October 21, 2020
Thursday, August 15, 2013
Earlier today it was erroneously reported that BlueWare, Inc. had received incentive funding from the state. BlueWare has in fact received NO funding from the state. The company was approved for a Quick Action Closing Fund (QACF) incentive of $550,000 and a Qualified Target Industry (QTI) Tax Refund of $760,000, but has not met the performance milestones required to receive their incentive funding. The programs worked exactly as designed – to award incentive funds only when projects meet their performance requirements. The status of BlueWare’s incentive funding can be viewed on the Department of Economic Opportunity Portal.
Both the QACF and QTI programs are performance-based and include specific milestones that must be met in order to receive the incentive funding. Under Governor Scott and Secretary of Commerce Swoope, milestones put in place to receive QACF awards have been strengthened.
Economic development incentives come in various forms, including tax refunds, tax credits, tax exemptions, and cash grants. Other tools, such as financing, can help facilitate an economic development project. A thorough evaluation of the project’s needs as compared to the eligibility requirements of various incentive programs help dictate which programs may be a good—or not so good—fit for each project.
The majority of Florida’s competitive economic development projects utilize tax refunds. With these incentives, the business first enters into a contract with the State, which includes a new job creation goal, a schedule by which these new jobs are to be created, and an average wage to be paid for the new jobs. After the business has commenced the project and begun hiring, it submits an annual claim form and documentation of taxes paid. The State verifies the claim data with the company’s quarterly unemployment compensation and payroll reports and verifies the tax documentation. If the State confirms the contractual obligations have been met and the local financial support has been received (if required) from the community, a refund check is sent to the business. If a QTI business partially performs but does not meet its full contracted job or wage requirements, it may be entitled to a pro-rated refund, less a penalty, or it will be invited to apply for an Economic Recovery Extension (ERE). Businesses not filing claims or not meeting performance obligations are terminated from the program.
In the case of BlueWare, the state’s incentive programs have worked exactly as designed – to protect tax payers from projects that do not perform as outlined in their contracts. Not only are programs like QTI “pay after performance,” the incentive requires that the company meet performance criteria on a set schedule and that it REMITS ITS TAXES to receive a rebate. It is essentially a “pay after performance and after you pay Florida” incentive.