at least six months of a tax year.
- An additional $500 if the new position pays at least 125 percent of the county average monthly nonagricultural payroll wage for the respective industry (determined by the Department of Workforce Services). If this information is not available, the job must pay at least 125 percent of the total average monthly nonagricultural payroll wage in the respective enterprise zone county.
- An additional $750 if the new position is in a business that adds value to agricultural commodities through manufacturing or processing.
- An additional $200 for two consecutive years for each new employee insured under an employer-sponsored health insurance program (the employer must pay at least 50 percent of the premium cost for two consecutive years).
- A 50 percent credit up to $100,000 for cash contributions made to a private nonprofit corporation exempt from federal income tax under IRC Section 501(c)(3), whose primary purpose is community and economic development (must be accredited by the Utah Rural Development Council Board of Directors).
- A 25 percent credit of the first $200,000 spent on rehabilitating an enterprise zone building that has been vacant for two years.
- 10 percent of the first $250,000 and 5 percent of the next $1,000,000 of an annual qualifying investment in plant, equipment, or other depreciable property.
A business claiming a credit under paragraph 1 may claim a credit for 30 full-time employee positions or less each taxable year. A business may claim an additional credit for a full-time employee position under paragraph 1 above if:
- The business creates a new full-time employee position;
- The number of full-time employee positions is more than the number previously claimed under paragraph 1; and
- The total number of credits claimed for its current taxable year, including the new full-time employee positions, is 30 or less.
If the credit exceeds the tax owed, the excess amount may be carried forward for a period in the next three taxable years.
Native American tribes may apply for enterprise zone designation within a reservation. To qualify, the land must be in currently recognized boundaries set by the federal government. This includes land removed from the Uintah and Ouray Reservation under Hagenv. Utah(510 U.S. 399 (1994)).
If you are taking enterprise zone credits on your partnership or S corporation return, you must apportion the credits based on your ownership percentage.
For more information, contact:
Governor's Office of Economic Development
324 South State Street, Suite 500
Salt Lake City, UT84111