TAX NEWS - April 2009

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

The Florida Enterprise Zone Program offers various tax incentives to businesses located within the designated enterprise zones.

Florida Urban Enterprise Zones Jobs Tax Credit allows a business located within an Urban Enterprise Zone to take a sales and use tax credit for 20 or 30 percent of wages paid to new employees who reside within an enterprise zone. 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 tax credit against their tax due on wages paid to new employees.


Advantages

- Provides a credit of 20% 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 30%.


Limitations

- The tax credit is limited to the amount of tax due on each return.
- There is no refund or carry-forward for tax credit in excess of the tax due.
- Tax credit is not available if the Enterprise Zone Jobs Tax Credit against corporate tax is taken.
- Tax credit is limited to 24 months if the employee remains employed for 24 months.


Eligibility Requirements for this Tax Credit

Business

- Must be located within an Enterprise Zone. 
- 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 reside and work in a Florida Enterprise Zone.
- 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 resident employees/total number of permanent, full-time zone and non-zone resident employees
- If this percentage is less than 20% the tax credit will be 20% of monthly wages paid to new employee.
- If this percentage is 20% or more the tax credit will be 30% of monthly wages paid to new employee.