Brice Wallace
The Governor’s Office of Economic Opportunity (Go Utah) is moving ahead with a tax credit incentive for Domo related to an expansion project despite its founder and CEO saying in October that “there’s no chance in hell I was ever going to leave” and that other CEOs of incentivized companies “didn’t need it and they would have stayed anyway.”
Go Utah said last week it had concluded an investigation into Josh James’ statements at the Silicon Slopes Tech Summit to determine if there was a breach of contract between the company and the state.
In January 2021, the American Fork-based cloud-based software company was awarded an economic development tax increment financing (EDTIF) tax credit of up to $23.3 million. The incentive was tied to the creation of up to 2,230 high-paying jobs over 10 years.
Go Utah said last week that the incentive was based on specific contractual performance conditions, which have not yet been performed or satisfied. However, after a review by Go Utah and the state’s assistant attorney general, Go Utah said it “did not find evidence of a breach, and Go Utah has recommended continuing the tax credit incentive as agreed in the contract.”
During the review, Go Utah received from Domo two statements and confidential evidence protected under the Government Records Access and Management Act (GRAMA), the agency said.
Among EDTIF program criteria is competition, meaning that incentivized companies must have considered other locations outside Utah for their expansion projects. But James’ comments in October made it clear that leaving Utah was not an option for Domo, even as he understated the maximum amount of the Domo tax credit.
“I don’t understand why the state gave me over $10 million to stay in Utah,” he said, “I just … it’s incomprehensible to me. There’s no chance in hell I was ever going to leave, but I got $10 million in tax credits from the state of Utah to stay. And I’ll take it. If everyone else is taking it, I’ll take it.”
He also spoke about the tax incentive program more broadly.
“But I’m also happy to give it (the tax credit) back if we can get rid of that law and we can stop paying people from outside the state to come in and hire my employees that I want to try to hire or take them away. I just don’t understand that part of the (state) budget that we use, and every CEO that I know that has taken $10 million-plus from the state, every single one of them was laughing about it because they didn’t need it and they would have stayed anyway.”
James said he understood that the incentives program was established “when the state needed to do it” an attempts to land technology companies and American Express. “I know there was a reason for it. It just don’t think that reason exists anymore — my humble opinion. I wanted to at least plant that seed. I complain about it sometimes and I always get funny looks.”
Despite those statements, Go Utah concluded that evidence provided by Domo established competition. The company is operating in competitive states, has evaluated expansion to California and Washington for the EDTIF contract awarded in January 2021, and is actively assessing corporate growth outside Utah, it said.
“Our office did not find evidence of a breach, and Go Utah has recommended continuing the tax credit incentive as agreed in the contract,” Go Utah said last week.
“We take these matters very seriously,” said Dan Hemmert, Go Utah’s executive director. “I would like to thank those from our team and the Attorney General’s office for their thorough work investigating this situation. Every company has to go through a rigorous process to receive a post-performance tax incentive and meet specific requirements. We remain committed to the state’s corporate retention and recruitment program (known as EDTIF) and to its efficient and effective administration on behalf of the Legislature.”
Go Utah said last fall it would push to better educate the public about its incentives program. Despite for nearly two decades making incentives post-performance — incentivized companies get a portion of their incentives only after creating promised high-paying jobs or other contracted criteria — many in the public believe that Go Utah awards companies with upfront cash. And few companies actually meet the criteria to receive the maximum tax credit amount, Go Utah has said.