The Grand County Council voted 6-0 on Dec. 17 to approve a resolution that allows the county to apply for a continuation of its enterprise zone designation. Council member Rory Paxman was not present for the board’s vote.
Utah’s enterprise zone program is designed to benefit small, rural communities where unemployment rates are typically high and wages tend to be lower than they are in the state’s urban areas.
Under the designation, businesses that do not collect sales taxes are eligible to claim a $750 tax credit for each new full-time position they create inside the enterprise zone. If a new employee earns at least 125 percent of the county’s total average monthly wage, the companies can receive a second tax credit for an additional $500. According to wage and employment date compiled by the Utah Department of Workforce Services, Grand County’s average monthly wage for the second quarter of 2013 – the most recent figures available – was $2,332.
“This is a good thing for our businesses in Grand County,” Grand County Council Administrator Ruth Dillon said Dec. 17.
It’s also good for the county, according to Delynn Fielding, who directs the rural development program at the Utah Governor’s Office of Economic Development.
“There’s no downside to the county for doing it,” he said during a brief conference call with the council.
The council’s action came just days after the Moab City Council took similar steps to renew the city’s separate designation as an enterprise zone.
The county designation, which has been in place since 1998, aims to diversify the area’s seasonal and tourism-based economy by attracting businesses that offer better-paying, year-round jobs.
As part of its ongoing recruitment efforts, the county has reached out to businesses in the health information sector, as well as film and video production companies. County officials are also hoping to draw manufacturers of outdoor recreation gear and medical products to the area.
If Fielding’s office approves the county’s request, as expected, the revised designation will extend from the county’s commercial and industrial zones to its rural residential and range/ grazing zones, as well.
Based on figures from 2008, county officials predict that 10 to 20 eligible businesses will claim enterprise zone tax credits. Each of those businesses could create two to three jobs on average, and they could invest somewhere between $2 million to $3 million altogether, according to estimates based on data from 2008.
In return for their investments, those companies will be able to take advantage of additional tax credits for building renovations and other expenses. For instance, eligible businesses may claim a 25 percent tax credit on the first $200,000 they spend on repairs to buildings that have been vacant for at least two years.
Credits are also available for eligible businesses that offer employer-sponsored health insurance programs, as well as those that donate to nonprofit economic development corporations.
Some restrictions may apply, however.
Construction jobs are not eligible for tax credits; nor are retail businesses, public utilities or businesses that move all of their operations from one rural area to another.
Additional information about the enterprise zone program is available online at http://business.utah.gov/programs/incentives/enterprise-zones/.