Newspaper: IT. Magazine – Italian Trade – IACCSE publication
The State of Florida has been committed, for some time, to an economic policy aimed at the competitive development of its businesses through programs and financial bonuses aimed at reducing the tax burden. The competitiveness of companies, which certainly passes through low production costs, is the success factor in today’s global economy. The State of Florida believes in the development of the High-Tech sector and therefore is strongly committed not only in financing projects of technologically advanced companies but also in the creation of research centers of excellence in collaboration with companies and universities. There is no doubt that this advantageous taxation system has contributed over the time to attract thousands of foreign investors. The numerous tax advantages for investors range from the absence of “corporate” taxes reserved for certain types of companies (limited partnerships or subchapter S-corporations) to the tax exemption for the purchase of machinery aimed at expanding their business or to use electricity exclusively for production processes. The most important programs and incentives provided by the State can be grouped into four macro-categories:
1 – Incentives for specific “high added value” sectors
- Qualified Target Industry Tax Refund (QTI).
The program provides incentives available for companies that create high-wage jobs in specific “high added value” sectors; they provide for tax refunds. Specifically, there is a $ 3,000 net reimbursement for the creation of each new, full-time job, as well as a contribution of $ 6,000 for the creation of each, new work place in particular depressed areas or rural counties. For those businesses that actually pay new employees 150% of the average annual salary, an additional $ 1,000 contribution is added to create each work place; for those who pay 200% of the average annual salary there is a bonus of $ 2,000 for each new created work place. However, there is a maximum reimbursement limit, up to $ 5 million per company.
- Capital Investment Tax Credit (CITC).
This tool is typically used to attract and grow capital-intensive companies. It represents an annual credit, over a 20-year period, against corporate income taxes. All companies operating in areas targeting the following sectors are eligible: alternative energy, biomedical technology, financial services, IT, silicon technology, manufacturing of transport equipment. Each project under the above funding program must involve the creation of at least 100 work places and a capital investment of at least $ 25 million. These costs must include all expenses incurred with the acquisition, construction, installation and commissioning of a project that goes from the start of construction to the actual start of the planned activity. Normally, the amount of the annual credit is determined both by the level of investments and by the entity of the corporate income tax. - High Impact Performance Incentive Grant (HIPI).
It is an incentive aimed at “attracting” and therefore developing structures with a high economic impact. All grants are awarded in certain sectors established by the Government Office of Tourism, Trade and Economic Development – OTTED -. To be eligible for the program, all projects must have the following characteristics: operate in sectors such as biomedical technology, financial services, alternative energy, silicon technologies, manufacturing of transportation equipment; and also, provide for the creation of at least 100 new full-time jobs within a maximum period of three years as well as prepare a cumulative investment in the state for at least $ 100 million over the three-year period. In case of approval of the request, which will take place by the State Economic Development Agency, Enterprise Florida, Inc. – EFI – and by OTTED, at the same time as the start of the activities, 50% of the agreed contribution will be financed while the difference will be paid upon the achievement of all the programmed objectives, both in terms of employment and invested capital.
2- Bonuses for the workforce training
- Quick Response Training Incentives (QRT).
These incentives are aimed at “high added value” companies already operating in Florida, in order to provide the necessary support for the creation of training programs. Local structures such as colleges and universities are made available to companies to assist them in the planning and implementation of courses. Expenses subject to reimbursement include instructor salaries and costs for manuals and textbooks.
- Incentives for infrastructures
The incentives for road infrastructures are also part of the political plan to support the industrial economic development of the state. This type of incentive, called “Economic Development Transportation Fund”, more commonly known as the “Road Fund”; is granted in order to solve traffic and transport problems that could compromise the smooth running of the business of those companies that intend to locate or expand in specific areas. Grants are planned for a total of 3 million dollars and assigned to local administrations for the improvement of public transports.
- Investments in areas undergoing “economic revitalization”
The state of Florida provides various tax bonuses for those who invest in rural or urban areas facing conditions of objective economic backwardness. There are also the so-called “Enterprise Zone”, specific geographical areas, focus on the economic development of the state. The incentives for these areas include the granting a credit on the use and sales taxes, a refund on the taxes for the purchase of machinery, a refund on the taxes paid for the purchase of construction material used as well as, in case of activities falling within an “Enterprise Zone”, of a tax exemption for the electricity used.
di Giancarlo Pelosi