Utah's Tax Rebate Program Brought In Thousands Of Jobs In 2019
20 companies took advantage of the state’s 2019 tax rebate program. They’re bringing nearly 10,000 high-paying and over $300 million in state revenue with them over the next 15 years, according to the Governor’s Office of Economic Development (GOED).
They were also offered nearly $70 million in tax incentives through a program called Economic Development Tax Increment Financing.
“What we're trying to do is bring in companies that pay exceptional wages,” said Val Hale, executive director at GOED. “So we feel pretty good about the way our program has increased wages here in the state as well us to help diversify the economy.”
Hale said the EDTIF program not only helped bring in new companies, but helped others expand, such as the Provo-based Qualtrics, which is doubling the size of its headquarters and expected to deliver more than 1,000 jobs over the next five years.
But critics nationwide question whether tax incentives designed to lure businesses come at the expense of the communities they are supposed to help, from the controversial and ultimately failed attempt to lure Amazon’s second headquarters to New York City to concerns that corporations — rather than the average American — are seeing the most gains under the Trump tax cuts.
Hale said what is happening in Utah is different though. While the state offers incentives, it ensures companies make good on their promises.
“You have to be careful,” Hale said. “Utah has a very conservative program. It's post performance, so companies get nothing back unless they have already put into the economy.”
In a given year, about 60% of the companies will qualify for the incentive that they've been offered, Hale said.
Rusty Cannon, vice president of the Utah Taxpayers Association, said that while it’s good policy to try to attract businesses and jobs, playing favorites is not the way to do it.
“We believe that the best use of capital for a city or county or the state is to create a good environment for all businesses, and not just hand out special deals for those that you want to attract,” he said.
Cannon said incentives aren’t fair to the businesses already in the state. Plus, incentives are likely only a small part of why the companies chose to settle in Utah. The overall business environment — low taxes and a strong workforce — is the most important thing.
”When companies look to come to Utah, they typically ask two questions: What is your tax rate? And do you have the employees that I need?” Cannon said. “And if you don't have good answers for those, they typically look elsewhere.”