Amazon gets $5.6M state tax incentive to build $200 million facility in Utah

Choosing Utah over six other competing states, Amazon will build a fulfillment center in Salt Lake City with help from a $5.6 million state tax incentive, Gov. Gary Herbert and the Governor's Office of Economic Development said Thursday.

The facility is expected to create at least 130 jobs in the next eight years and involve a capital investment of $200 million by Seattle-based Amazon, the world's largest internet-based retailer.

"It's going to be a great shot in the arm for Salt Lake City's economic development in that Northwest Quadrant so it's win-win-win all the way around," Herbert said.

Salt Lake City Mayor Jackie Biskupski,who traveled to Seattle with Herbert to make the city's case, was integral to the deal, he said. With the state building a new prison — and related amenities such as roads and utility lines — in the area, the city is looking to turn its northwest corner into an economic powerhouse.

GOED's board agreed to provide the Amazon project a $5.6 million tax credit rebate, which will be paid by the state in annual installments as the company reaches investment and job-creation benchmarks laid out in its contract with GOED.

The facility actually may employ more than 200 people, company officials said. But it has committed to providing a minimum of 130 jobs that pay 110 percent of the average wage in the county.

Over the eight-year period of the agreement, the new wages paid by Amazon are expected to total $85.5 million. New state revenues from the corporate, payroll and sales taxes it will pay are projected to top $28.4 million.

"We just say if you create jobs, if you create additional tax revenue, if you do that, we'll give some of it back," Herbert said.

Salt Lake City officials declined to comment on the project.

Herbert said the incentive granted for the new facility is not related to a deal the state reached last year with the retailer, which had not been collecting state sales tax on Amazon.com purchases by customers in Utah. In December, state officials said they had struck a deal that meant the company would start collecting those taxes.

"They're two separate issues," Herbert said.

The state Tax Commission refused to publicly release the agreement with Amazon.com until ordered to do so earlier this year by the state Records Committee. The contract was bare bones, with no reference to any incentive to begin collections. Officials said Amazon.com would keep 1.31 percent of the sales tax it collects as a handling fee, the standard amount retained by large retailers.

Sen. Wayne Harper, R-Taylorsville, who has pushed for the enforcement of online sales taxes, also said the two Amazon deals were unrelated. "Those were handled completely separately," Harper said.

The Amazon project was one of three to receive incentives Thursday from the GOED board.

Lehi-based Podium, which provides technology that helps businesses and consumers interact, will get a tax credit of almost $1.1 million when it completes an expansion that involves a $10 million capital investment and is likely to generate 426 new jobs.

Podium CEO and co-founder Eric Rea said he was pleased to expand the company in its home state.

"Not only do businesses have the governmental support through business-friendly policies, but an expanding pool of local talent means access to essential resources for maintaining momentum," he said in a news release.

The new jobs are expected to pay 110 percent of the county average, adding up to $125 million over five years. Expected new tax revenues are estimated at $5.4 million.

GOED Executive Director Val Hale attributed Podium's decision, in part, to the state's "infrastructure, resources and quality of life [which] support long-term business success."

A $758,000 post-performance tax rebate also was offered to Columbus, Ohio-based Alliance Data to expand its Utah operations. The company has operated Comenity Capital Bank in Cottonwood Heights since 2003.

Alliance plans to spend $15.6 million to expand, creating 105 high-paying jobs over the next five years, with total expected wages of $33.9 million. New tax revenues will amount to $5 million.

The company will build a 134,000-square-foot building at 12921 S. Vista Station Boulevard in Draper for a new customer service center, the company said. The building will have capacity for 700 employees.

Sallie Komitor, chief customer officer of Alliance Data card services, said the additional employees will help the company serve existing brand partners better "as demand for our solutions continues to increase.

"Utah's collaborative culture and spirit of public and private-sector partnership are clear," she added in a news release. "We are pleased to continue investing in this community — in technology, facilities and associates."

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Tribune reporters Tom Harvey and Matt Piper contributed to this report.