by Janet Ware
Updated 11 months ago
Businesses seeking to expand in or relocate to Florida will find a collaborative, can-do spirit. Here, many entities come together to create a business climate that promotes success.
Such was the case for Brazilian aircraft manufacturer Embraer. The company, which is the world’s third-largest commercial aircraft manufacturer behind Airbus and Boeing, found the perfect location for its first aircraft assembly factory outside of Brazil.
In May 2008, Embraer announced that it would invest $41 million to construct a 149,500-square-foot assembly plant and showroom at Melbourne International Airport. Three components helped seal the deal for Melbourne: workforce, site location and incentives.
Embraer will assemble its new Phenom 100 and Phenom 300 executive jets at Melbourne International Airport. [Photo courtesy of Embraer]
The company expects to begin hiring in January 2010, which corresponds with the retirement of the Space Shuttle. Embraer was quickly convinced that a qualified workforce will be readily available. The company is expected to create 200 high-wage jobs with an annual payroll in excess of $10 million.
Melbourne International Airport also offered a tremendous site location. The greenfield, high and dry site is more than enough to accommodate their plans. The community also offers many amenities for the company’s high net-worth clientele — a key driver in the decision.
A collaborative incentive package was the icing on the cake. Partners on the project include Enterprise Florida, EDC of Florida’s Space Coast, Brevard County, the City of Melbourne, Brevard Workforce Development Board and the Melbourne Airport Authority.Florida’s Business-Friendly Tax Advantages
Incentives are not necessarily the first factor CEOs consider in making site selections, but when the choice gets narrowed down to two or three potential sites, incentives and business-friendly fiscal policies can frequently tip the scale.
Florida consistently earns high marks for its responsible fiscal policies and pro-business tax code. The reasons are clear.
Florida imposes NO:
- State personal income tax (constitutionally guaranteed)
- Corporate franchise tax on capital stock
- Corporate income tax on limited partnerships or subchapter S-corporations
- State-level ad valorem taxes
- Tax on goods-in-transit (up to 180 days)
- Property tax on business inventories
- 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
Taking a Pro-Business Approach
Florida ranks among the best states for business and entrepreneurs because of its pro-business state tax policies and competitive cost of doing business. The state is proud of its competitive and targeted financial advantages.
- Competitive Cost of Doing Business:
Florida offers a cost-efficient alternative to other competitive high-tech states. Put simply, land, labor and capital are more affordable in Florida than in California, New York or Texas. In addition, for businesses in certain targeted industries, the state offers additional incentives. Businesses looking for workforce training, road infrastructure or specialized locations may also quality for specific incentive programs.
- Pro-Business Tax Structure:
Business dollars go a lot farther here given Florida’s limited corporate taxes and no personal income tax. Thanks to a history of responsible spending decisions and high financial reserves, Florida has earned a AAA bond rating — the highest available — while enjoying this low-tax climate. Businesses thrive in this low-tax environment, and their employees enjoy the benefit of no personal income tax.
- Smart Laws:
Tort reform has been a priority for Florida’s business-friendly leaders. Some 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 that businesses need certainty, predictability and efficiency in government regulations. The state’s regulatory agencies and local governments provide quicker, less costly and more predictable permitting processes for significant economic development projects without reducing environmental standards.
- Available Resources:
For entrepreneurs and growing businesses, Florida offers access to capital from private, federal and other sources and strategic business support from the numerous entrepreneurship centers around the state.
- Enterprise Zone Incentives: Florida offers an assortment of tax incentives to businesses that create employment within an Enterprise Zone, which is a specific geographic area targeted for economic revitalization.
- Brownfield Incentives: Florida offers incentives to businesses that locate in Brownfield sites, which are under-utilized industrial or commercial sites due to actual or perceived environmental contamination. [Read more]
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. The state pays 80% and the local community pays 20% of the total tax refund of $3,000 per net new Florida full-time equivalent job to pre-approved applicants who create jobs in Florida; refund is $6,000 in an Enterprise Zone or rural county. Businesses paying 150% of the average annual wage add $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. The QDSC tax refund per job award amount is consistent with the QTI and is available for jobs created or saved in Florida through the conversion of defense jobs to civilian production, the acquisition of a new defense contract or the consolidation of a defense contract that results in at least a 25% increase in Florida employment or a minimum of 80 jobs.
Capital Investment Tax Credit (CITC) — An annual credit against the corporate income tax for up to 20 years that is used to attract and grow capital-intensive industries. Projects must be in designated high-impact portions of the biomedical technology, financial services, information technology, silicon technology or transportation equipment manufacturing sectors, or be a corporate headquarters facility. 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) — 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 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); and (3) make a cumulative investment of at least $100 million ($75 million for R&D) within three years.
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. The award is made to the local government on behalf of a specific business to facilitate public transportation improvements.
Florida encourages growth throughout the state by offering increased incentive rewards and lower wage qualification thresholds for companies located within all rural areas. In addition, Rural Community Development Revolving Loans and the Rural Infrastructure Fund exist to meet the special needs businesses may encounter in Florida’s designated 32 rural counties.
To read more about Florida's rural incentives, see "Rural Advantages"
Businesses located in one of Florida’s 30 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.
For more information on Florida's urban incentives, see "Urban Advantages"
Florida offers sales and use tax exemptions for ...
- 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 development 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 series, commercial music videos or sound recordings
For More Information
To learn more about the specific incentives available to firms locating in rural and urban areas, see pages 48 and 50 or visit www.eflorida.com. For workforce training incentives, visit