November 20, 2024
Utah is known for its thriving economy and supportive business environment, with numerous resources from the public and private sectors to support growth.
Initially authorized in 2005, the Utah Legislature created the Economic Development Tax Increment Financing (EDTIF) program, a post-performance state tax initiative. While other states offer incentives upfront, Utah differs in a key way by providing awards after performance benchmarks are met. EDTIF is also notable in its aim to promote responsibility with a requirement for awarded companies to serve and strengthen Utah communities.
“EDTIF is a tool that the Legislature has provided allowing us to compete with other states in the areas of industry we value most,” said Jim Grover, managing director of economic growth for the Governor’s Office of Economic Opportunity (GOEO). “We strive to use it as wisely as possible by protecting taxpayers’ dollars through our post-performance model.”
So long as a company operates in one of GOEO’s five targeted industries — advanced manufacturing, aerospace and defense, financial services, life sciences and healthcare, and software and IT — and meets criteria such as creating new, high-paying jobs, it could receive a refund of up to 30% of the new state taxes it paid for up to 20 years. Since its inception, approximately two-thirds of the companies participating in the program are based in Utah.
To begin the process, a company must first meet with and receive an application from GOEO’s business recruitment and expansion team. An incentives committee reviews these applications, which assesses the company’s industry competitiveness and alignment with state goals.
“EDTIF is a lengthy endeavor, which can take two or three months,” Grover said. The final step in applying is to appear at a public board meeting, where a contract may be awarded upon agreeing that the business will submit reports annually.
The initiative was later expanded to better cater to companies operating in rural settings. Like EDTIF, the Rural Economic Development Tax Increment Financing (REDTIF) program operates under a strict post-performance model. A key difference is that companies can be refunded up to 50% on taxes and operate outside the five targeted industries.
Utah’s focus on post-performance tax breaks ensures accountability and a clear return on investment for taxpayers. These programs reflect the state’s commitment to strategic economic development, fostering growth in targeted industries and rural areas while maintaining fiscal responsibility.
Learn more about EDTIF/REDTIF at the Governor’s Office of Economic Opportunity website.
The information in this article is current as of the publishing date and is intended for informational purposes only. This article does not, and is not intended to, constitute legal, tax, or business advice. Any resources and organizations mentioned, unless an entity of or a partner of the state of Utah, are not formally endorsed by the Startup State Initiative or state of Utah.