Despite the global pandemic, Idaho remains a secure place for capital investment. Recently ranked first in the nation for financial stability, Idaho Governor Brad Little credits limiting government spending, using conservative revenue forecasting, reducing red tape, and maintaining a healthy rainy-day balance.
“Idahoans have faced much hardship this year, but we have been working hard to ease the challenges and restore the prosperity Idaho had before the global pandemic,” Governor Little said.
Idaho’s rebound efforts were also evidenced by a number one rating from the Fiscal Survey of States for economic momentum. Six announcements of expansions and new facility builds during the first three months of fiscal year 2021 have contributed to that momentum.
PetIQ, Lactalis, and Western Aircraft announced significant expansions of their Idaho locations, while TruWest Beef, Frigitek, and Scoular Company plan major greenfield projects in the state. Combined capital expenditure for the six expansions amounts to $310,700,000 and will bring over 1000 jobs to the Gem State. Locations for the new business include the Boise Valley, Magic Valley, and Eastern Idaho.
Five of these six fast growing companies qualified for Idaho’s Tax Reimbursement Incentive. Established July 1, 2014, the Tax Reimbursement Incentive offers qualifying companies a tax credit of up to 30 percent on income, payroll, and sales taxes for up to 15 years.
To be eligible for Idaho’s Tax Reimbursement Incentive:
- Companies in rural areas must create 20 new jobs, and those in urban centers must create 50.
- New jobs must be full-time (30 hours or more) and pay equal to or greater than the average county wage.
- Requires a meaningful community contribution.
- Company must prove its stability and a significant economic impact to the community and Idaho.
- Company must prove that the incentive is a critical factor to its decision.
As of September, Idaho approved its 70th Tax Reimbursement Incentive award since its inception. With over 12,000 jobs and $2 billion in capital expenditure projected, the incentive has benefitted both rural and urban Idaho communities in addition to both new-to-Idaho and existing Idaho businesses.
New Incentive Tools
In addition to established incentives, Idaho continues to innovate and respond to the everchanging business environment in a creative and meaningful way. Access to government is often referenced as something that sets Idaho apart when it comes to business relocation and expansion. Whether it means bringing all state agencies to the table quickly or creating new government programs, Idaho is committed to moving at the speed of business.
In 2020, the Idaho Legislature demonstrated this commitment by approving two new incentives.
The Data Center Sales Tax Exemption eliminates sales tax on server equipment and construction materials used in the construction of new, qualifying data centers. To be eligible for the tax exemption, companies must 1) create and maintain at least 30 new jobs in Idaho within the first two years after beginning operations, paying an average wage that is at or above the county average for the county in which the data center is located and 2) make a capital investment of at least $250,000,000 within five years after construction begins and be solely devoted to the purpose of providing the data center, or have a separately operated segment of a business solely devoted to the purpose of providing the data center.
The legislature also approved a 20 percent tax credit for Idaho employers who contribute to an employee’s 529 college savings account. The federal government recently expanded the use of 529 accounts to include college tuition expenses, apprenticeship expenses, and student loan repayment. The credit is capped at $500 per employee, per year, and gives employers another creative tool in talent retention. Furthermore, the program will continue enhance Idaho’s overall education achievement by giving parents an easy way to save for the future.
When companies make an investment in Idaho, they can rest assured that their investment is secure. As a state with a reputation for being predictable and consistent, Idaho’s existing businesses and new companies to the state can have confidence in the stable environment that Idaho has created. Idaho continues to seek out new ways to help businesses and reduce red tape. In addition, financial security ensures that radical tax increases are not going to happen.
“I am proud to talk about all the ways Idaho is leading the country in our economic prosperity, but we simply cannot continue that trajectory if do not do all we can to protect our neighbors, schools, and the economy in the coming months,” Governor Little said.
Stable, reliable broadband infrastructure positions Idaho communities to attract business and enhance quality of life for their citizens. The Idaho Broadband Grant program was created to provide up to $50 million in funding to public organizations to purchase broadband infrastructure, equipment, and services from private internet service providers.
In August, the Idaho Broadband Grant Review Committee and Idaho Commerce awarded 102 projects $48.9 million in funding to purchase broadband infrastructure, equipment, and services to address needs for distance learning, telehealth, public safety, and eCommerce expansion.
“We are appreciative of the $50 million in CARES Act funding approved by the Governor’s Coronavirus Financial Advisory for new Idaho broadband infrastructure in areas identified during the Governor’s Broadband Task Force last year,” said Tom Kealey, Director of Idaho Commerce. “These projects will help many rural communities and tens of thousands of households with new high-speed internet service for remote learning, working, local government services and telehealth access.”
Awards included nearly $38 million to fund over 43,000 underserved households, over $11 million for public safety and local government, and one telehealth award. Of the 102 awards, more than 65 were to communities of less than 3,000 residents and more than 35 went to otherwise unserved communities, creating new economic expansion opportunities for Idaho communities and thousands of residents.