TAX NEWS - April 2009

Florida Jobs Tax Credit (Sales Tax): Rural Enterprise Zones

The Florida Enterprise Zone Program offers various tax incentives to businesses located within the designated enterprise zones. In addition, local governments may also offer their own incentives.

Jobs Tax Credit (Sales Tax) allows a business located within a Rural Enterprise Zone to take a sales and use tax credit for 30 or 45 percent of wages paid to new employees who live within a Rural County. To be eligible, a business must create at least one new job. The Sales Tax Credit cannot be used in conjunction with the Corporate Tax Jobs Credit.


Forms

EZ Jobs Tax Credit  Form DR-15ZC (must be submitted to an EZ Coordinator and DOR within six months after the new employee is hired).


Purpose

Allows business located in a Florida Enterprise Zone a monthly credit against their tax due on wages paid to new employees.


Advantages

- Provides a tax credit of 30% of wages paid to new eligible employees who are residents of Florida Enterprise Zone.  
- If more than 20% of the employees are residents of a Florida Enterprise Zone, the credit is 45%.

 
Limitations

- The tax 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 tax credit is not available if the Enterprise Zone Jobs Tax Credit against corporate tax is taken.
- The tax credit is limited to 24 months if the employee remains employed for 24 months.



Tax Credit ligibility Requirements

Business

- Must be located within a Rural Enterprise Zone. (See  s. 290.004(8), F.S. for Rural Enterprise Zone definition.)
- Must collect and pay sales and use tax.
- Must not be taking E.Z. Jobs Tax Credit against corporate income tax.
- Form DR-15ZC must be submitted to an EZ Coordinator and DOR within six months after the new employee is hired.


Employee

- Must work in a new job in an Enterprise Zone and reside within a rural county. (See s. 288.106(1)( r ), F.S. for more details.)
- Welfare Transition Program participants may reside anywhere, but must work within a zone.
- Must work at least 36 hours per week (no part-time employees).
- Must be employed for three consecutive months.
- New employee cannot be an Owner, Partner, or Stockholder.
- Employees leased from an employee leasing company must continuously be leased to an employer for more than 6 months.
- Previous employees must not have been employed by the hiring business in the preceding 12 months.  
- Tax credits shall be allowed for up to 24 months per new employee.
- Tax credit amount cannot be more than amount of sales tax owed for the month.

 
Calculations

- Number of permanent, full-time zone employees/Number of total permanent, full-time zone and non zone employees
- If this calculation is less than 20% the tax credit will be 30% of monthly wages paid to new employee.
- If this calculation is 20% or more the tax credit will be 45% of monthly wages paid to new employee.