Briefing: Florida’s Qualified Target Industry Tax Refund Program
Florida’s Qualified Target Industry Tax Refund (QTI) is the state’s most widely used incentive program. It is designed to encourage high-skills job creation and encourage the growth of low-impact, light-industrial, corporate-headquarters type enterprises and and other targeted industries. The program aims to diversify Florida’s economy by enabling the state to effectively compete for higher-wage jobs.
New or expanding businesses, small and large, that create at least 10 new jobs paying 115 percent of the average annual local wage may receive tax refunds of up to $3,000 per new job created, or up to $6,000 in an enterprise zone or rural county. Additional “per job” bonuses are available for businesses paying 150 or 200 percent of the average annual wage or locating in a designated Brownfield. There is a cap of $5 million in refunds per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be paid in any single fiscal year.
What is the purpose of QTI?
Florida competes with other states and foreign countries for the high-wage jobs created by businesses in innovative industries. To effectively compete, Florida uses performance-based business incentives as part of its economic development toolkit. In exchange for a business creating jobs in the state, the business receives a tax refund once new jobs are created.
The state administers these financial incentives with oversight and approves the incentives only in situations when they clearly will play a material role in convincing a targeted business to locate or expand in the state. Incentives may be the deciding factor for businesses making site selection decisions in a globally competitive environment. While modest compared with the job-based incentives offered by many of Florida’s competitor states and nations, QTI is working to achieve Florida’s goals of economic diversification, higher-wage job creation and increased capital investment. Without QTI, Florida communities may be at a disadvantage when competing for economic development projects.
How does the program work?
QTI tax refunds are paid over a four-year period, at minimum, following creation and maintenance of net, new high-wage Florida jobs and payment of taxes. In order for a company to receive any tax refund via the program, it must meet all performance conditions – high-value jobs and wages are verified before any refunds are paid. That information is a public record under Florida law.
Participation in the QTI program requires that new jobs be paid an average annual wage of at least 115 percent of the prevailing local or statewide wage.
To enhance business development in areas of economic need, the wage requirement may be waived in special circumstances for projects located in a rural area, brownfield or enterprise zone. Average wages paid by individual businesses are considered proprietary business information and are protected by Chapter 288.1067, Florida Statutes.
When job creation is phased in over multiple years, the payment of associated refunds extends four years from the final phase, ensuring that new jobs are maintained over the term of the agreement. There is a cap of $5 million per single qualified applicant in all years, and no more than 25 percent of the total refund approved may be paid in any single fiscal year.