Key Takeaways
- Utah is pro-business: Flat 4.55% income tax, low property taxes, no gross receipts tax, and strong incentives make it one of the most business-friendly states in the U.S.
- Targeted tax credits fuel growth: From the Economic Development Tax Increment Financing (EDTIF) and R&D credits to clean energy, enterprise zone, and film production incentives, Utah offers credits tailored to a wide range of industries.
- Common mistakes cost money: Businesses often miss out due to poor record-keeping, late applications, or assuming credits only apply to large companies.
- Expert guidance maximizes benefits: A skilled CPA ensures compliance, identifies industry-specific opportunities, and aligns tax credit strategies with long-term growth.
Utah was named the Best State in America for the third straight year in 2025 and it’s easy to see why. The state offers numerous credits aimed at growth. From the Economic Development Tax Increment Financing, to the Research Activities Credit, Enterprise Zone credits, and even a Motion Picture refundable credit.
Yet so many businesses either underclaim or miss out totally on Utah state tax credits. After all, they evolve with legislative sessions, and some require advance approval, performance verification, or nuanced calculations. Together, this means that your business might be missing out. So in this blog, we’ll walk you through how to ensure that your company makes the most of Utah state tax credits, to put money back in your pocket.
How Utah State Tax Credits Can Help Your Business
In a nutshell, Utah has a strong economy and pro-growth policies. At the same time, the state’s economy is impressively diversified, spanning tourism, mining, agriculture, manufacturing, IT, finance, and government services, meaning it’s ideal for businesses from a variety of industries.
However, there is one industry in particular that’s starting to flourish in the state, and that’s tech. The “Silicon Slopes” region from Salt Lake City to Provo hosts over 1,000 tech firms, including Google, PayPal, Adobe, and others. The growth in this industry has been fueled by favorable business policies, streamlined licensing, and incentives.
Utah also offers a low overall tax burden. In fact, both individual and corporate income taxes are at a flat rate of 4.55%. On top of this, the state has one of the lowest effective property rates in the country. Even better, Utah avoids capital stock and gross receipts taxes, has no throwback rule, and supports first-year expensing of capital investments. Overall, this makes it a very attractive option for many businesses looking to make the most of their tax strategies.
But one of the most important factors to consider is Utah’s state tax credit system. These are targeted incentives to attract and retain businesses.
Key Utah State Tax Credits for Business Growth
Utah has a number of state-specific tax credits for businesses in a number of industries. These include:
- The Economic Development Tax Increment Financing (EDTIF) Tax Credit. This is a refundable credit for companies relocating or expanding in Utah. It requires that your business create jobs, and make capital investment in the state.
- The Research Activities Tax Credit is modeled after the federal R&D credit, to incentivize innovation and product development.
- The Renewable Energy Systems Tax Credit, which covers solar, wind, geothermal, and other qualifying systems, and encourages investment in clean energy for businesses.
- Targeted Industry Credits in aerospace & defense, life sciences, IT, financial services, and outdoor products.
- The Film Production Tax Credit. This is available for media-related businesses engaged in production and post-production in the state.
Comparison of Utah state tax credits
The table below summarizes these credits, with details on their purpose and key features.
| Tax Credit / Incentive | Purpose | Key Features | Requirements |
| EDTIF | To attract or expand businesses | A refundable, post-performance credit for businesses relocating to or expanding in Utah. It’s based on a share of up to 30% of new state tax revenues generated (like sales tax, corporate income, and payroll withholding) over typically 5 to 10 years. | Must create high-paying jobs, with wages at least 110% of the county average. Projects often must be located in an Economic Development Zone. Eligible businesses must operate in manufacturing, aerospace and defense, financial services, life sciences and healthcare, or software/IT. |
| Research Activities Credit | Encourages R&D | Tiered rates (of 5 to 7.5%), carryforward for some components. | Similar to federal, as well as other state R&D requirements. |
| RESTC (Renewable Energy Systems) | Promotes clean energy installation | 10% refundable credit (up to $50K) for installations in commercial buildings. | The application process involves a $15 fee and OED certification via Form TC-40E. Credit can be carried forward up to four years. |
| Targeted Industry Credits | Available to external investors in qualifying tech or life science companies in Utah. | Up to 35% of investment, spread over three years (10%, 10%, then 15%), with annual caps (around $350,000). | Minimum investment of $25,000, and investor ownership must stay below 30%. |
| Enterprise Zone Credits | Fosters growth in key sectors and zones. | Up to $750 per job, with an additional $500 per job if wages meet or exceed 125% of the county average. Credits are non-refundable, but carry-forward is allowed (up to 3 years). | Available when locating in designated zones and creating jobs. |
| Film Production Incentives | Supports media production and the local economy. | 20–25% post-performance rebates or refundable credit on qualifying in-state expenditures. | Minimum spend requirement of $500,000, but budgets of $100–$500K are eligible for the Community Film Incentive Program (CFIP) with 20% cash rebate, especially if the project has 85% Utah resident key creatives and local cast/crew. |
Common Mistakes That Cause Businesses to Miss Out
With so many Utah state tax credits, why do a lot of businesses not make use of them? There are a few reasons. These include:
- Lack of awareness: Many businesses simply don’t know what’s available. Both small and mid-sized businesses commonly overlook credits.
- Not tracking qualifying expenses properly: Accurate and well-organized record-keeping is essential to support claims for tax credits. Without proper documentation, like payroll data, R&D spend, or capital investments, your business risks missing out.
- Waiting too long to apply or failing compliance requirements: Many of the Utah state tax credits require applications in advance, along with annual performance verification. So missing deadlines or failing to meet benchmarks can cost you dearly.
- Assuming credits don’t apply to smaller businesses: Many small or mid-sized businesses incorrectly assume that state credits are only available for large companies. But even if a company is small or doesn’t owe income tax, it may still qualify, and perhaps even carry forward credits to future years.
How We Can Help You Maximize Utah State Tax Credits
When it comes to state tax credits, having expert help is essential. A knowledgeable accountant or CPA will help your business avoid making the mistakes above that could cost you to miss out. But their expertise goes beyond just keeping you informed of available credits.
At Fusion CPA, we can help you identify credits tailored to your industry. We’re well-versed in the nuanced landscape of state-specific tax credits, including those unique to Utah. We can help you evaluate your business profile and pinpoint the applicable programs, so that you don’t have to rely on guesswork.
Our team can also help you ensure your documents are in order for full compliance with Utah state tax credits. Precision in compiling, organizing, and presenting supporting data is vital for successful incentive claims, and especially for performance-based programs that require job creation proof, wage thresholds, capital investment forms, or annual filings.
And of course, we can assist with proactive, forward-looking planning aligned with your growth strategies. Remember that effective accountants are also strategic partners. When we handle your tax strategy, we can help you ensure that your investment decisions are timed to eligibility requirements and maximize long-term financial benefits.
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This blog does not provide legal, accounting, tax, or other professional advice. We base articles on current or proposed tax rules at the time of writing and do not update older posts for tax rule changes. We expressly disclaim all liability regarding actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.