2023 Utah Code › Title 63N - Economic Opportunity Act › Chapter 2 - Tax Credit Incentives for Economic Development › Part 2 - Enterprise Zone Act › Section 213 - State tax credits.

Affected by 63I-1-263 on 7/1/2028
Effective 7/1/2021
63N-2-213.
State tax credits.
(1) The office shall certify a business entity's eligibility for a tax credit described in this section.
(2) A business entity seeking to receive a tax credit as provided in this section shall provide the office with:
(a) an application for a tax credit certificate in a form approved by the office, including a certification, by an officer of the business entity, of a signature on the application; and
(b) documentation that demonstrates the business entity has met the requirements to receive the tax credit.
(3) If, after review of an application and documentation provided by a business entity as described in Subsection (2), the office determines that the application and documentation are inadequate to provide a reasonable justification for authorizing the tax credit, the office shall:
(a) deny the tax credit; or
(b) inform the business entity that the application or documentation was inadequate and ask the business entity to submit additional documentation.
(4) If, after review of an application and documentation provided by a business entity as described in Subsection (2), the office determines that the application and documentation provide reasonable justification for authorizing a tax credit, the office shall:
(a) determine the amount of the tax credit to be granted to the business entity;
(b) issue a tax credit certificate to the business entity; and
(c) provide a digital record of the tax credit certificate to the State Tax Commission.
(5) A business entity may not claim a tax credit under this section unless the business entity has a tax credit certificate issued by the office.
(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the office shall make rules describing:
(a) the form and content of an application for a tax credit under this section;
(b) the documentation requirements for a business entity to receive a tax credit certificate under this section; and
(c) administration of the program, including relevant timelines and deadlines.
(7) Subject to the limitations of Subsections (8) through (10), and if the requirements of this part are met, the following nonrefundable tax credits against a tax under Title 59, Chapter 7, Corporate Franchise and Income Taxes, or Title 59, Chapter 10, Individual Income Tax Act, are applicable in an enterprise zone:
(a) a tax credit of $750 may be claimed by a business entity for each new full-time employee position created within the enterprise zone;
(b) an additional $500 tax credit may be claimed if the new full-time employee position created within the enterprise zone pays at least 125% of:
(i) the county average monthly nonagricultural payroll wage for the respective industry as determined by the Department of Workforce Services; or
(ii) if the county average monthly nonagricultural payroll wage is not available for the respective industry, the total average monthly nonagricultural payroll wage in the respective county where the enterprise zone is located;
(c) an additional tax credit of $750 may be claimed if the new full-time employee position created within the enterprise zone is in a business entity that adds value to agricultural commodities through manufacturing or processing;
(d) an additional tax credit of $200 may be claimed for each new full-time employee position created within the enterprise zone that is filled by an employee who is insured under an employer-sponsored health insurance program if the employer pays at least 50% of the premium cost for the year for which the credit is claimed;
(e) a tax credit of 25% of the first $200,000 spent on rehabilitating a building in the enterprise zone that has been vacant for two years or more, including that the building has had or contained no occupants, tenants, furniture, or personal property for two years or more, in the time period immediately before the rehabilitation; and
(f) an annual investment tax credit may be claimed in an amount equal to 5% of the first $750,000 qualifying investment in plant, equipment, or other depreciable property.
(8)
(a) Subject to the limitations of Subsection (8)(b), a business entity claiming a tax credit under Subsections (7)(a) through (d) may claim the tax credit for no more than 30 full-time employee positions in a taxable year.
(b) A business entity that received a tax credit for one or more new full-time employee positions under Subsections (7)(a) through (d) in a prior taxable year may claim a tax credit for a new full-time employee position in a subsequent taxable year under Subsections (7)(a) through (d) if:
(i) the business entity has created a new full-time position within the enterprise zone; and
(ii) the total number of employee positions at the business entity at any point during the tax year for which the tax credit is being claimed is greater than the highest number of employee positions that existed at the business entity in the previous taxable year.
(c) Construction jobs are not eligible for the tax credits under Subsections (7)(a) through (d).
(9) If the amount of a tax credit under this section exceeds a business entity's tax liability under this chapter for a taxable year, the business entity may carry forward the amount of the tax credit exceeding the liability for a period that does not exceed the next three taxable years.
(10) Tax credits under Subsections (7)(a) through (f) may not be claimed by a business entity primarily engaged in retail trade, residential rental property, or by a public utilities business.
(11) A business entity that has no employees:
(a) may not claim tax credits under Subsections (7)(a) through (d); and
(b) may claim tax credits under Subsections (7)(e) through (f).
(12)
(a) A business entity may not claim or carry forward a tax credit available under this part for a taxable year during which the business entity has claimed the targeted business income tax credit available under Section 63N-2-304.
(b) A business entity may not claim or carry forward a tax credit available under this section for a taxable year during which the business entity claims or carries forward a tax credit available under Section 59-7-610 or 59-10-1007.
(13)
(a) On or before November 30, 2018, and every three years after 2018, the Revenue and Taxation Interim Committee shall review the tax credits provided by this section and make recommendations concerning whether the tax credits should be continued, modified, or repealed.
(b) In conducting the review required by Subsection (13)(a), the Revenue and Taxation Interim Committee shall:
(i) schedule time on at least one committee agenda to conduct the review;
(ii) invite state agencies, individuals, and organizations concerned with the credits under review to provide testimony;
(iii) ensure that the recommendations described in this section include an evaluation of:
(A) the cost of the tax credits to the state;
(B) the purpose and effectiveness of the tax credits; and
(C) the extent to which the state benefits from the tax credits; and
(iv) undertake other review efforts as determined by the chairs of the Revenue and Taxation Interim Committee.
Amended by Chapter 282, 2021 General Session