Enterprise Zone Tax Credits
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Description
A tax credit against individual income tax or corporate franchise and income taxes for activities in an enterprise zone is available. It consists of 25% of the first $200,000 spent on rehabilitating a building, which has been vacant for at least two years. As part of this provision, there is an investment tax credit of 10% of the first $250,000 in investment and 5% of the next $1,000,000 qualifying investment in plant, equipment or other depreciable propery. Other credits are available for new employment created from these efforts.

How to Use This Tool
Check with your tax advisor/Utah State Tax Commission with questions about individual situations before making any business decisions regarding this Tax Credit.

Limitations
These tax credits are not available for retail functions but are available for agriculture, forest and fisheries, mining, utilities, construction, manufacturing, wholesale trade, transportation, warehousing, information, finance, insurance and many other eligible activities.

Qualified investments must meet the following conditions:

  • The plant, equipment, or depreciable property for which the credit is being taken must be located within the boundaries of the enterprise zone.

  • An investment in plan, equipment or other depreciable property does not qualify for the investment tax credit until the manufacturing concern is operation within the enterprise zone.

  • A purchase of an already existing manufacturing concern located in an enterprise zone does not qualify as an investment in plan, equipment, or other depreciable property.

A qualifying investment may include:

a)   The investment in storage facilities to store manufactured goods, raw materials or other items used in the manufacturing process is the storage facility is located in the same enterprise zone and the manufacturing business for which the storage facility is being used.

The replacement of existing assets does not qualify for the investment tax credit.

Contacts
To see the official Utah Code (9-2-413) click on http://www.le.state.ut.us/~code/TITLE09/htm/09_02021.htm

For more information on this tax credit call Kim Ferrell - Utah Tax Commission (801) 297-4634