Tax Law Article
CCLM Law

The Qualified Target Industry Tax Refund

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By: Zachary Brown

A tax incentive is a way that the government can encourage or attract certain economic activities to a particular area. Tax incentives typically are aimed at attracting investment as a way of increasing employment, economic output, research and technology development, and improving infrastructure to surrounding areas. Tax incentives are offered at the federal, state, and local level through a variety of different means and mechanisms. The Qualified Target Industry Tax Refund (QTITR) is one type of incentive offered by the State of Florida

The QTITR is a tool the State of Florida offers to communities to encourage job growth in industries that the state has prioritized because of the types of jobs those industries create or the services they offer to surrounding communities. The Qualified Target Industry Tax Refund allows a company to recoup some of the taxes it pays based on certain economic activity the company creates. Some of these taxes include corporate income, sales, ad valorem, intangible personal property, and other various taxes levied by the government. The program’s rules state that no more than 25 percent of the total refund approved may be taken for a single fiscal year and that a qualified business may receive no more than $1.5 million in tax refunds for a single fiscal year.

So how does a business qualify for the QTITR? Well, a business must first be a Qualified Target Industry (QTI). QTIs are the businesses that Florida is looking to attract to the state. Broadly speaking, QTIS are in certain industries that include cleantech (such as sustainability and biomass technology companies), life sciences, infotech (such as digital media and software companies), aviation and aerospace, homeland security and other defense companies, and financial/professional services. While some businesses may consider themselves on the edge of one of those categories, it should be noted that Florida Statutes expressly provide that a QTI is not “any business subject to regulation by the Division of Hotels and Restaurants or the Department of Business and Professional Regulation.”

All business ventures are evaluated on an individual basis, so don’t assume by operating in one of the above mentioned QTIs automatically indicates eligibility. To determine eligibility, an application is submitted to Enterprise Florida (EFI). EFI is a public-private partnership between Florida’s business and government leaders. It is the principal economic development organization for the State of Florida and the Chairman of the EFI board is Governor Ron DeSantis. EFI will evaluate a certain project or business venture based upon how many full-time jobs are created and the annual wages those jobs pay. There are several other minor economic factors that EFI evaluates before pre-approving the application and sending it off to the Department of Economic Opportunity (DEO).

The DEO is the Florida agency that gives a final decision on whether a business will receive the QTITR. The amount of the tax refund provided by the DEO varies depending on each situation. The DEO provides the applicant with a letter of certification approving or denying the applicant’s request. The applicant and DEO then work to sign a written tax refund agreement that includes the specifications of what kind of refund the applicant will receive.

There are many rules and regulations when applying and attempting to receive the QTITR, so it is important to navigate the process as carefully as possible. As always, seeking the help of counsel to navigate this process is a good idea.

Zach Brown is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Estate Category
Kevin Albaum

How Assets Transfer When a Person Dies

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When a person dies their assets generally transfer to a new owner in one of four ways as follows: Joint Owner with Survivorship Rights; Payable-On-Death/Transfer-On-Death/Beneficiary Designation (“Beneficiary Designation”); via Probate; or via a transfer to a Trust. 

If an asset is owned with a joint owner who has survivorship rights to said asset, the surviving joint owner(s) automatically owns the asset free from the probate process upon the other joint owner’s death. Common assets that have joint owners with survivorship rights are: bank accounts; real property and investment accounts. 

If an asset has a Beneficiary Designation, the named person(s) to receive the asset will be able to claim said asset free from the probate process upon the owner’s death. Common assets that have Beneficiary Designations are: bank accounts; retirement accounts; life insurance; annuities; real property; corporate interests and investment accounts. 

Probate is a circuit court proceeding in which assets are transferred to new owners upon a person’s death. All assets that are not transferred by some other means (to avoid probate) are subjected to probate administration and thus subject to the terms of a person’s Will (if they have one). If you die without a Will and have assets that are subject to probate administration, any interested person can petition the court in order to distribute your assets according to state laws. I view a Last Will and Testament (more commonly referred to as a “Will”) as a necessary estate planning document for most people but I also see the Will as a safety net to catch assets that a person has failed to transfer via other methods such as joint ownership with survivorship rights, Beneficiary Designation, or by a transfer to a trust. There is a common misconception that the only estate planning document needed is a Will, however, a Will alone (without proper planning and understanding of how the Will operates) is not likely to avoid issues following a person’s death. 

If an asset has been properly transferred into a Trust during a person’s lifetime or by a Beneficiary Designation, the Trust’s terms shall govern the administration and distribution of said asset until the Trust has fulfilled its purposes and the asset will avoid the probate process. The depth of this article will only allow for discussion on the most common type of trust which is known as a revocable trust or a living trust (“Revocable Trust”), However, many types of trusts exist for many different purposes. 

A Revocable Trust is a legal document that is established during a person’s lifetime which usually directs that the trust’s assets and income are to be used for the person’s benefit during their lifetime and also designates beneficiaries to receive said assets after the person’s death. A Revocable Trust, like a Will, can be amended at any time by the creator of the trust who is known as the “Grantor” as long as he is living and maintains legal capacity. The person in charge of the trust with legal authority to manage the trust is known as the trustee (“Trustee”). The Trustee administers the trust for the benefit of the Revocable Trust’s named beneficiaries. Usually, the 

Trustee is the Grantor during his lifetime and then a successor trustee is named to take over the trustee role upon the Grantor’s death. 

After creating a Revocable Trust, the Grantor then transfers many of his assets to the Revocable Trust during his lifetime. The Grantor can add or withdraw assets from and to his Revocable Trust at any time during his lifetime while he maintains capacity. When the Grantor dies, a Revocable Trust becomes irrevocable and the then serving trustee and trust beneficiaries may not alter any of the trust’s provisions. A Revocable Trust will avoid probate upon the Grantor’s death for all assets that have been transferred to the trust. Probate is avoided because Revocable Trust assets are not titled in the name of Grantor at the time of death and therefore the property is not part of a probate process. It is very important to fund a Revocable Trust as failure to properly fund the trust will provide little or no benefit to the Grantor. 

Whenever configuring an estate plan, it is important to meet and discuss with a qualified estate planning and probate attorney where you map out and plan what will happen to each of your assets upon your death to ensure that your estate planning goals are accomplished at the time of death. 

Real Estate Law Article
Mike Workman

I CAN SEE CLEARLY NOW, IT’S NOT CLOUDY

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When purchasing real property in Florida, people will often tell you to make sure that you get “clear title” or “good title” to the property. That sounds like good advice, but what does it really mean? First of all, title is the legal right to control and dispose of property. A deed is evidence of having title to real property, and the different types of deeds were discussed in one of our recent articles. Clear title and good title are different ways of referring to having marketable title to real property. A common definition of marketable title in Florida is title “which a reasonable, prudent person would accept in the ordinary course of business after being fully apprised of the facts and the applicable law.” Additionally, title is marketable if it is free of “clouds” or “defects” such as adverse rights, interests or liens. 

The Florida Uniform Title Standards are a reference for determining whether title is marketable. The preface to the Title Standards describes a title standard as “a voluntary agreement made in advance by members of [The Florida] Bar on the manner of treating a particular title problem when and if it arises.” The Title Standards have not been formally approved by any court or legislative body; however, they are well established principles used by real estate attorneys in Florida when examining title to real property. 

Obtaining title insurance when purchasing real property is the typical way of determining that title is marketable. A real estate attorney will examine recorded documents affecting title to the property, and then apply the Title Standards to any title problems that arise in the examination. Typically a buyer will have a contractual right to object if a seller’s title to real property is unmarketable. Assuming the seller’s title is marketable, the parties can proceed to closing and the buyer will receive an owner’s policy of title insurance. Title insurance is an indemnity against loss resulting from a title defect. If a defect is discovered after closing which renders title unmarketable, and the title insurance policy did not except or exclude the defect from coverage, then the title insurer will typically have to pay up to the policy limits to have the defect removed. 

One of our experienced attorneys can help you with your title questions, as well as closing your real estate transactions.