Utah · Recycling · UT-RMDZ-001
Recycling Market Development Zone Tax Credit
Publication revised September 24, 2026. Sourcebook page 260.
Credit amount / calculation
Machinery credit uses the applicable Utah income-tax rate, plus 20% of eligible operating expenditures capped at $2,000. Combined current use is limited to 40% of tax liability.
Business fit and eligible activity
Potentially useful to a wood-residual business operating in a designated zone and making products from qualifying recycled/post-consumer material. Qualified investment or approved project activity; confirm eligible property, location and taxpayer type.
Eligibility and practical use
This credit can fit a residual-utilization project, but "recycling" is a legal definition, not a synonym for using sawdust, bark, chips, or mill waste.
Illustrative business benefit
At a 4.45% applicable rate, $750,000 of certified equipment generates $33,375. Eligible operating expenditures of $10,000 add $2,000, for $35,375 before the 40% tax-liability limit. The 20% operating rate does not apply to the equipment.
Timing / first action
Check application or certification requirements before incurring the qualifying expense or beginning the qualifying activity. Obtain environmental-department certification and use the rate for the tax year. The posted August 2024 form shows an older 4.55% rate.
Official sources
- Utah State Tax Commission — TC-40R Recycling Market Development Zones Tax Credit (files.tax.utah.gov)
Related programs
Economic Development Tax Increment Financing Credits
up to
Substantial manufacturing expansions creating high-wage jobs can negotiate refundable post-performance credits; rural projects can receive higher percentages.
Research Activities Tax Credit
Current statute includes
Qualified Utah research can produce multiple nonrefundable credit components.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.