Olaf Roed, president of Green Circle Bio Energy, utilized a $675,000 state grant to provide sewer and water facilties for the company's new plant. [Photo: Ray Stanyard]

Pharmaceutical giant Merck & Co. and the University of South Florida’s H. Lee Moffitt Cancer Center & Research Institute were considering a partnership for the purpose of developing and delivering individualized cancer therapies. Merck had expressed interest in providing $95 million in cash and other support for the joint venture, dubbed M2Gen. A collaborative incentive package helped seal the deal.

From the city of Tampa came $800,000 and land worth $1.2 million; from Hillsborough County came an additional $20 million plus land worth $8 million; and from the state, came another $15 million in incentives. Total package value: $45 million. Value to the cancer patients and their families who stand to benefit from the research coming out of M2Gen: Priceless.

Not every incentive package available in Florida is as large as the M2Gen deal, of course. But all can help put expanding and relocating businesses of every shape and size on a fast track to success.

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Incentives Do Matter

While incentives may not be the first factor to grab a CEO’s attention in making site selections, when the decision comes down to two or three potential sites, incentives and business-friendly fiscal policies frequently tip the scale. That’s where Florida — with its tax advantages and incentive packages tailored to the specific needs of the business in question — really shines.

Florida’s Business-Friendly Tax Advantages Florida consistently earns high marks for its responsible fiscal policies and pro-business tax code. The reasons are clear: 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

Tailored for Success

Florida works with companies on an individual basis to tailor incentive packages to specific needs. Recent examples include:

• Incentives are helping to ease the relocation process for SEIDCON and its principals, Patti Immel, Sherri Sommer and Kirk Immel. [Photo: Jerry Camp]

  Research firm SRI International is tapping into $30 million worth of special incentives available for R&D to build a 30,000-square-foot facility in downtown St. Petersburg that will house the first National Center for Marine and Port Security
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• A $12-million incentive package, including a $675,000 state grant to help Jackson County provide the necessary water and sewer facilities, will jumpstart Green Circle Bio Energy Inc.’s anticipated production of up to 500,000 tons of wood pellets per year for energy-efficient fuel at its new plant near Cottondale.
  
  
• In exchange for a promise to create 100 jobs at its new 62,500-square-foot manufacturing plant in Clewiston, City Mattress is receiving a combined state and local incentives package worth approximately $1.5 million, including 10 acres of land.
  


• Defense contractor SEIDCON, which is relocating its headquarters from southern California to Flagler County, met the criteria for a Qualified Target Industry incentive. That, along with a reduction in county ad valorem taxes, will mean a savings of approximately $100,000 for the company, which provides information assurance and security engineering for IT systems.

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. 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; refunds of $6,000 are available 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 Contractor (QDC) Tax Refund —
Follows the same general guidelines as QTI, but with an emphasis on giving defense/homeland security contractors a competitive edge in consolidating contracts or subcontracts, acquiring new contracts or converting contracts to commercial production. QDC tax refunds may be up to $5,000 per job 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 provided for up to 20 years 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 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, up to $2 million. The award is made to the local government on behalf of a specific business to facilitate public transportation improvements.

Rural Incentives

For more information To learn more about the specific incentives available to firms locating in rural and urban areas, visit www.eflorida.com.

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.

Urban Incentives

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.

More 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