Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since April 1, 2019, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R357. Governor, Economic Development.
Rule R357-15. Enterprise Zone Tax Credit.
As in effect on April 1, 2019
Table of Contents
- R357-15-1. Authority.
- R357-15-2. Definitions.
- R357-15-3. Application Form and Content.
- R357-15-4. Required Documentation and Verification Information.
- R357-15-5. Application Review and Authorization Process for an Enterprise Zone Tax Credit.
- R357-15-6. Appeal of Application Denial.
- Date of Enactment or Last Substantive Amendment
- Authorizing, Implemented, or Interpreted Law
(1) Subsection 63N-2-213(6) requires the office to make rules establishing the form and content of an application for an Enterprise Zone tax credit, the documentation required to receive an Enterprise Zone tax credit, and the administration of the program, including relevant timelines and deadlines.
(1) The definitions below are in addition to or serve to clarify the definitions found in Utah Code Section 63N-2-201 Utah Code Section 59-7-614.10, Section 59-10-1036, and Section 63N-2-202.
(2) "Baseline" means: The highest total number of employees employed by the applicant for the previous three years. This number will be the baseline to determine all new incremental full-time employee positions
(3) "Qualifying investment in plant, equipment, or other depreciable property" means an investment in most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment that qualifies for depreciation under the Internal Revenue Service's Form 4562 in the amount of acquisition cost less trade-in allowance.
(4) "Software purchases" means tangible physical property, cloud services, or software as a service.
(5) "Qualified business use vehicle" means vehicles registered in the name of the business entity and used more than 50% of the time for the business entity.
(6) "Payment documentation" means a bank statement, cleared check, loan, or financing agreement which identifies the business entity, date and amount paid.
(7) "Purchase documentation" means bill of sale, contract of sale, receipt, invoice, or property tax notice which identifies the business entity and date issued.
(8) "Value-added business entity" means a company that creates a change in the physical state or form of a product in a manner that enhances its value, thus expanding the customer base of the product. Examples include milling wheat into flour or making strawberries into jam.
(1) An application form will be provided by the Office and will contain the following content:
(a) General submission instructions;
(b) Types of tax credits available to be claimed;
(c) Criteria for qualification for each tax credit;
(d) Any required deadlines and relevant timelines; and
(e) All required documents and information necessary for verification and approval of the application.
(2) The application shall be created in an electronic format available to the public at business.utah.gov
(3) The application shall also be available in paper format for any person or entity that requests a paper copy via mail or telephone.
(1) To claim any of the tax credits available under 63N-2-201 et. seq. the following basic information must be provided to the Office.
(a) Business or Individual's name that is claiming a tax credit on a Utah Tax filing submission;
(b) A contact name, email, phone number, mailing address and relevant title(s);
(c) The physical address where the business or individual is located including a screenshot of the address pinpoint within the Enterprise Zone as found on locate.utah.gov.
i. A tax credit shall not be issued if the only connection to an enterprise zone is a P.O. Box;
(d) The business or individual's tax identification number whether a federally provided Employer Identification Number (EIN) or a Social Security Number (SSN); and
(e) Additional information as required in the Application.
(2) To qualify for any of the Employment tax credits pursuant to Subsections 63N-2-213(7)(a)-(d) the following documentation and information is required:
(a) A current total of all full time employees including the total of employees as reported to the Department of Workforce Services for the last three years.
(b) The number of New Incremental Employee Positions created above the baseline.
i. For each New Incremental Employee Position above the baseline the applicant must provide:
1. Employee Name;
2. Employee Hourly Wage and/or Annual Salary;
3. Employee Average Hours worked per week;
4. Employee Hire date;
5. If applicable, proof of employer-sponsored health insurance program if the employer pays at least 50% of the premium cost;
6. If applicable, evidence that the business entity adds value to agricultural commodities through manufacturing or processing.
a. List of sample products or processes.
7. Other documentation requested by the Office on the tax credit application.
(3) To qualify for the private capital investment tax credit under Subsections 63N-2-213(7)(e) and (f) the following documentation and information is required:
(a) If the private capital investment is for the rehabilitation of a building in an Enterprise Zone the applicant must provide:
i. The rehabilitated building's physical address
ii. Documents showing the current owner such as the deed or mortgage documents;
iii. The date the building was last occupied;
iv. A current occupancy permit or certificate;
v. Receipts and paid invoices of all rehabilitation expenses totaling the amount the tax credit is calculated from; and
1. The Office may request further documentation to verify receipts and paid invoices including accompanying bank statements.
vi. Any other documentation requested by the Office including a sworn affidavit confirming the rehabilitation costs from the owner of the building if applicant is not the owner of the building.
(b) If the private capital investment is a qualifying investment in plant, equipment, or other depreciable property in an Enterprise Zone the applicant must provide:
i. receipts and/or loan documentation showing the entire purchase price and amount paid by the applicant;
ii. an itemized list of qualified investments being claimed for the credit on a template provided by the office;
iii. purchase documentation and one or more forms of payment documentation validating item is paid in entirety for each item equal or greater than an amount established by the office;
iv. property and real estate transactions also require the contract of sale, settlement statement, property tax notice, and financing agreement; and
v. qualified business use vehicle purchases shall also include Utah Bill of Sale TC-843, business percentage use and financing agreement or payment documentation.
(1) The Office shall review all submitted applications within a reasonable amount of time and approve or deny the application
(a) The Office shall review all tax credits claimed and documentation provided.
(b) The Office may request additional documentation or information if the Office determines that further verification is required.
i. Failure to comply with a request for additional documentation may result in a denial of the application.
(2) The Office will issue tax credit certificates for all tax credits for which an applicant has applied, qualified and been approved by the Office.
(a) This Office may issue a partial approval if only parts of the application are determined to qualify.
(3) The Office must provide written notice that includes its reasoning when denying any or a portion of a tax credit application.
(4) If approved in whole or in part, the Office shall provide any necessary documents and instructions, approved by the Utah Tax Commission, for claiming the tax credit.
(5) When a business entity is seeking to receive a tax credit for the purchase of a vehicle, in conformity with Subsection 63N-2-213(7)(f), the office shall not grant a tax credit for the trade-in value of a vehicle that the business entity traded into the purchase of the vehicle for which the tax credit is being sought.
(6) The Office may deny Qualified Investments being claimed as software purchases that are cloud services or software as a service.
(7) The Office may deny claims for applications with Qualified Investments purchased more than three calendar years ago.
(8) The Office may deny claims for Qualified Investments purchased from another entity with the same ownership.
(1) A hearing contesting the denial of an application in whole or in part of an Enterprise Zone Tax Credit is designated as informal hearings.
enterprise zones, tax credits
December 24, 2018
For questions regarding the content or application of rules under Title R357, please contact the promulgating agency (Governor, Economic Development). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.