TAX NEWS - April 2009

Florida Property Tax Credit (Corporate Income Tax): Rural and Urban 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 tax incentives.

New or expanded businesses located within an enterprise zone are allowed a credit against Florida corporate income tax equal to 96% of ad valorem taxes paid on the new or improved property.



Forms

Property Tax Credit Form F-1158Z


Purpose

New or expanded business located in an Enterprise zone in Florida are allowed a credit on Florida corporate income tax equal to 96% of ad valorem taxes paid on the new or improved property.


Advantages

Any unused portion of the tax credit may be carried forward to five years.


Limitations

- Firms must earn more than $5,000 to take advantage of the credit.
- The Federal tax burden may increase, since state tax liability is reduced. The amount of the tax credit must also be added back to Florida taxable income.


Eligibility Requirements

- The corporation must be located within an Enterprise Zone
- Firms must earn more than $5,000 to take advantage of the tax credit.
- New businesses must establish 5 or more new jobs.
- Expanding businesses must establish 5 or more new jobs.
- Rebuilding businesses must have suffered damage in an "emergency."


Tax Credit Calculation

- New businesses: tax credit will be based on the amount of ad valorem taxes paid.
- Expanding businesses: tax credit will be based on the additional ad valorem taxes paid from the assessments on additional real or tangible personal property acquired for the expansion project.
- Rebuilding b businesses: tax credit will be based on the ad valorem taxes paid from the assessments on property replaced or restored
- If 20% or more of the full time employees are Enterprise Zone residents then the maximum of $50,000 annual tax credit can be claimed for 5 years; otherwise the tax credit is limited $25,000 annually for 5 years.


Calculations

- New businesses: tax credit will be based on the amount of ad valorem taxes paid.
- Expanding businesses: tax credit will be based on the additional ad valorem taxes paid from the assessments on additional real or tangible personal property acquired for the expansion project.
- Rebuilding businesses: tax credit will be based on the ad valorem taxes paid from the assessments on property replaced or restored.