Copyright Which programs are right for your business?

Full text

(1)
(2)

Harak Associates is a consulting firm that

manages the application and

reimbursement process for state and local

incentive programs available to local

businesses, including but not limited to:

Donna Harak

www.HarakAssoc.com

Training grant programs

• Workforce programs

• Tax refund programs

(3)

What’s happening with Incentives in Florida

Under Gov. Rick Scott, the state has revamped the

economic development activities and has determined the

following business clusters are critical to the state’s long

term growth:

CleanTech (Biofuels, Photovoltaic, etc)

Life Sciences (Pharmaceutical, Medical Devices, etc)

InfoTech (Modeling, Simulation, Software, Electronics, etc)

Aviation/Aerospace (Aircraft parts, maintenance, repair as

well as space vehicles, satellite communications, etc)

Homeland Security/Defense (Equipment, transportation and

technology products and services)

Financial/Professional Services

(4)

TAX REFUNDS

Qualified Targeted Industry Tax Refund Program

Qualified Defense & Space Contractor Tax Refund Program Brownfield Redevelopment Bonus Refund

Manufacturing & Spaceport Investment Incentive

TAX CREDITS

Capital Investment Tax Credit

Jobs for the Unemployed Tax Credit

TAX EXEMPTIONS

Semiconductor, Defense & Space Technologies Sales Tax Exemption

CASH GRANTS

High Impact Performance Incentive Quick Action Closing Fund

Innovation Incentive Program

Economic Development Transportation Fund

(5)

Qualified Targeted Industry (QTI) tax refund

Economic Development Transportation Fund

aka the Road Grant

State Sales Tax Exemptions for Manufacturing

Electricity and Steam

Machinery and Equipment

County specific programs

Each county may offer special Business Bonus

programs

Each county may offer Impact Fee Mitigation

(6)

State of Florida

Qualified Targeted Industry (QTI) tax refund

Conduct business nationally or globally

Be a Qualified Targeted Industry

Generate 50% of revenues from outside the state of

Florida

Be competitively attractive to other states or nations

Plan to add at least ten new jobs in the first calendar year

that pay at minimum 115% of the state, county or MSA

average annual wage, whichever is lowest. In 2012, in

Alachua it would be $39,613; in Flagler $33,642 in

Hillsborough County they use 115% of the state’s avg

wage or $46,638.

(7)

State of Florida

Qualified Targeted Industry (QTI) tax refund (cont)

Based on wages of jobs to be create, a business can earn

$3,000 - $5,000 in tax refunds for every new job created

over 3 years

10 new jobs = $30,000 - $50,000 tax refund

25 new jobs = $75,000 - $125,000 tax refund

Types of taxes it will offset include:

Corporate Income taxes

Property (ad valorem) taxes

Sales taxes paid during the course of the job creation

timeframe

Refund pays back in 25% increments over 4 years

This ensures sustainable jobs are created

This ensures the refund does NOT exceed the liability every

(8)

State of Florida

Economic Development Transportation Fund

Provides funding for transportation infrastructure

improvements to spur job creation/retention and

capital investment

Awarded as an inducement for a specific business to

locate to Florida or remain and expand by agreeing to

alleviate transportation impediments

Stop lights, turn lanes, entrance/egress improvements

from the business into the flow of traffic

Monies are awarded to the local county/municipality to

facilitate the road improvement based on the business

agreeing to locate or expand at that site and create

new jobs

(9)

State of Florida

State Sales Tax Exemptions for Manufacturing

Machinery and Equipment

Machinery & equipment purchased by new & expanding

businesses that use such equipment at a fixed location to

manufacture/process/compound/produce tangible

personal property for sale, or for exclusive use in

spaceport activities, is sales/use tax exempt.

Electricity & Steam

Charges for electricity and steam used directly and

exclusively at a fixed location to operate machinery/

equipment that is used to manufacture/process/

compound/produce items of tangible personal property for

sale, or to operate pollution control, recycling, maintenance,

or monitoring/control equipment used in such operations,

may be exempt from the sales tax.

(10)

State of Florida programs

Quick Response Training (QRT) grant

For Qualified Targeted Industries:

CleanTech, Life Sciences, InfoTech, Aviation/Aerospace,

Homeland Security/Defense, Financial/Professional

Services, Headquarters

10% increase over existing employee headcount (new

hires) or ten new jobs, whichever is greater

Customized training

Reimburses for Instructor Wages ONLY at a cap of $30/hr

2 year grant timeframe

(11)

State of Florida programs

Incumbent Worker Training (IWT) grant

For companies in business at least 1 year and with at least 1

FTE

For existing employees only; No new hires

Any type of training

Management and supervisory training

Train to learn new processes and procedures

Certifications (IT, CEU, professional designations)

Telephone etiquette

Basic Office Suite (Word, Excel, PowerPoint, etc.)

50% reimbursement of training costs up to maximum

$50,000 and companies have one year from date of approval

to complete all training

(12)

Local Workforce Board Programs

Employed Worker Training

Training is expected to help avoid reductions in staff and improve

retention

Training should qualify the candidate for potential career advancement,

resulting in increased wage and/or creation of entry-level positions as a

result of trainees moving up

Instructor led training only and must result in a Certificate of

Completion

Grant award typically capped at $50,000 (set by Regional WFB)

Only employees earning between $12/hr and $25/hr at time of training

are eligible

Must complete all training before end of state fiscal year (June 30

th

)

On-the-Job Training

Eligible candidates are new hires who have been unemployed for at least

30 days prior to their hiring

Must apply for and be approved for the program prior to hiring

 Local Regional WFB sets the wage minimum for eligibility

(13)

If your business meets the qualifying criteria

for a program you could expect:

QTI new job creation – minimum $30,000 tax refund

QRT new hire training grant – $1,200 - $1,500/new

hire over the two year period

IWT existing employee training – 50% reimbursement

of training costs up to a maximum of $50,000

Employed Worker Training for existing employees –

maximum determined by RWB; usually $50,000

OJT new hire training – 50% wages reimbursed for

(14)

Direct financial incentives

provide direct monetary assistance to a business from the local government or through a local government funded organization. The assistance is provided

through grants, loans, equity investments, loan insurance and guarantees.

These programs generally address business financing needs but also may be invested in workforce training, market development, modernization, and technology commercialization activities. Cash

grants provide the greatest flexibility and immediate benefit to the company by reducing capital outlays. However, loans, bonds, and equity financing are commonly used to make resources available with an expectation that the dollars will be returned for future investments.

Another important category of direct financial incentives is in the area of training subsidies. Other forms of direct financial incentive include revolving loan funds, product development corporations, seed capital funds, and venture funds. These programs directly supplement market resources through public lending authorities and banks.

(15)

Indirect incentives

include grants and loans to local government entities,

non‐profits, and community organizations to support and promote business investment or develo pment. The recipients include communities, financial institutions, universities, community college s, training providers, venture capital investors, and childcare providers.

In many cases the funds are tied to one or more specific business locations or expansion projects. Other programs are targeted toward addressing the general needs of the business community, including infrastructure, technical training, new and improved highway access, airport expansions and other facilities.

Funds are provided to the intermediaries in the form of grants, loans, and loan guarantees. Indirect incentives may also be used to leverage private investment in economic development. For instance, linked deposit programs in which local government funds are deposited in a local financial institution in exchange for providing capital access or subsidized interest rates top qualified business borrowers.

(16)

Taxbased Incentives

Use the tax code (or tax base) as the source of direct or indirect subsidy to

qualified businesses. It is more stable and less visible than direct financial or indirect incentives because it does not typically require an annual appropriation. Tax‐based incentives can be either

discretionary or entitlements. While tax based incentives function like direct financial incentives,

the ubiquitous use of these incentives justifies a separate categorization. Tax‐based incentives can be further classified into five sub‐categories:

• CREDITS, which provide a reduction in taxes due, after verification that statutory or contractual terms have been met.

• REFUNDS, which provide a return on taxes paid, after verification that statutory or contractual terms have been met.

• EXEMPTIONS, which provide freedom from payment of a variety of taxes normally applied to certain business activities.

LOCAL PROPERTY TAX ABATEMENTS or ASSESSMENT REDUCTIONS, which reduce or

decrease the assessed valuation of ad valorem taxes, to include real property and personal property. Because the ad valorem tax is a local government revenue source, the cost of the incentive is borne by local governments.

(17)

http://www.edr.state.fl.us

http://www.floridajobs.org

http://www.workforceflorida.com/ResourcesLinks/RegionalW

orkforceBoards/RWBMap.php

http://www.workforceflorida.com/PrioritiesInitiatives/Funding

Opportunities/IWT.php

http://www.workforceflorida.com/PrioritiesInitiatives/Funding

Opportunities/QRT.php

(18)

Donna Harak

Ph: (813) 240-7047

E-Mail:

DHarak@HarakAssoc.com

URL:

www.HarakAssoc.com

Figure

Updating...

Related subjects :