Business Friendly States: Utah in Profile
The business world is often fraught with a number of pitfalls that new and established businesses should seek to avoid at all costs. While there are some states that are historically not very welcoming to business, there are other states that work hard to create a very business-friendly environment. Utah is one of these states and is widely regarded as one of the most business-friendly states in the entire country. While there are a lot of reasons for this distinction, the bottom line is that Utah has gone out of its way to provide business owners with a huge number of incentives to work there. Aside from the tax benefits and business-friendly laws, Utah has a population that is able to meet the growing needs of a varied workforce.
The Human Capital of Utah
Utah has a population of roughly 2,879,800 people spread throughout the vast expanse of its borders. However, the large majority of people living in Utah live in the few major city-centers that dot the landscape here. Salt Lake City, St. George and Provo are among the most heavily-populated cities in the state. These cities boast an impressive number of skilled laborers and educated, white-collar personnel. In truth, this is one of the many reasons why so many large businesses have decided to promote major operations here. There is a low enough skills gap that employers can fill just about any position they need to with a highly-qualified candidate.
The percentage of college graduates in Utah has risen to a little over 30% in the past few years thanks to a steady migration rate of 4,700 people per year. This growth has allowed Utah to staff and accommodate the growing number of businesses that take root within its borders. In fact, most sources place Utah as one of the top three states in the country when it comes to labor supply.
The Legal Climate of Utah
There are a number of laws and incentives in place throughout Utah that are designed to encourage business growth. Forbes magazine recently listed Utah as the 8th best state in the country when it comes to its regulatory environment. This is thanks in part to the large number of tax credits available to business owners in the state as well as the low overall tax burden. These benefits make it so business owners can pay less to do business in Utah while simultaneously getting more benefits from the state.
The Enterprise Zone tax credit is a big credit that many business owners profit from throughout the state. Certain areas of the state are defined as "Enterprise Zones" by the local elected officials based on a number of criteria. These areas are usually defined by an under-served, under-employed and development-stricken community in Utah. These can be rural areas, urban areas or even suburban areas depending on the circumstances. The benefits that come along with developing in these areas can be very good for the right businesses. This is especially true for businesses with a heavy industrial or skilled labor need.
The Recycling Market Development Zone tax credit is a more specialized tax credit that is available to businesses that deal in materials recycling, industrial composting or other types of recycling-based business. This credit is designed to provide relief benefits to companies that need to invest in the large amount of infrastructure and labor that is required for businesses like this. The credit allows a business to claim up to 40% of its total tax liability as a credit if they meet all of the stringent guidelines of the credit.
In terms of regulation, Utah is known for having a fairly lax regulatory environment with some things and a stringent one with others. Business licenses are very easy to acquire in Utah and the licensing procedure for specialized businesses has been made very simple. Environmental regulations are among the most stringent in the state due to the very low amount of agricultural and water-based resources available. In areas where these resources are not in direct competition with business being conducted, these regulations are slightly more lax. Many of the licensing, safety and environmental regulations are developed by the state but local governments also have the right to create their own guidelines.
Utah has quickly become one of the most popular states in the United States for businesses. This is a distinction that has been hard won, but it is one that the state truly has earned. Through a series of intelligent decisions regarding business regulation, taxation and crediting, the state has become a hotspot for economic growth. As the state charges forward out of the great recession, business owners from around the globe have started to turn toward Utah as an essential part of their operational strategy.