Breeze Airways is among the companies approved for a tax credit incentive by the Governor’s Office of Economic Opportunity during the past fiscal year. The incentive was tied to a company expansion in Salt Lake County. (Photo courtesy Governor’s Office of Economic Opportunity)
The state’s tax rebate incentive program for corporate recruitment and retention saw its job-creation expectations slip from fiscal 2024 to fiscal 2025. However, the figures from those two years also show a huge jump in capital spending by incentivized companies.
During its most recent July-through-June fiscal year, the Governor’s Office of Economic Opportunity board approved incentives for 18 company projects, with those expansions and relocations expected to result in 3,841 new jobs over time.
The project number is down from the 20 approved in the prior fiscal year. It’s been as high as 27 during fiscal 2022. The jobs total is down from 8,549 from the prior fiscal year but is comparable to 3,630 in fiscal 2023. The highest figure was 20,478 in fiscal 2022.
The 3,841 new-job total includes 622 jobs at projects in rural Utah. The rural projection was 1,262 jobs in fiscal 2024.
The most recent fiscal year projects are expected to result in nearly $6.7 billion in new capital investments, including $556 million in rural Utah. That’s up from $2.43 billion in fiscal 2024 but down from $12.34 billion in fiscal 2023, which was skewed by an $11 billion Texas Instruments project in Lehi.
The average capital expenditure per project rose this past fiscal year compared to typical years because of increased investments in targeted industries such as aerospace and defense and advanced manufacturing.
New state tax revenue from fiscal 2025 projects is estimated to reach $343 million, down from the prior three fiscal years. It was over $900 million in fiscal 2022.
New wages from incentivized jobs are projected to be nearly $3.8 billion over the next two decades, down from $6.23 billion in fiscal 2024. The figure was highest in fiscal 2022, at more than $12.7 billion.
Rural incentive projects in fiscal 2025 are expected to pay wages 55 percent above the county average, with the corresponding figure being 80 percent for urban Utah projects.
Fiscal 2025 projects are expected to produce $343 million in new state tax revenue over time. That’s down from $539.6 million for fiscal 2024 projects. It has been as high as $942.4 million in fiscal 2022.
GOEO administers the Economic Development Tax Increment Financing (EDTIF) and Rural Economic Development Tax Increment Financing (REDTIF) programs. They provide a refundable tax credit for businesses performing and creating high-paying jobs in exchange for a temporary reduction in their marginal tax rates. Temporary reductions are up to 30 percent of new state tax revenues for businesses operating in targeted industries on the Wasatch Front and Washington County and up to 50 percent of new state tax revenues for most projects in rural areas.
New state tax revenue includes Utah sales, corporate income and state payroll withholding taxes during a defined period, usually five to 10 years.
“Utah’s growth trajectory remains strong as we set strategic goals to ensure long-term prosperity,” said Jefferson Moss, GOEO’s executive director. “Our EDTIF and REDTIF tax incentive programs bolster diverse industries, support private-sector job growth, and establish new benchmarks for economic growth that will benefit future generations.”
“Utah continues to attract and retain top-tier companies that strengthen our economy and create jobs,” said Carine Clark, chair of the GOEO board. “Our board’s work is clear: By bringing new infrastructure and diverse industries to our state, we expand opportunities for Utahns to innovate and succeed.”
Created by the Legislature in 2005, the EDTIF program is for companies offering high-wage jobs, providing salaries at least 10 percent above the average county wage and matching the average rural county wage. The REDTIF program allows projects located in rural areas to pay at least the county average wage to qualify for more significant incentives. Three of the 18 approved projects in fiscal 2025 are set in rural counties, featuring 622 jobs and more than $556 million in capital investment.
The tax credit is available to Utah companies expanding and other businesses relocating or establishing additional operations in Utah and is reviewed by the GOEO board. Since its inception, about two-thirds of the program’s tax credits have gone to Utah-based companies.
GOEO does not provide upfront cash incentives. Each year that an incentivized company meets the obligations in its contract with the state, it will qualify to receive a portion of the new, additional state taxes the company paid to the state.