When the New Jersey-based software firm USR Systems announced in December 2016 that it would open a development center in Gainesville, the Gainesville Area Chamber of Commerce noted that an incentive helped attract the company.
That incentive, the Qualified Target Industry Tax Refund Program, is sound business because it is performance-based, said County Commissioner Lee Pinkoson.
“The recipients must live up to what they promise to do in creating jobs, or they won’t get any tax benefit,” he said.
QTI requirements include the following:
- The incentives come in the form of refunds of various taxes, not as money paid upfront.
- To receive a refund, a business must document that it has hired the number of employees it promised and that it is paying the wages it envisioned.
In the case of USR Systems, the company expects to hire 140 employees over three years at an average annual wage of $55,000.
Pinkoson notes that county government has few economic incentives it can offer companies.
“This is a good tool that we can use in cooperation with other segments of the community to attract jobs,” he said.
Providing incentives benefits the community, Pinkoson said.
“The new workers pay sales tax that benefits state and local government, and economic activity helps the entire community,” he said. “People who come here buy homes and pay property taxes.”
Pinkoson added, “The cost of the incentives isn’t a lot of money compared to the benefit.”
Under QTI, state government grants 80 percent of the tax refund. For jobs created within a municipality, county government and the city government each are responsible for 10 percent. For jobs in the unincorporated area, the county is responsible for 20 percent.
Qualifying companies — both ones new to the community and existing ones that are expanding — can receive a refund on various taxes of $3,000 for every job they create.
The refund can be even higher under certain conditions, including for jobs in an enterprise zone or a designated brownfield as well as for jobs paying 150 percent or more above the average wage in the area. Additionally, companies get a bonus if they locate in a designated brownfield area.
County government needs to be part of the community’s economic development efforts, Pinkoson said.
“Many people and organizations in the community are working together to create a welcoming and supporting attitude for new and existing businesses,” he said.