Why Florida?

There are seven different incentives available under this program:

ENTERPRISE ZONE JOBS TAX CREDIT (SALES TAX)

This credit allows businesses located in the Enterprise Zone a monthly credit against their Florida sales and use tax due on wages paid to new, full-time employees equal to 20 percent of wages paid to new eligible employees who are residents of the Enterprise Zone (and/or are Welfare Transition Program participants residing anywhere). If 20 percent or more of the employees are residents of the Enterprise Zone, the credit is 30 percent of wages paid to new eligible employees.

The credit is limited to the amount of tax due on each return. There is no refund or carry-forward for credit in excess of the tax due. This credit is not available if the Enterprise Zone Jobs Tax Credit against corporate tax is taken. The credit is limited to 24 months if the employee remains employed for 24 months.

Forms must be filed with the Enterprise Zone Development Agency (EZDA) within four months of hire date. Failure to file on time will result in credit being disallowed. EZDA has 10 business days to process and certify the form. Form DR-15CS (Sales and Use Tax Return) must be submitted by the 20th of the next month (or will be considered late). View Florida Statute 212.096

ENTERPRISE ZONE JOBS TAX CREDIT (CORPORATE INCOME TAX)

This credit allows businesses located in the Enterprise Zone a corporate income tax credit on wages paid to new, full-time employees equal to 20 percent of wages paid to new eligible employees who are residents of the Enterprise Zone (and/or are Welfare Transition Program participants residing anywhere). If 20 percent or more of the employees are residents of the Enterprise Zone, the credit is 30 percent of wages paid to new eligible employees.There is a five-year carry-forward provision for unused portion of past credits.

Firms must earn more than $5,000 to take advantage of the credit. This credit is not available if the Credit Against Sales Tax for Job Creation is taken. The amount of the credit must be added back to the Florida taxable income. Federal tax burden may increase since state tax liability is reduced. The credit is limited to 24 months if the employee remains employed for 24 months.

The Enterprise Zone Development Agency (EZDA) has 10 business days to process and certify the form. View Florida Statute 220.181

BUSINESS MACHINERY AND EQUIPMENT SALES TAX REFUND

This program provides a refund on state sales tax paid on the purchase of eligible machinery and equipment costing at least $5,000 per unit, which is used exclusively in an Enterprise Zone for at least three years.

If 20 percent or more of the permanent, full-time employees of the business are Enterprise Zone residents, the maximum refund per application will be no more than the lesser of $10,000 or 97 percent of the sales tax paid on eligible machinery and equipment purchases of up to $171,800.

If less than 20 percent of the permanent, full-time employees of the business are Enterprise Zone residents, the maximum refund per application will be no more than the lesser of $5,000 or 97 percent of the sales tax paid on eligible machinery and equipment purchases of up to $85,900.

There is no limit on the number of applications that can be applied for provided the per unit price of the eligible machinery is at least $5,000 and has been purchased within six months of filing.

Applications for Enterprise Zone business Machinery and Equipment Sales Tax Refunds must be filed with the Florida Department of Revenue within six months after the machinery and/or equipment is purchased. The EZDA has 10 business days to review and verify the business is located within the Enterprise Zone. View Florida Statute 212.08(5)(h)

BUILDING MATERIALS SALES TAX REFUND

This program provides a refund on state sales tax paid on the purchase of building materials used to rehabilitate real property located within the Enterprise Zone. Only one sales tax refund on building materials is available per parcel of real property unless there is a change in ownership or lessee. A building permit must be issued for improvements being made to the building site.

The minimum refund available is $500, which roughly equates to $8,600 of building materials. If 20 percent or more of the permanent, full-time employees of the business are Enterprise Zone residents, the maximum refund per parcel will be no more than the lesser of $10,000 or 97 percent of the sales tax paid on building material purchases of up to $171,800. If less than 20 percent of the permanent, full-time employees of the business are Enterprise Zone residents, the maximum refund per parcel will be no more than the lesser of $5,000 or 97 percent of the sales tax paid on building material purchases of up to $85,900.

Applications for Enterprise Zone building material sales tax refunds must be filed with the Florida Department of Revenue within six months after the building materials are purchased, unless the Property Appraiser reassesses the property. In that event, the Enterprise Zone property owner has six months from the date of the reassessment to make the application. The EZDA has 10 business days to review and verify the business is located within the Enterprise Zone.

Note: Effective July 1, 2010, condominium parcels and condominium property, as defined in section 718.103, Florida Statutes (F.S.), are no longer eligible for the refund of sales tax paid on building materials used in the rehabilitation of real property located in an Enterprise Zone. View Florida Statute 212.08(5)(g)

ENTERPRISE ZONE PROPERTY TAX CREDIT

This credit allows new or expanded businesses located in the Enterprise Zone and creating five or more new jobs a corporate income tax credit equal to 96 percent of ad valorem taxes paid on the new or improved property. Any unused portion of the credit may be carried forward for five years. This credit also allows rebuilding businesses who have suffered damage in an ‘emergency’ a tax credit based on the ad valorem taxes paid from the assessments on property replaced or restored.

Firms must earn more than $5,000 to take advantage of the credit. The amount of the credit must be added back to the Florida taxable income. Federal tax burden may increase since state tax liability is reduced.

If 20 percent or more of the full-time employees are Enterprise Zone residents, then the maximum of $50,000 annual credit can be claimed for five years; otherwise, the credit is limited to $25,000 annually for five years.

Form DR-456 must be filed with the Property Appraiser no later than April 1 of the year in which the real property is first subject to assessment. The EZDA has 10 business days to review and verify the business is located within the Enterprise Zone. View Florida Statute 220.182

SALES TAX EXEMPTION FOR ELECTRICAL ENERGY

This program is available to businesses located within the Enterprise Zone in a: newly occupied structure (no previous electrical service); renovated structure (no electrical service for three preceding billing periods); or has received a building materials sales tax refund, a 50 percent exemption on municipal utility tax and at least a 50 percent exemption from the state sales tax on electrical energy.

If 20 percent or more of the businesses’ employees are Enterprise Zone residents, the business will receive a 100 percent exemption from the state sales tax; if less than 20 percent of the businesses’ employees are Enterprise Zone residents, the business will receive a 50 percent exemption from the state sales tax.

The EZDA has 10 business days to review and verify the business is located within the Enterprise Zone. Please note that the mailing address has changed for form DR-15JEZ. The new address is:

Florida Department of Revenue
Central Registration
Fuel Unit
P.O. Box 6480
Tallahassee, FL 32314
View Florida Statute 212.08 (15)

COMMUNITY CONTRIBUTION TAX CREDIT

This program allows any business in Florida to receive a 50 percent credit on Florida corporate income tax, insurance premium tax or sales tax refund for donations to local community development projects. The annual amount of credit granted is limited to $200,000 per firm and $3,500,000 for the state.

The approved community development project must be undertaken by an ‘eligible sponsor’ and must be located in the Enterprise Zone. The locational requirement may not apply if the project is ‘designed to construct or rehabilitate housing for low-income or very-low-income households’ and is an approved project by the Division of Strategic Business Development.

For each dollar donated, businesses may receive a 55.5-cent reduction in Florida tax liability (50 cents from the credit and 5.5 cents from the deductible of the donation). The donation may also be deducted from federal taxable income. A five-year carry-forward provision is available for any unused portion of the credit.

Firms must earn more than $5,000 to take advantage of the credit. Federal tax burden may increase since state tax liability is reduced. IRS rules of valuation of donated goods may require depreciation recapture; therefore, the deduction may be decreased.

To receive the credit, the project sponsor must first submit a proposal to Division of Strategic Business Development  for approval. Then businesses file form 8E-17TCA#01 to Division of Strategic Business Development. Projects must be recertified on an annual basis.

For more information on this program contact:

Burt C. Von Hoff
Florida Department of Economic Opportunity
Division of Community Development
107 East Madison Street; MSC 160
Tallahassee, Florida 32399
Phone:  850-717-8518
E-Mail:  burt.vonhoff@deo.myflorida.com
www.floridajobs.org
View Florida Statute 220.183