WOODS CROSS — A packaging equipment manufacturing company is getting a state tax break to expand in Davis County, bringing with it 63 new, high-paying jobs.
The Utah Governor’s Office of Economic Development announced Thursday that Premier Tech will expand its operation in Woods Cross, planning to add up to 63 jobs and $19 million in capital investment over 10 years.
Premier Tech, which according to a GOED press release, is “among the largest packaging equipment manufacturers in the world,” will be eligible to earn back up to 15% of the new state taxes they will pay over the next decade, as part their deal with the state. In order to receive the money, the company must provide the 63 jobs with total wages of $23.4 million. The tax credit rebate would be capped at $274,866, according to GOED, with Premier Tech receiving a portion of the total each year it meets the criteria in its contract with the state.
New state tax revenues (from corporate, payroll and sales taxes) are estimated to reach $1.8 million over the life of the 10-year deal.
According to GOED’s release, the company creates “sustainable solutions” that help improve the efficiency of manufacturing facilities around the world. With more than 4,700 employees, the company’s services include a wide range of operations, ranging from weighing, feeding, bagging, and case packing to palletizing and load securing. The company’s services are used in many industries, prominently in the chemical, mineral and food sectors.
Davis County Commissioner Bob Stevenson said Premier Tech’s expansion is an important addition to the Northern Utah manufacturing economy, which was among the hardest hit industries during the COVID-19 pandemic.
GOED Media Relations Manager Tony Young said the Utah Legislature previously authorized the post-performance tax rebates. Eligible companies work with the office to outline specific performance criteria. When GOED confirms the criteria have been met, companies can receive a refund up to 30% of the state taxes they paid for up to 20 years.
More than 20 companies participated in the program last year. The program is available to Utah companies expanding and other companies relocating or building additional operations in the state. Young has said the program has most often been used by Utah-based companies. Since its inception in 2005, about 66% of the program’s tax credits have gone to Beehive State companies. The program is geared toward higher paying jobs and usually requires companies to pay at least 110% of the average county wage where they are located.
GOED says that by design, the program has a ripple effect, creating additional jobs that support the corporate expansions.
According to a 2019 report from the Utah Foundation, state and local tax incentives are often seen as controversial. Critics view them as public subsidies that distort true economic growth and cause local governments to (at least for a time) forgo tax revenue. Proponents see certain tax credits as a necessary tool to spur development when the private sector can’t.
The nonpartisan, nonprofit public policy research firm says the post-performance tax incentives carry less risk for the governments, because they typically receive benefits before paying out any financial incentive.