Commercial Tax Credits
Utah offers a suite of tax credits for commercial projects that span significant infrastructure projects, as well as renewable energy, oil & gas, and alternative energy installations.
- High Cost Infrastructure
- OTHER RENEWABLES
- ALTERNATIVE ENERGY DEVELOPMENT
- WELL RECOMPLETION OR WORKOVER
The High Cost Infrastructure Tax Credit (HCITC) supports significant infrastructure investments in the state, supporting cost‐effective, and sustainable delivery of Utah’s commodities to domestic and global markets. Standard qualifying projects that meet the infrastructure investment requirements are eligible to receive a nonrefundable tax credit of 30 percent of qualifying infrastructure-related state revenue generated annually, up to 50 percent of the cost of the infrastructure investment.
The HCITC is available to businesses whose Utah-based projects:
Expand or create new industrial, mining, manufacturing, or agricultural activity are comprised of at least 10 percent (or $10,000,000) of infrastructure costs Generate new state revenues that are directly attributable to new infrastructure investment.
Qualifying investments in infrastructure may include:
Energy delivery systems
Water delivery systems
Electric transmission railroads, and other linear infrastructure.
Tier 3 fuel projects at Utah's refineries may also qualify.
How it Works:
Qualifying infrastructure investment that is certified by OED and approved by the Board will generally receive a non-refundable tax credit of 30 percent of qualifying infrastructure-related state revenue generated during a qualifying tax period. The total tax credit authorized for a project will be 50 percent of the cost of the infrastructure investment. The tax credit will generally only apply to new state revenues that are directly attributable to new infrastructure investment.
What is the HCITC application process?
The application for the HCITC consists of four steps:
1 - Interested companies must submit a pre-application. After receiving approval for the pre-application, the applicant must complete at least one meeting with OED’s Energy Infrastructure Incentives Manager to review project details.
2 - If the Incentives Manager finds that all eligibility requirements and qualifications are satisfied, the applicant will be invited to submit an application. Upon submission, the application will be reviewed again by the Incentives Manager, who will schedule a second meeting with the applicant to discuss further project details.
3 - If approved, the application will be included in the next Utah Energy Infrastructure Authority (UEIA) Board meeting for consideration.
4 - In the case the applicant receives a favorable recommendation from the UEIA Board, the Governor’s Office of Energy Development will create a tax credit authorization letter whereby the applicant and the office will enter into an agreement authorizing a post-performance, non-refundable tax credit calculated in accordance with Utah Code 63M-4-603 and Utah Administrative Rules R362-4-5.
Resources and Application
For additional information related to the HCITC, please find the application, detailed one pager, and additional resources you may need:
HCITC Fact Sheet Read More
HCITC Application See Application
Application Fee HCTIC
Starting August 15, 2018 in accordance with Utah Code 63M-4-401, the Governor’s Office of Energy Development will begin charging an application fee for HCITC projects that advance from the HCITC Preliminary Application stage to the HCITC Full Application stage. Fees must be paid by credit card. Paying the fee does not guarantee that you will be approved for the tax credit. Application fees are non-refundable.
Fee Amount Estimated Private Investment
$150 $10M or less
$250 more than $10M
The Renewable Energy Systems Tax Credit is divided into two types of incentives. The Production Tax Credit (PTC), and the Investment Tax Credit (ITC).
The Production Tax Credit
Applies to large scale generation projects that produce at least 660 kilowatts. The PTC is calculated as $.0035 (.35¢) per kilowatt hour of produced electricity during the project’s first 48 months.
The Investment Commercial Tax Credit
The investment commercial tax credit is a refundable tax credit calculated as 10% of the eligible system cost or $50,000, whichever is less for renewable energy systems utilizing solar pv, solar thermal, wind, geothermal, hydro, and biomass technologies installed for commercial units.
Starting August 15, 2018 in accordance with Utah Code 63M-4-401, the Governor’s Office of Energy Development will begin charging a $15 fee per application submitted. Fees must be paid by credit card.
The Alternative Energy Development Incentive(AEDI) is a fixed post-performance credit of 75 percent of new eligible state revenues for 20 years, for qualifying projects that produce at least 2 megawatts of electricity or 1000 barrels of oil equivalent from qualifying hydroelectric, solar, biomass, geothermal, wind, nuclear, or certain unconventional resources.
To qualify for AEDI, the project must generate new state revenue and new incremental jobs, and it must involve significant capital investment, or the creation of high paying jobs.
Entities seeking consideration of their projects must schedule a "pre-application" meeting with OED. Contact Richard Bell, Incentives Director at (801) 538-8682.
Starting August 15, 2018 in accordance with Utah Code 63M-4-401, the Governor’s Office of Energy Development will begin charging a $150 fee per application submitted. Fees must be paid by credit card.
WELL RECOMPLETION OR WORKOVER
Oil and gas operators who perform a well recompletion or workover may be eligible for a non-refundable severance tax credit. For more information about qualifying expenses, contact the Utah Division of Oil, Gas, and Mining (DOGM) at 801-538-5340. Applications for the tax credit certificate require upload of DOGM Form 15 showing expenses approved by the state, and other supporting documents.