Sanpete businesses in unincorporated areas offered state tax breaks

Sanpete businesses in unincorporated

areas offered state tax breaks


By Robert Stevens

Managing editor

Nov. 30, 2017


Businesses located in unincorporated areas of Sanpete County may be able to save big on their taxes this year,

A modification was made earlier this month which classifies all unincorporated areas in the county as Enterprise Zones—areas that allow qualifying businesses to claim hefty tax credits.

“The Sanpete County Commission recently modified the Enterprise Zone designation to include all unincorporated areas of Sanpete County,” Christensen says. “This means that farmers and businesses in unincorporated areas will now be able to take advantage of generous tax credits on their State Income taxes—starting in 2017.”

According to Kevin Christensen, director of Sanpete County Economic Development, the new rule change came about after farmers, or accountants representing them, reached out to him to ask if their unincorporated agribusinesses qualified for the Enterprise Zone tax credits.

Christensen brought the matter before the Sanpete County Commission, and on Monday, Nov. 6, the commission made the change to allow the county’s qualifying far-flung business owners to take advantage of the tax credits on their Utah State tax returns.

According to the Enterprise Zone tax credit guidelines laid out at http://business.utah.gov/programs/rural/enterprise-zone-tax-credits/, there are several different classifications of Enterprise Zone tax credits that qualifying businessmen can apply for.


Job creation tax credits

Job creation tax credits offer a $750 Utah tax credit for each new fulltime position filled for at least six months during the tax year.

Several additional job creation tax credits augment the primary credit.

An additional $500 tax credit is available if the new position pays at least 125 percent of the county average monthly wage for the respective industry (determined by the Utah Department of Employment Security).

An additional $750 tax credit is available if the new position is in a business which adds value to agricultural commodities through manufacturing or processing.

An additional $200 tax credit, for two consecutive years, is available for each new position insured under an employer-sponsored health insurance program if the employer pays at least 50 percent of the premium.


Other tax credits

A cash contribution to a 501(c)(3) private nonprofit engaged primarily in community and economic development, and accredited by the Utah Rural Development Council, can net qualifying businesses a 50-percent credit (not to exceed $100,000).

Also available is a credit of 25 percent spent on the first $200,000 toward rehabilitating a building which has been vacant for at least two years, and which is located within an Enterprise Zone.

An annual investment tax credit is available for 10 percent of the first $250,000 in investment, and 5 percent of the next $1 million qualifying investment in plant, equipment or other depreciable property.

Christensen says the credits don’t just magically appear on your tax returns though—some initial effort is involved. All Enterprise Zone tax credits must be applied for by qualifying businesspersons no less than four weeks before filing their tax returns.

No pre-file application means no tax credit, says Christensen.

Christensen said the program is enacted by the governing entity in the area the business is located. The county commission made this change because unincorporated areas fall under their jurisdiction.

Incorporated areas of the county, such as Ephraim City or other municipalities, may or may not classify a portion or all of their territory as an Enterprise Zone.

Fairview, for example, declined to renew their once-existent Enterprise Zone classification (eventual renewal by the governing entity is required for all Enterprise Zones)—possibly because because retail businesses do not qualify for Enterprise Zone tax credits, and much of Fairview’s businesses are retail, says Christensen.

For those with questions about the Enterprise Zone tax credit system, Christensen says business owners, or their tax accountants, can call him for more info at 835-4321.