Starting a Business in Florida
The Sunshine State is one of the best states in the country to run a small to medium sized business. It has consistently been ranked as one of fastest growing states for entrepreneurs and is one of the largest economies in the nation. The largest industries are Tourism, Food services, Healthcare, and Construction. Florida has an extremely low tax burden (It has no personal state income tax for individuals and a low corporate tax structure), low unemployment, and working capital that is available from many different avenues. It has a fair regulatory system, but business licenses are still required for many commercial activities. With this type of ecosystem, Florida offers businesses the growth opportunities that it takes for a company to excel and thrive. There are numerous tax benefits that Florida offers businesses in the form of tax credits, exemptions, and refunds.
WHAT TO DO AFTER STARTING A BUSINESS IN FLORIDAThe Florida Department of Revenue enforces tax collection policies for businesses as well as individuals in the state. The Florida Secretary of State sets guidance for new and existing businesses alike. After forming a company with the Florida Secretary of State, you will then want to immediately address your other compliance obligations. To satisfy state requirements, you can take care of your Florida Sales Tax Certificate Registration. Depending on the industry you are in and the location of your business, you may have to satisfy compliance requirements by obtaining the appropriate Business Licenses to avoid penalties. Some other tasks that can be completed after starting a business in Florida are getting Florida business insurance, verifying an EIN number of a competitor, checking the status of form DR-1 or DR-15 to see if there was a rejection notice, and looking up a Florida sales tax rate. After all administrative and compliance tasks are done, you can move on to checking out the available incentive programs. Here are some of the best programs offered to Florida businesses:
- The Capital Investment Tax Credit program allows qualified companies in specific industries to take an annual credit against corporate income tax for 20 years from the start of operations.
- The Film in Florida Sales Tax Exemption is available to qualified production companies for an exemption on Sales and Use Tax from the lease or purchase of tangible personal property. The company will need to present an exemption certificate to a Sales and Use Tax dealer that is registered in Florida. The equipment must be depreciated over a useful life of 3 years.
- The Florida Exemption for Research or Development Program offers a tax exemption against the cost of tangible personal property that is used in the fabrication of an end product. A Sales and Use Tax direct pay permit must be issued to the seller for the exemption to be made available.
- The Florida Certain Repairs and Labor Charges Tax Exemption program allows specified manufacturing and construction companies to claim a Sales and Use Tax exemption. An exemption is taken for the labor and production charges for parts, components, and materials that are used to make industrial equipment and machinery.
- The Urban Job Credit Program incentivizes the creation of new jobs by qualified businesses that are situated within specific urban areas. The credit is for $500 to $2000 for each employee that is qualified. Another job credit program that is available for qualified businesses is the Rural Job Tax Credit Program. This program allows for a tax credit of $1000 to $1500 per employee with a maximum of $500,000 in tax credits taken in a calendar year. The credits for both programs are used on the business Sales and Use Tax return.
- The Exemption for Individual Machinery and Equipment used for Research and Development program is available to specific manufacturing businesses. It is available for purchases of equipment and machinery that are used primarily for research and development purposes. A Sales and Use Tax direct pay permit must be issued to the seller for the exemption to be made available. In order to receive this direct pay authorization, a seller must register for a sales tax permit.