Good year-round weather, a quality transportation infrastructure, an excellent business tax climate, a low-cost operating environment, and a pro-business mindset at most levels of government. All are positive reasons to start a new business or expand an existing one in Florida and, in particular, in greater Lake Wales.
Yet, there are even more reasons —financially beneficial reasons for the short and long term — for business owners or entrepreneurs to take a hard look at Lake Wales as a company home or a place to launch a satellite operation.
Depending on the type of enterprise, its size, the number of people it employs, the income potential for employees, and other factors, a company seeking to build in or relocate to Florida can qualify for one or more business and tax incentives. Offered at the state level on down, these incentives were put into place by forward-looking public leaders to encourage new business activity, develop new industry and foster job creation.
Here’s a brief overview of what’s available to a wide range of businesses through state and county partnerships with the Lake Wales Economic Development Council and the city of Lake Wales:
Florida consistently gets high marks by the Tax Foundation in the organization’s annual State Business Tax Climate Tax Index — for 2015, the Sunshine State comes in at No. 5 — and the state extends its pro-business and low-tax policies with several economy-building incentives.
The Qualified Target Industry (QTI) Tax Refund is available to Florida communities to encourage job growth in certain high-value industries. Pre-approved applicants receive refunds on corporate income, sales, property and certain other taxes. To be eligible for the QTI, applicants must pay an average annual wage that is at least 115 percent of the state’s metropolitan statistical area (MSA) or the local average wage ($41,170 annually for Polk County). The amount of the refunds comes to about $3,000 per new job created. An additional $1,000 “per-job” bonus is available for businesses paying 150 percent of the local or statewide average annual wage ($53,700 for Polk County).
The state also offers several tax exemptions for qualifying businesses. These include the Manufacturing Machinery and Equipment Sales Tax Exemption, the Machinery and Equipment Used for Research and Development Sales Tax Exemption, the Pollution Control Equipment Sales Tax Exemption, the Electricity Tax Exemption, Boiler Fuels Tax Exemption, and the Repair and Labor Charges Sale Tax Exemption.
The Urban Job Tax Credit is an incentive for eligible businesses that locate and create new jobs in a designated urban area. The credit is $500 per qualified job and can be taken against either the Florida Corporate Income Tax or the Florida Sales and Use Tax.
In addition, the state’s Economic Development Transportation Fund may be used to help alleviate transportation challenges that may adversely affect a company’s decision to build or expand in Florida. Eligible projects can include access roads, turn lanes and traffic signals. Road Fund monies can be used for project design, engineering and construction costs. The award amount depends on necessary improvements and comes as a grant to the government body responsible for the improvements.
Polk County Industrial Revenue Bonds (IRBs) and the Polk County Economic Development Ad Valorem Tax Exemption are the key county programs available to businesses that want to set up shop here.
With below-market interest rates, the IRBs provide for tax-free and long-term financing of fixed assets for qualified manufacturers and 501(c)3 non-for-profit enterprises. IRBs are issued by the Polk County Industrial Development Authority — on behalf of private companies — to finance land, building, and equipment. Issued from $1 million to $10 million, IRBs cannot be used for inventory or working capital.
The purpose of the Polk Economic Development Ad Valorem Tax Exemption is to encourage quality job growth in targeted and high-value businesses and to help the county better compete with other regions seeking new business development.
In addition to the county business incentives, CareerSource Polk (www.careersourcepolk.com) is available to help companies with their hiring, recruiting and training needs. Career Source Polk is a nonprofit corporation that oversees workforce development resources for the county’s residents and businesses. Services include help with online applications, applicant screening, testing, getting new hires started, and conducting job fairs.
Before anyone gets the idea that the tax and other incentives outlined here are just for new businesses, company owners with the idea to expand also may be eligible. Right here in Lake Wales, Oakley Transport Inc. qualified for several incentives with plans for a $1.5 million expansion project (completed last year) that promised to add 103 jobs.
The fact is, 70 to 80 percent of an area’s new jobs usually come from existing companies. It’s a fact that can’t be ignored when the good news about state and local tax exemptions and other financial incentives are being presented to developing businesses.
For more information and resources about local business growth incentives, go online to lakewaleschamber.com.