Capital Investment Tax Credit (CITC)

How does the capital investment tax credit affect Florida businesses?

The Capital Investment Tax Credit (CITC) is a valuable incentive the Florida government offers to attract large-scale businesses that make significant investments in the state’s economy. The CITC provides an annual tax credit against Florida’s corporate income tax for companies investing in specific high-impact sectors, such as manufacturing, clean energy, and life sciences. This tax credit encourages businesses to create high-wage jobs and stimulate economic growth throughout Florida.

For Florida-based businesses, the CITC can provide substantial tax savings, making investing in the state’s economy more attractive. In addition, the CITC can be a crucial deciding factor for companies considering Florida as a potential location for expansion or relocation. Finally, by reducing the overall tax burden, the CITC helps create a more favorable business environment and encourages economic development.

Need help regarding economic development incentives? Schedule your consultation today with a top economic development attorney.

Which Florida laws and regulations apply to the CITC?

In Florida, the primary statute governing the CITC is Section 220.191 of Florida Statutes. This statute outlines the eligibility criteria, application process, and calculation of the CITC. To qualify for the CITC, companies must meet specific investment and job creation thresholds, invest in targeted high-impact sectors, and receive a recommendation from Enterprise Florida.

In addition to the statute, Rule 12C-1.0191 of the Florida Administrative Code provides additional guidance on the application process, documentation requirements, and compliance reporting for the CITC.

Which Florida businesses qualify for the CITC?

Businesses must meet the following requirements:

• Sector: The business must operate within targeted high-impact sectors, such as manufacturing, clean energy, and life sciences.
• Investment Threshold: The business must make a minimum capital investment of $25 million in eligible equipment and facilities.
• Job Creation: The business must create at least 100 new, full-time jobs that pay wages above the local average.
• Enterprise Florida Recommendation: The business must receive a recommendation from Enterprise Florida, Inc., a public-private partnership responsible for statewide economic development.

When a set of facts is appropriate to meet the Capital Investment Tax Credit requirements, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation, please contact our office to set up your initial consultation.

What are the strategic benefits for qualifying Florida businesses?

Qualifying Florida businesses can enjoy several strategic benefits from the Capital Investment Tax Credit:

• Tax Savings: The CITC provides a substantial annual tax credit against Florida’s corporate income tax, reducing the overall tax burden and increasing profitability.
• Competitive Advantage: By lowering operating costs, the CITC can give qualifying businesses an edge over competitors in their industry.
• Attractive Business Environment: The CITC, combined with Florida’s favorable tax climate and business-friendly regulations, creates an attractive business growth and expansion environment.
• Workforce Development: The CITC encourages job creation in high-wage, high-impact sectors, leading to a more skilled and diverse workforce in the state.
• Economic Growth: By incentivizing businesses to invest in Florida, the CITC helps stimulate economic growth and development throughout the state, benefiting businesses and local communities.
• Long-term Investment: The CITC is available for up to 20 years, providing a long-term incentive for businesses to maintain and expand their operations in Florida.

Please contact our office to set up your initial consultation to see what actions or defenses may be available for your unique situation.

Frequently Asked Questions

1. Can small businesses qualify for the Capital Investment Tax Credit in Florida?

Small businesses might struggle to qualify for the CITC due to the substantial investment threshold required. For example, the CITC demands a minimum capital investment of $25 million in eligible equipment and facilities and a minimum commitment of 100 new, full-time jobs with wages above the local average. These criteria can be challenging for small businesses, making the CITC more suitable for larger enterprises in targeted high-impact sectors.

2. How does the application process for the Capital Investment Tax Credit work?

Businesses must first consult with Enterprise Florida, Inc., a public-private partnership responsible for statewide economic development. Enterprise Florida will evaluate the business’s qualifications, including its sector, investment plans, and job creation potential. If the company is deemed eligible, Enterprise Florida will submit a recommendation to the Governor and the Florida Legislature for final approval. The application process may take several months, and businesses should plan accordingly.

3. Can the Capital Investment Tax Credit be combined with other economic development incentives in Florida?

Yes, businesses that qualify for the CITC may also be eligible for other economic development incentives available in Florida. These incentives can include tax refunds, exemptions, and credits related to job creation, research and development, or infrastructure improvements. Combining these incentives can further enhance a business’s competitive advantage and foster its growth within the state. Companies should consult with Enterprise Florida or a qualified tax professional to determine their eligibility for additional incentives.

Have more questions about an economic development-related situation?

Crucially, this overview of the Capital Investment Tax Credit does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain tireless advocates at every step. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.