Florida's competitive fiscal incentives pay dividends to businesses and residents alike.
Mayor John Peyton, the Jacksonville Regional Chamber of Commerce and Merrill Lynch & Co. jointly announced in late 2005 that the company might be bringing 800 new high-wage jobs to the city. Plans were also on the table for a $16 million expansion and renovation at the Merrill Lynch campus on Jacksonville's south side. Although Merrill Lynch already had a strong presence and a 20-year history in Jacksonville, none of this was considered final until a few months later when the financial giant's application for a state of Florida Quali- fied Target Industry (QTI) Tax Refund Credit was approved.
Now, thanks to one of the primary incentives available to new and expanding businesses in Florida, both Merrill Lynch and the city of Jacksonville are winners. Merrill Lynch gets to recoup some of the expenses it incurred up front to expand its technology development and infrastructure support departments and services and operations divisions. And Jacksonville will enjoy the benefits accruing from a 60% boost in the company's local annual payroll and 800 new jobs paying as much as 150% of the statewide average wage.
Area Development's site selection survey in 2005 revealed that businesses seeking to relocate or expand look at three key factors first: highway accessibility, labor costs and the availability of a skilled workforce. But it is the fourth factor on this list--incentives-- that frequently tips the scale. And with its wide variety of competitive incentive programs, including tax refunds and exemptions, Florida is increasingly grabbing the attention of companies that are seeking an especially business-friendly environment.
The state's Qualified Target Industry (QTI) Tax Refund, which provides tax refunds based on high-wage job creation, has proved particularly appealing for plenty of other businesses in addition to Merrill Lynch.
Stock Building Supply, the nation's number one building supply distributor to professional contractors, already had a long history of doing business in Florida when the availability of QTI Tax Refunds induced company officials to establish their first regional manufacturing center in the state. They chose a site at the Northeast Florida Industrial Complex in Clay County.
Stock made a commitment to invest $7.4 million in improving a 260,000- square-foot building, a former grocery food distribution center. Stock expects to hire an estimated 95 workers in the first three years to more than 150 within five years.
QTI also benefited IMS ExpertServices, a firm providing expert witness and litigation consultant search services.
The state of Florida offers a wide range of incentives to help businesses of every type and size.
CEO Mike Wein says incentives were a key factor in his firm's decision to relocate to Escambia County in Florida's Northwest region. IMS had looked at Denver and Atlanta, but ultimately chose Pensacola, in large part because of job creation incentives, which included the Qualified Target Industry Tax Refund. IMS projects an average pay of more than $64,000 per year (double the local average) and plans to hire 16 new employees for its Pensacola operation.
The decision made by OneSimple- Loan to expand its corporate headquarters in Oldsmar in the Tampa Bay region is directly tied to QTI, too. This nationwide student loan solutions company will add 52 new jobs paying above the average wage and retain more than 30 existing positions.
Says founder and President Paul Simino, "Pinellas County Economic Development's (PCED) staff worked closely with us to ensure we understood all of the business incentives available for eligible companies creating new jobs. The assistance we received from PCED was a motivator for our company to grow and expand in Florida."
While QTI is the most widely used of Florida's innovative incentive programs, it is by no means the only one that new and expanding companies are using to great advantage.
The Economic Development Transportation Fund, sometimes simply called the "Road Fund," addresses a need faced by many expanding businesses--the alleviation of transportation impediments to potential growth. Sea Ray Boats Inc., a leading manufacturer of fiberglasshulled pleasure yachts, faced just such a situation. Traffic bottlenecks surrounding its manufacturing facility in Flagler County had caused the company to consider a new location.
For special incentives available to firms locating in rural and urban areas, see pages 54 and 56.
However, a $1.5 million grant from the state's Economic Development Transportation Fund for improvements to roads in the area surrounding the plant is helping to retain the 644 full-time jobs and $21 million annually in payroll dollars Sea Ray provides. The Road Fund is awarded to local government on behalf of a company creating or retaining jobs.
The infrastructure improvements, which are expected to be completed early in 2007, will ease traffic flow for company employees, vendors and residents in nearby neighborhoods.
For rural development
Businesses that elect to locate or expand in rural areas may be eligible for a special set of incentives. Funder America, a manufacturer of melamine-laminated particleboard, which recently completed construction of a 60,000-square-foot plant at Sebring Regional Airport in Florida's Heartland region, qualified for a $440,000 Rural Infrastructure Fund Grant, which was used for storm water retention work. And in Baker County, Hanson PLC opened its new $24 million roof tile production facility in 2006 by taking advantage of an incentives package worth up to $1.45 million. The package included 10 years' worth of local property tax abatements, rural job tax credits and a QTI Tax Refund.
Incentives are also available on the local level. For example, with the assistance of a counselor from the Economic Development Council of Collier County, the developers of Training and Manufacturing Institute (TMI) in Immokalee were able to obtain property tax relief, including more than $196,000 to cover impact fees. The EDC also helped expedite the permitting process.
Customized workforce training programs are also available for companies looking to staff up. See the Workforce article on page 16 for more information.
Florida's Business-Friendly Tax Advantages
? NO state personal income tax
? NO corporate franchise tax levied on capital stock
? NO state-level ad valorem taxes
? NO tax on goods-in-transit
? NO sales and use tax on goods manufactured or produced in Florida for export outside the state
? Qualified Target Industry (QTI) Tax Refund
The Qualified Target Industry Tax Refund on previously paid taxes is available to companies that create high-wage jobs in targeted high value-added industries. The state pays 80% and the local community pays 20% of the total tax refund of up to $5,000 per job created (the refunds could be higher in certain designated distressed areas). Each QTI business must comply with contracted job creation schedules and wage levels before any refunds are paid, or risk dismissal from the program; exemptions are permitted in exceptional circumstances, such as when a business is negatively affected by a named hurricane or tropical storm.
? Qualified Defense Contractor Tax Refund (QDC) Program
The Qualified Defense Contractor Tax Refund follows the same general guidelines as QTI, but is focused on bringing defense-related businesses to Florida. QDC allows Florida businesses to offer more competitive bids in order to secure highly lucrative defense contracts.
? Economic Development Transportation Fund
Typically referred to as the "Road Fund," the Economic Development Transportation Fund is used to improve transportation systems to help companies commit to growing in Florida. Under this program, local governments may receive up to $2 million for the construction or improvement of transportation infrastructure needed to accommodate a new or expanding industry.
? Rural Incentives
Florida provides resources to specifically attract new development and foster business expansion within its designated 33 rural counties. Rural incentives include job tax credits, the Rural Infrastructure Fund to help underwrite the cost of infrastructure upgrades and loan programs for projects that will lead to new jobs and economic diversification in rural areas. In addition, companies located within designated Rural Enterprise Zones (REZ) may tap into several enhanced incentives, such as tax credits and tax refunds, in exchange for job creation.
? Urban Incentives
Businesses located in one of Florida's 28 urban Enterprise Zones may be eligible, under certain circumstances, for credits on sales and use or corporate income taxes. Tax credits may also be available for donations made to local community development programs and to businesses that elect to locate or expand in designated brownfields areas.
? Capital Investment Tax Credit (CITC)
The Capital Investment Tax Credit (CITC), an annual credit against the corporate income tax provided for up to 20 years, is used to attract and grow capital-intensive industries in Florida. Eligible projects are those in designated highimpact segments of the biomedical technology, financial services, information technology, silicon technology and transportation equipment manufacturing sectors. Projects must also create a minimum of 100 jobs and invest at least $25 million in eligible capital costs.
? High Impact Performance Incentive Grant (HIPI)
The High Impact Performance Incentive (HIPI) is a negotiated grant used to attract and grow major high-impact facilities in Florida. To qualify, the project must be in designated high-impact portions of the biomedical technology, financial services, silicon technology and transportation equipment manufacturing sectors. The project must create at least 100 new full-time equivalent jobs (75 if an R&D facility) and make an investment of at least $100 million ($75 million if an R&D facility) within three years.
? Innovation Incentive Program
Created by the Florida Legislature in 2006, the Innovation Incentive Program provides $200 million to assist in the creation of hubs of innovation that will yield high-wage jobs (at least 130% of average wage) and yield a significant return for taxpayers in the long term.
|More of Florida's Business-Friendly Tax Advantages|
NEW Full sales tax exemption for machinery and equipment used to produce tangible personal property for sale and machinery and equipment used to increase production output in Spaceport and manufacturing facilities. Previously, manufacturers had to first pay as much as $50,000 in taxes on equipment purchases before being allowed to purchase tax free.
NEW Full sales tax exemption for machinery and equipment used predominately in research and development
|For More Info|
Contact Enterprise Florida, the state's economic development partnership, at (407) 316-4600 or www.eflorida.com