Encouraging Growth
Florida is consistently ranked among the nation’s best states for business and entrepreneurs because of its pro-business fiscal policies and targeted financial incentives that promote innovation. Why should you do business in Florida? Consider these advantages:
 RKO Industries Inc., a Hendry County company that fabricates railroad ties from the used plastic goods cast off by farms and nurseries, is reaping the benefits of Florida’s business advantages in the form of tax exemptions for electricity use and equipment purchases and reimbursement for workforce training programs.? [Photo: RKO Industries Inc.] |
Land, labor and capital are more affordable in Florida than in most comparable states, and businesses in certain targeted industries may take advantage of additional incentives. Companies looking for workforce training, road infrastructure and specialized locations also may qualify for specific incentive programs.
Pro-business tax structure
Business dollars go further in Florida because of limited corporate taxes and no personal income tax. And while many other states have seen their bond ratings drop in recent months, Florida’s credit remains solid thanks to its continued history of responsible spending decisions and efforts to build and maintain financial reserves.
Smart laws
Tort reform has long been a priority in Florida. Recent actions include the elimination of joint and several liability, rate reductions for workers’ compensation insurance and class-action suit reform.
Expedited permitting
Florida understands the importance businesses place on certainty, predictability and efficiency in government regulations. The state’s regulatory agencies and local governments continually work to provide quicker, less costly and more predictable permitting processes for significant economic development projects while maintaining high environmental standards.
Available resources
Florida offers access to capital from private sources such as venture capital companies and financial institutions, as well as publicly funded federal and state programs. Strategic business assistance is provided at 34 Small Business Development Centers and at the Disney Entrepreneur Center. Help in preparing Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) proposals also is available through Enterprise Florida.
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Tax Advantages Florida earns high marks for its responsible fiscal policies and pro-business tax code. FLORIDA IMPOSES NO: » State personal income tax (constitutionally guaranteed) » Corporate income tax on limited partnerships or subchapter S-corporations » Corporate franchise tax on capital stock » State-level property tax assessed » Property tax on business inventories » Property tax on goods-in-transit (up to 180 days) » Sales and use tax on goods manufactured or produced in Florida for export outside the state » Sales tax on purchases of raw materials incorporated in a final product for resale, including non-reusable containers or packaging » Sales/use tax on co-generation of electricity |
? Financial Incentives
Qualified Target Industry (QTI) Tax Refund
Available for companies that create high-wage jobs in targeted high value-added industries. Includes refunds on corporate, income, sales, ad valorem, intangible personal property, insurance premium and certain other taxes. Pre-approved applicants that create jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created; refunds of $6,000 in an Enterprise Zone or rural county. Businesses paying 150% of the average annual wage receive an additional $1,000 per job; businesses paying 200% of the average annual salary add $2,000 per job.
Qualified Defense and Space Contractor (QDSC) Tax Refund
Follows the same general guidelines as QTI, but with an emphasis on giving defense, homeland security and space business contractors a competitive edge in consolidating contracts or subcontracts, acquiring new contracts or converting contracts to commercial production. Pre-approved applicants creating or retaining jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created or retained; refunds of $6,000 in an Enterprise Zone or rural county. Businesses paying 150% of the average annual wage receive an additional $1,000 per job; businesses paying 200% of the average annual salary add $2,000 per job.
Capital Investment Tax Credit (CITC)
An annual credit provided for up to 20 years against the corporate income tax that is used to attract and grow capital-intensive industries in Florida. To be eligible, projects must be in designated high-impact portions of the clean energy, biomedical technology, financial services, information technology, silicon technology or transportation equipment manufacturing sectors, or be a corporate headquarters facility. Projects also must create a minimum of 100 jobs and invest at least $25 million in eligible capital costs, which include all expenses incurred in the acquisition, construction, installation and equipping of a project from the beginning of construction to the commencement of operations.
High Impact Performance Incentive Grant (HIPI)
A negotiated grant used to attract and grow major high-impact facilities in Florida. Grants are provided to pre-approved applicants in certain high-impact sectors designated by the Governor’s Office of Tourism, Trade and Economic Development (OTTED). To participate in the program, the project must: (1) operate within designated high-impact portions of the clean energy, biomedical technology, financial services, silicon technology or transportation equipment manufacturing sectors, or be a corporate headquarters facility supporting international, national or regional operations; (2) create at least 100 new full-time equivalent jobs (75 in an R&D facility) in Florida in a three-year period; and (3) make a cumulative investment of at least $100 million ($75 million in R&D) in a three-year period.
Economic Development Transportation Fund
Commonly referred to as the “Road Fund,” the Economic Development Transportation Fund is designed to alleviate transportation problems that adversely impact a specific company’s location or expansion decision. The award amount is based on the number of new and retained jobs and the eligible transportation project costs, up to $3 million. The award is made to the local government on behalf of a specific business for public transportation improvements.
More Advantages Sales and Tax Exemptions » Machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible property for sale » Labor, parts and materials used in repair of and incorporated into machinery and equipment » Electricity used in the manufacturing process » Certain boiler fuels (including natural gas) used in the manufacturing process » Semiconductor, defense and space technology-based industry transactions involving manufacturing equipment » Machinery and equipment used predominantly in research and development » Labor component of research and developmental expenditures » Commercial space activity — launch vehicles, payloads and fuel, machinery and equipment for production of items used exclusively at Spaceport Florida » Aircraft parts, modification, maintenance and repair, sale or lease of qualified aircraft » Production companies engaged in Florida in the production of motion pictures, made-for-television motion pictures, television services, commercial music videos or sound recordings |
Site-Specific Advantages
?RURAL INCENTIVES
Rural Infrastructure Fund
Grants made to local governments on behalf of a business that may fund up to 30% of the costs for public infrastructure upgrades.
Rural Community Development
Revolving Loans
A loan or loan guaranty available for a specific project that will lead to new jobs and increase the economic visibility and diversification of Florida’s rural counties.
Rural Job Tax Credit
An incentive for eligible businesses to locate in one of Florida’s rural counties. Provides $1,000 per qualified employee and can be taken against Florida corporate income tax or Florida sales and use tax.
» The following enhanced tax incentives are available to businesses located in Rural Enterprise Zones (REZs):
Jobs Tax Credit, Sales Tax
Credit against sales tax for 30% or 45% of wages paid to new employees who reside within a REZ. To be eligible, a business must create at least one new job. Cannot be used in conjunction with the corporate income tax credit.
Jobs Tax Credit, Corporate Income Tax
Credit against corporate income tax for 30% or 45% of wages paid to new employees who reside within a REZ. To be eligible, a business must create at least one new job. Cannot be used in conjunction with the sales tax credit.
Business Equipment Sales Tax Refund
For sales taxes paid on the purchase of certain business property used exclusively in a REZ for at least three years.
Building Materials Sales Tax Refund
Applies to sales taxes paid on the purchase of building materials used to rehabilitate real property located in a REZ.
Property Tax Credit,
Corporate Income Tax
Credit against Florida corporate income tax equal to 96% of ad valorem taxes paid on the new or improved property for new or expanded businesses in a REZ, up to $50,000 annually for up to five years.
Sales Tax Exemption for Electrical Energy
A 50% sales tax exemption available to qualified businesses located within a REZ on the purchase of electrical energy, if the municipality has reduced the municipal utility tax by at least 50%.
Community Contribution
Tax Credit
50% credit on Florida corporate income tax, insurance premium tax or sales tax refund for donations made to local community development programs.
? URBAN INCENTIVES
Urban Job Tax Credit
Provides credits to eligible businesses that are located within the 13 urban areas designated by the Governor’s Office of Tourism, Trade and Economic Development (OTTED) and hire a specific number of employees. Ranges from $500 to $2,000 per qualified job and can be taken against either Florida corporate income tax or Florida sales and use tax.
» The following enhanced tax incentives are available to businesses located in urban Enterprise Zones (EZs):
Jobs Tax Credit, Sales Tax
Credit against sales tax for 20% or 30% of wages paid to new employees who reside within an EZ. To be eligible, a business must create at least one new job. Cannot be used in conjunction with the corporate income tax credit.
Jobs Tax Credit, Corporate Income Tax
Credit against corporate income tax for 20% or 30% of wages paid to new employees who reside within an EZ. To be eligible, a business must create at least one new job. Cannot be used in conjunction with the sales tax credit.
Business Equipment Sales Tax Refund
For sales taxes paid on the purchase of certain business property used exclusively in an EZ for at least three years.
Building Materials Sales Tax Refund
Applies to sales taxes paid on the purchase of building materials used to rehabilitate real property located in an EZ.
Property Tax Credit,
Corporate Income Tax
Credit against Florida corporate income tax equal to 96% of ad valorem taxes paid on the new or improved property for new or expanded businesses within the EZ, up to $50,000 annually for up to five years.
Sales Tax Exemption for
Electrical Energy
A 50% sales tax exemption on the purchase of electrical energy for qualified businesses within an Enterprise Zone, if the municipality has reduced the municipal utility tax by at least 50%.
Community Contribution Tax Credit
50% credit on Florida corporate income tax, insurance premium tax or sales tax refund for donations made to local community development programs.
? BROWNFIELD INCENTIVES
Brownfield sites are defined as real property, the expansion, redevelopment or reuse of which may be complicated by actual or perceived environmental contamination. Because the severity of environmental degradation/contamination in Florida is often much lower than in many other U.S. states, cleanup of Brownfield sites in Florida is generally easier, quicker and cheaper than other parts of the country.
Advantages of Brownfield sites include:
- $2,500 Job Bonus Refund for each new job created by an eligible business
- Highly attractive business locations with existing infrastructure
- Voluntary cleanup tax credits
- Cleanup liability protection
- Low-interest loans for assessment and cleanup
- Increased State Loan Guarantee which can improve lending opportunities
- Expedited permitting
- 4And since Brownfield properties are often located within Urban Enterprise Zones, additional financial incentives may be available.
WORKFORCE TRAINING INCENTIVES
Talented people are any company’s greatest resource. With that in mind, Workforce Florida Inc., the agency charged with overseeing and monitoring the administration of the state’s workforce policy, programs and services, makes several incentives available to Florida employers.
Quick Response
Training Program (QRT)
An employer-driven program designed to assist new value-added businesses and provide existing Florida businesses with the necessary training for expansion. A state educational facility — community college, area technical center, school district or university — assists with application and program development or delivery. The company may use in-house training, outside vendor training programs or the local educational entity to provide training. Reimbursable training expenses include: instructors’/trainers’ wages, curriculum development and textbooks/manuals. This program is flexible, customized and responsive to individual company needs.
Incumbent Worker
Training (IWT)
A program that provides training to currently employed workers to retain existing businesses and to increase Florida’s workforce competitiveness in a global economy. IWT is available to all Florida businesses that have been in operation for at least one year prior to application and require skills upgrade training for existing full-time employees. Priority is given to businesses in targeted industries, Enterprise Zones, HUB Zones, distressed Urban Inner City areas, rural areas and Brownfield sites, as well as to businesses with 25 or fewer employees or whose grant proposals represent a significant upgrade in employee skills or a significant layoff-avoidance strategy.
Work Opportunity Tax Credit
Employers hiring welfare recipients and individuals from other groups, including food stamp recipients, some veterans, vocational rehabilitation clients and people receiving Supplemental Security Income, may receive a credit of up to $2,400 against their federal income taxes. For employees working more than 400 hours, employers receive up to 40% of qualified wages; for individuals working between 120 and 400 hours, employers are eligible for tax credits of up to 25%. The specific forms needed to take advantage of this tax credit must be completed and filed within 21 days of the employee’s start date.
WORKFORCE TRAINING INCENTIVES (continued)
On-The-Job Training (OJT)
Employers can recoup up to half of wages paid to workers pre-approved by one-stop career centers or other workforce providers through on-the-job training for employment usually not available elsewhere. OJT is particularly applicable to higher-skilled occupations and can be done in conjunction with classroom training at educational institutions. Reimbursements are limited to six months and may not exceed the time required to acquire the skill needed for the position.
Work Supplementation
Also known as grant diversion, Work Supplementation allows cash assistance benefits to be paid to an employer for a specified period of time as an incentive to hire the individual into their regular workforce. Employment must be full-time at a rate at least equal to the federal minimum wage and should lead to long-term unsubsidized work.
Site-Specific Incentives
Businesses located in Enterprise Zones may be eligible for various tax credits if they hire new employees from groups including welfare recipients and graduates of Workforce Investment Act classroom training programs. Businesses can claim a percentage of the employee’s wages against either their corporate income tax or to offset property or sales tax on building materials and business equipment.
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? CLEAN ENERGY INCENTIVES
Florida’s leaders have demonstrated their strong commitment to clean energy technologies by making these incentives available to companies looking to produce renewable energy and to those wanting to integrate renewable energies into existing operations.
Renewable Energy Technology
Investment Tax Credit
A tax credit applicable to 75% of all capital costs, operation and maintenance costs and R&D costs up to a limit of: (1) $3 million in connection with hydrogen-powered vehicles and fueling stations; (2) $1.5 million in connection with an investment in commercial stationary hydrogen fuel cells in the state; and (3) $6.5 million in connection with an investment in the production, storage and distribution of biodiesel and ethanol.
Renewable Energy Production Tax Credit
Designed to encourage the development and expansion of facilities that produce renewable energy in Florida, this annual credit — equal to $0.01 for each kilowatt-hour of electricity produced and sold to an unrelated party during a given tax year up to $5 million per state fiscal year per applicant — is awarded to a taxpayer based on production and sale of electricity from a new or expanded Florida renewable energy facility.
Renewable Energy Technologies,
Machinery, Equipment and
Material Sales and Use Tax Refund
A refund of sales and use taxes paid on equipment, machinery and other materials used for: hydrogen-powered vehicles, materials incorporated into hydrogen-powered vehicles and hydrogen-fueling stations ($2 million annual statewide cap); commercial stationary hydrogen fuel cells ($1 million annual statewide cap); materials used in the distribution of biodiesel and ethanol, including fueling infrastructure, transportation and storage ($1 million annual statewide cap); and gasoline fueling station pump retrofits for ethanol.
Renewable Energy Technologies
Grants Program
Provides matching grants for demonstration, commercialization, research and development projects relating to renewable energy technologies — i.e., any technology that generates or utilizes a renewable energy resource — and innovative technologies that significantly increase energy efficiency for vehicles and commercial buildings.
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