Miami: Our Best Climate is the One Serving Your Business
According to recent media reports, Miami has become the “go-to” location for companies seeking a better business, a fact that has been noticed by many major New York observing the trend of migration to Florida. Consider the following statistics comparing the Miami and New York metro areas:
- Miami’s sales tax is 6.62% vs. New York’s 8.48%
- Metro Miami’s overall cost of living is 52% lower than the New York Metro area
- State and local tax burden in Florida is 9.3% vs. New York’s highest-in-the-nation rate of 12.8%
- Commercial real estate costs per square foot in New York are double Miami’s and residential costs may be five times more in New York
Source: Fox Business News
Miami’s far lower cost of living is allowing relocated businesses to attract and retain employees. But while “lifestyle climate” may be crucial to a happy business move, Miami’s real enticement may be found in Florida’s business climate. The attorneys at Fuerst, Ittleman, David & Joseph can ensure that your company maximizes the many tax advantages and business incentives offered by the state to companies relocating to Florida:
Florida’s stable and highly favorable tax climate provides advantages that make a Florida location profitable for every type of business. Progressive legislation also ensures that Florida remains a worldwide hub for new and expanding businesses.
NO corporate income tax on limited partnerships
NO corporate income tax on subchapter S-corporations
NO state personal income tax guaranteed by constitutional provision
NO corporate franchise tax on capital stock
NO state-level property tax assessed
NO property tax on business inventories
NO property tax on goods-in-transit for up to 180 days
NO sales and use tax on goods manufactured or produced in Florida for export outside the state
NO sales tax on purchases of raw materials incorporated in a final product for resale, including non-reusable containers or packaging
NO sales/use tax on co-generation of electricity
Florida offers Sales and Use Tax Exemptions on”¦
Machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible personal 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.
Florida offers bottom-line advantages for long term profitability for all types of businesses, from corporate headquarters to manufacturing plants to service firms. Florida offers incentives for:
Targeted Industry Incentives:
Qualified Target Industry Tax Refund (QTI)
The Qualified Target Industry Tax Refund incentive is available for companies that create high wage jobs in targeted high value-added industries. This incentive includes refunds on corporate income, sales, ad valorem, intangible personal property, insurance premium, and certain other taxes. Pre-approved applicants who create jobs in Florida receive tax refunds of $3,000 per net new Florida full-time equivalent job created; $6,000 in an Enterprise Zone or Rural Community (county). For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job; businesses falling within a designated high impact sector or increasing exports of its goods through a seaport or airport in the state by at least 10 percent in value or tonnage in each year of receiving a QTI refund, add $2,000 per job; projects locating in a designated Brownfield area (Brownfield Bonus) can add $2,500 per job. The local community where the company locates contributes 20 percent of the total tax refund. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be taken in any single fiscal year. New or expanding businesses in selected targeted industries or corporate headquarters are eligible.
Qualified Defense and Space Contractor Tax Refund (QDSC)Florida is committed to preserving and growing its high technology employment base by giving Florida 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 may receive tax refunds of $3,000 per net new Florida full-time equivalent job created or retained; $6,000 in an Enterprise Zone or rural county. For businesses paying 150 percent of the average annual wage, add $1,000 per job; for businesses paying 200 percent of the average annual salary, add $2,000 per job.
Capital Investment Tax Credit (CITC)
The Capital Investment Tax Credit is used to attract and grow capital-intensive industries in Florida. It is an annual credit, provided for up to twenty years, against the corporate income tax. Eligible projects are those in designated high-impact portions of the following sectors: clean energy, biomedical technology, financial services, information technology, silicon technology, transportation equipment manufacturing, 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. Eligible capital costs include all expenses incurred in the acquisition, construction, installation, and equipping of a project from the beginning of construction to the commencement of operations. The level of investment and the project’s Florida corporate income tax liability for the 20 years following commencement of operations determines the amount of the annual credit.
High Impact Performance Incentive Grant (HIPI)
The High Impact Performance Incentive is 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). In order to participate in the program, the project must: operate within designated high-impact portions of the following sectors– clean energy, corporate headquarters, financial services, life sciences, semiconductors, and transportation equipment manufacturing; create at least 50 new full-time equivalent jobs (if a R&D facility, create at least 25 new full-time equivalent jobs) in Florida in a three-year period; and make a cumulative investment in the state of at least $50 million (if a R&D facility, make a cumulative investment of at least $25 million) in a three-year period. Once recommended by Enterprise Florida, Inc. (EFI) and approved by OTTED, the high impact business is awarded 50 percent of the eligible grant upon commencement of operations and the balance of the awarded grant once full employment and capital investment goals are met.
Workforce Training Incentives:
Quick Response Training Program (QRT)
Quick Response Training (QRT) – an employer-driven training program designed to assist new value-added businesses and provide existing Florida businesses the necessary training for expansion. A state educational facility – community college, area technical center, school district or university – is available to assist with application and program development or delivery. The educational facility will also serve as fiscal agent for the project. 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 customized, flexible, and responsive to individual company needs. To learn more about the QRT program, visit Workforce Florida.
Incumbent Worker Training Program (IWT)
Incumbent Worker Training (IWT) – a program that provides training to currently employed workers to keep Florida’s workforce competitive in a global economy and to retain existing businesses. The program 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 employees. Priority is given to businesses in targeted industries, Enterprise Zones, HUB Zones, Inner City Distressed areas, Rural Counties and areas, and Brownfield areas. For additional information on the IWT program, visit Workforce Florida.
Economic Development Transportation Fund
The Economic Development Transportation Fund, commonly referred to as the “Road Fund,” is an incentive tool 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.
Special Opportunity Incentives:
Rural Incentives: Florida encourages growth throughout the state by offering increased incentive awards and lower wage qualification thresholds in its rural counties. Additionally, a Rural Community Development Revolving Loan Fund and Rural Infrastructure Fund exist to meet the special needs that businesses encounter in rural counties.
Urban Incentives: Florida offers increased incentive awards and lower wage qualification thresholds for businesses locating in many urban core/inner city areas that are experiencing conditions affecting the economic viability of the community and hampering the self-sufficiency of the residents.
Enterprise Zone Incentives: Florida offers an assortment of tax incentives to businesses that choose to create employment within an enterprise zone, which is a specific geographic area targeted for economic revitalization. These include a sales and use tax credit, tax refund for business machinery and equipment used in an enterprise zone, sales tax refund for building materials used in an Enterprise Zone, and a sales tax exemption for electrical energy used in an enterprise zone.
Brownfield Incentives: Florida offers incentives to businesses that locate in brownfield sites, which are underutilized industrial or commercial sites due to actual or perceived environmental contamination. The Brownfield Redevelopment Bonus Refund is available to encourage Brownfield redevelopment and job creation. Approved applicants receive tax refunds of up to $2,500 for each job created.
Local Government Distressed Area Matching Grant Program (LDMG)
The Local Government Distressed Area Matching Grant Program stimulates investment in Florida’s economy by assisting Local Governments in attracting and retaining targeted businesses. Applications are accepted from local governments/municipalities that plan on offering financial assistance to a specific business in the area. These targeted businesses are required to create at least 15 full-time jobs and the project must either be new to Florida; expanding operations in Florida; or leaving Florida unless it receives local and state government assistance. The amount awarded by the State of Florida will equal $50,000 or 50% of the local government’s assistance amount, whichever is less, and be provided following the commitment and payment of that assistance.
Source: Enterprise Florida.