Business Journal: An Enterprising Offer

An Enterprising Offer
Zoned businesses get a tax break as an incentive.

By Tony Bridges

{mosimage}Besides location, Freeport and DeFuniak Springs have something else to offer businesses looking for a place to settle: tax breaks.

Each has been designated a state enterprise zone, which means city officials can give a variety of incentives to companies located within the citywide zones. Businesses that qualify can save on employee wages, equipment and even utilities.

Perks such as those can be useful in luring new employers to the area, according to Bob Smith, president of the Walton County Economic Development Council.

“In my experience, companies look for incentives,” he said. “And, all things being equal, the tax incentive is a big advantage.”

Owners of enterprise-zone businesses have to apply through local coordinators. If approved, they have several options for receiving breaks, including:

• Jobs sales-tax credit. This allows a business to take a sales and use tax credit for 30 percent or 45 percent of wages paid to new employees who live within a rural county. To be eligible, a business must create at least one new job.

• Jobs corporate-tax credit. This allows a business to take a corporate income-tax credit for 30 percent or 45 percent of wages paid to new employees who reside within a rural county. To be eligible, a business must create at least one new job.

• Business-equipment/building-materials tax credits. These allow a business to receive a refund on sales tax paid on certain equipment, or on materials used to improve property.

• Property-tax credit. This allows a business to take a credit against Florida corporate income tax equal to 96 percent of ad valorem taxes paid on the new or improved property.

• Sales-tax exemption for electricity. This allows a business to claim a 50-percent sales-tax exemption on the purchase of electricity if the municipality has reduced the municipal utility tax by at least 50 percent.

Several businesses in Freeport’s industrial park have applied for the credits, and businesses in DeFuniak Springs saved a combined $17,000 between 1997 and 2002 using the enterprise-zone program.

For now, there seems to be a lull in Freeport.

“It’s being used very little right now,” said Robin Haynes, the enterprise-zone coordinator for the city. “I get a lot of requests for information, but outside of the industrial park, there have been very few people who have come in and said, ‘I want to apply.’”

Smith, of the economic development council, said he plans to use the enterprise-zone incentives as the council begins marketing the Freeport/DeFuniak Springs corridor.

“Fortunately, Walton County is a place a lot of people want to be right now,” he said.