Florida’s aerospace and tech industries, among others, could get a boost if an expired targeted-industry tax refund program gets new life from state lawmakers. The program won the backing of Florida TaxWatch, which released the results of a study early Thursday calling on the lawmakers to bring the Qualified Target Industry (QTI) tax refund program back after it failed to win support from lawmakers in two previous sessions.
Critics of government-funded business incentives say they amount to “corporate welfare,” but others point out that until other states stop using such programs, Florida will have a hard time competing. Florida TaxWatch President and CEO Dominic Colabro rejects the corporate welfare label for the QTI, and says many businesses considering a move won’t even look at a state if it doesn’t offer certain incentives.
“While Florida TaxWatch has long maintained the position that incentive programs will not be the sole reason a company selects a particular state to locate its operations, they can certainly be a disqualifying factor in the initial stages or a deciding factor in the final stage,” Colabro said. “Essentially, they can make a difference – especially when it comes to growth and diversification of the manufacturing sector – and without QTI, the state could be losing out on billions of dollars in economic benefit.”
The QTI grant program was first established in 1994, and is subject to annual appropriation by state lawmakers. It has typically enjoyed bipartisan support, but ran into trouble when it failed to garner enough votes during two consecutive legislative sessions in 2019 and 2020. The program is performance-based, seeking to refund corporate income, sales, ad valorem, and other specific state and local taxes paid by companies, only when specific, targeted commitments are met, to encourage the creation and retention of high-wage, quality jobs in the most sought-after industries.
To qualify for a QTI refund, a company must apply within the Florida Department of Economic Opportunity (DEO) and be certified as a qualified target industry business. These currently include aviation and aerospace; corporate headquarters; clean technology; defense and homeland security; financial and professional services; global logistics and trade; information technology; life sciences; manufacturing; and research and development.
“It’s clear that QTI provides a significant benefit to Florida with its robust return-on-investment of more than five to one, creating thousands of high-paying jobs every year. In fact, in Fiscal Year 2019-2020 alone, 159 companies certified under the program created 7,890 jobs, and QTI generally produces jobs that pay more than 140 percent of the statewide average annual wage,” Colabro said. “We’re hopeful that lawmakers will consider this during the 2022 Legislative Session and agree that we can’t delay the revival of QTI, a flagship economic development program with a proven track record of success, any longer.”