Firms can get 5% recycling credit

PROVO — Businesses in unincorporated Utah County doing their part to benefit the environment through recycling are worthy of a little help at tax time.

The Utah County Commission has adopted a resolution to re-establish a Recycling Market Development Zone, making businesses in the unincorporated area of the county eligible for a 5 percent tax credit on machinery and equipment.

The state program doesn't require anything of the county except to designate areas as recognized recycling zones, Commission Chairman Jerry Grover said.

"It's not a county program," Grover said. "It's part of the state recycling credit."

The resolution applies to all areas zoned industrial in unincorporated Utah County, he said.

In 1996, the Legislature introduced the RMDZ program, which focuses on recycling as an economic development tool. The program offers financial assistance to businesses that collect, process, distribute or use recycled materials in their manufacturing operations.

"It's a state income tax incentive targeted to end users of recycled commodities," said Les Prall, recycling program manager in the Governor's Office of Economic Development. "That means the end user is somebody who takes a recycled commodity and turns it into a usable product."

Tax credits are given only to businesses when they invest in machinery and equipment that allows them to use recycled materials, Prall said.

"If a company invests $100,000 in a piece of equipment, it can claim a 5 percent income tax credit, which is $5,000," he said. "But they have to be making an investment. The don't get a credit for just being there (in a Recycling Market Development Zone.)"

Businesses can also receive a 20 percent tax credit on operating expenses, but that credit has a $2,000 limit, Prall said.

The RMDZ was re-established in Utah County at the request of Pacific States Cast Iron Pipe Co., the only company in the unincorporated area utilizing the state tax credit, Grover said.

Pacific States manufactures ductile iron pipe for culinary water in subdivisions and municipalities. The source of the iron for the pipe is purchased shredded scrap metal from automobiles and appliances such as refrigerators, washers and dryers. The company reportedly recycles between 100,000 and 150,000 tons of shredded metal a year.

In addition, the by-product slag is sold to a manufacturer of concrete blocks for the construction and building industry.

Businesses interested in participating in the RMDZ program can call the Utah County Commission office at 851-8233.

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