Biz-Friendly Incentives 

Pin It
Favorite

Part of the rationale behind the current income-tax rate was to keep Utah competitive with other states also trying to attract business development, by making rates appealing to business executives looking expand, relocate or start new ventures.

According to the Tax Foundation, a Washington, D.C. thinktank, Utah is ranked 10th for their 2010 business tax climate index. Unfortunately, stiff competition is all around, with Nevada ranked fourth and Wyoming second, although neither state has an income tax thanks to gambling or energy revenues, respectively. Since income tax funds education in this state, it would take a significant policy change to eliminate that revenue stream, so Utah leaders have to look for other ways to make themselves attractive.

Aside from so-called flatter tax rates, these are some of the selling points for Utah as a business-friendly state:

• Workforce: Forbes magazine recently rated Utah third best state for business for 2009, asserting an educated workforce as the state’s biggest draw for business development. The labor pool here is also strong because on net migration and a projected population growth that will keep the state stocked with that smart labor force.

Free Money: Beyond that, there are plenty of other incentives Utah offers businesses—like the money we just give away, for example. In Utah’s conservative politics even mentioning the “B” word (bailout) favorably is the kind of misstep likely to cause a politician to get hit in the head by a rotten tomato. In the interest of business development, however, it’s another story. As of September 2009, Goldman Sachs, one of the companies that received billions of federal bailout money, had been given a total of $47.3 million as part of a tax incentive to expand its business operations in the state.

Resource Taxes: Like Utah, a number of states collect severance taxes on the extraction of oil, coal and natural gas, but in many other states those revenues fund specific services like education. In Utah, those taxes mostly go to the general fund, and the rates are significantly lower than other states. And for the coal industry in Utah, which was ranked the 14th largest in the country by the National Mining Association in 2008, no severance taxes are charged.

Tax Reforms: When the Legislature passed the flatter income tax rates in 2006, they also passed some other tax cuts, including reducing the sales tax on food. However, for businesses, they provided a $20 million cut in “business input taxes,” which are essentially taxes paid at the front-end. This is especially attractive for manufacturers, who pay less for the raw materials they use, as well as businesses purchasing new equipment—such as a one moving into the state. CW

Pin It
Favorite

Speaking of , ,

More by Eric S. Peterson

Latest in News

  • The Life Outside

    Six months after delivering watershed speech, Spencer Cox reflects on equal rights, family and virality.
    • Dec 7, 2016
  • Silent Survivors

    A women-only shelter might be insufficient to address needs of sex workers and the crime that often accompanies them.
    • Nov 30, 2016
  • Gauging HB 348

    Some consider penalty reduction bill a silver bullet for much-needed prison reform.
    • Nov 23, 2016
  • More »

Comments

Subscribe to this thread:

Add a comment

Readers also liked…

  • Growing Pains

    A real-estate deal threatens the end of an era for Pierpont Avenue tenants
    • May 20, 2015
  • Through the Cracks

    A push for reform may offer a lifeline to brain-injury victims behind bars
    • Jun 17, 2015

© 2016 Salt Lake City Weekly

Website powered by Foundation