An Amazon subsidiary will expand its operations in Utah and will create 300 jobs over the next decade.
Amazon Web Services (AWS) made the announcement after being approved for a tax credit incentive by the Governor’s Office of Economic Development (GOED) board at the board’s November meeting.
A company representative said the operations will focus on advanced manufacturing of internal components. GOED documents indicate the company is considering one site in West Valley City and three in Salt Lake City for the $25.3 million project.
Amazon Web Services provides on-demand cloud computing platforms to individuals, companies and governments. One of these services is Amazon Elastic Compute Cloud, which allows users to have a virtual cluster of computers through the Internet. Amazon Web Services is implemented throughout the world at server farms.
The nearly $2.5 million tax credit, applicable over a 10-year period, is tied to the creation of 300 jobs, which will pay an average of $104,000 per year. The project’s new wages are projected at about $304.3 million over five years, and new state tax revenue is projected at nearly $12.5 million during that time.
Like all GOED tax credit incentives, the Amazon Web Services incentive is post-performance, meaning that each year that that company meets the criteria in its contract with the state, it will earn a portion of the total tax rebate.
“We are excited Amazon Web Services has decided to expand in Utah,” Val Hale, GOED’s executive director, said in a prepared statement. “This expansion will bring high-paying, advanced manufacturing jobs to the state and we look forward to the opportunities it will bring.”
“These are high-wage, high-tech jobs that will have a significant multiplier effect on our economy,” said Theresa A. Foxley, president and CEO of the Economic Development Corporation of Utah. “And it’s gratifying for the state to be selected by a company with the means to put this facility anywhere in the world. It is a great validation of our quality talent and pro-business environment.”
Amazon markets AWS to subscribers as a way of obtaining large-scale computing capacity more quickly and cheaply than building an actual physical server farm. Services are billed based on usage, but each service measures usage in varying ways. As of 2017, AWS owned 34 percent of all cloud services, while Microsoft was next at 11 percent, according to Synergy Group.
Fees for AWS cloud computing platforms are based on a combination of usage, the hardware/OS/software/networking features chosen by the subscriber, required availability, redundancy, security and service options.